The company aims to get a large install base for the new console
Reggie Fils-Aime, the president of Nintendo of America, says that his company needs to sell just one game for the newly launched Wii U home console in order to get back the money that it loses on each of the devices.The executive tells the Mercury News that, “As soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.”
It’s not clear whether this company calculus applies to any sort of game sold by Nintendo or just to those that come for full price in a retail package.
Reggie Fils-Aime adds, “In the end, the business model is still to drive the install base of hardware, and then to drive a strong tie ratio with all of the other software and experiences for the consumer. And if we’re able to do that, then we will create significant profit for the company.”
Traditionally, Nintendo has been known to only launch new hardware when it could sell each device for a profit, in order to make sure that an unsuccessful launch would not threaten the financial stability of the company.
For the Wii U, Nintendo has abandoned this strategy mainly because it could not bring down the costs of the new GamePad controller, which includes motion tracking capabilities as well as a touch screen.
As it is, the launch price for the new console has been described as too high by analysts who believe that it will drive potential buyers away.
The Wii U has been on the North American market since November 18 and Reggie Fils-Aime has said that Nintendo is working hard to make sure that all stores have devices ready to sell on Black Friday and then during the Christmas period.
Gamers in Europe will get the new hardware on November 30 and Japan also receives it on December 8.