Every time a new console is released by any manufacture, it's pretty much a given that it will be sold at a loss at first, with software making up the difference. As time goes on, and if the system is successful, there will be new, more efficient ways to produce said hardware and maybe one might be able to turn a profit eventually. But this isn't always the case.
Which is why it's such a shock to hear that the Wii U, which is less than week old, is close to profitability so early in the game. According to Polygon, the system is in the black for Nintendo almost immediately, provide a consumer also gets at least one game. Which is practically a given.
Nintendo of America president Reggie Fils-Aime explains:
"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.”
Nintendo states in their latest financial report that they hopes to sell 5.5 million consoles worldwide between launch and the end of the 2012 fiscal year, on March 31. Given how well the Wii U is doing right now (it's officially the hottest video game product of the holiday season) and how profitable it is, even if they don't hit that number, Nintendo appears to be in good shape for the time being.
