Nintendo: NX will not be sold at a loss

Nintendo has reiterated that it will make money on each NX unit sold.

The firm traditionally makes money off of its hardware business, in contrast to its rivals which loses money on the consoles in the hope they’ll make the money back from the software.

However, with Wii U – due to the high costs of the controller – Nintendo took a hit on each unit.

That won’t be repeated, insists Nintendo president Tatsumi Kimishima, who also explained away the console’s March release window.

"One of the reasons for choosing the launch timing that we did is so that the software lineup will be ready in time for the hardware launch," he said during an investor Q&A. "Not only at launch, but we also need to be able to continuously release titles after launch. We are planning for this to be a platform that consumers can enjoy for a long time.

"Next, about how we are looking at cost, we are not thinking of launching the hardware at a loss. When Wii U was launched, the yen was very strong. I am assuming that situation will not repeat itself. Selling at a loss at launch would not support the business, so we are keeping that mind in developing NX."

He continued: "We believe that when launching hardware, the amount of quality software for consumers to play that is available at launch is important, and that we ought to determine our launch dates based on this. The fact that consumers spend more money in the holiday season may be a big factor in why launching then is a good way to start. However, our hardware and software business structure does not end in that year. We want consumers to continue to play this game system for many years, so we believe that in the beginning it is most important to make sure that everything is in order at launch. In that sense, our approach is that we should wait until we can provide a fully realised experience rather than rushing to launch in the holiday season, and this approach has not changed."

Nintendo only expects to sell 800,000 Wii U units this year, and Kimishima hopes a combination of NX and smartphone games will help make up for the lower than usual console sales.

"We are predicting about 800,000 Wii U hardware sales in the fiscal year ending March 2017, which is a decrease of about 2.4 million units compared to the previous year," he explained. "NX and smart device business will be essential to cover this gap, but we also expect download content business to play a role. However, we are planning with the expectation that NX sales will compensate for much of the impact on sales from reduced Wii U hardware sales."