Nintendo has confirmed that the Wii U is being sold at a loss, which helped put the console's price tag in perspective. According to Nintendo of America president Reggie Fils-Aime, however, the loss turns into a gain with the sale of a single game with the system.
Reggie: The business model doesn't change dramatically, in that as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.
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.
While many are surprised that Nintendo is willing to sell hardware at a loss, Reggie's statements show that the company really isn't taking much of a gamble at all.
Source: Mercury News
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