WiiNintendo

We’ve got questions for the DS and Wii. This is a very long read, but it details a lot of info that you may or may not heard. Read on:

Question: When will Nintendo announce the exact price and launch date of Wii? Is your policy that you sell Wii hardware at or over the cost?

Iwata: I believe we will need to announce the precise price and launch date of Wii in or before September this year. Because we are saying that we will launch Wii in the fourth quarter of 2006, or during the October-December time period, we will need to make these announcements before then. So, we are contemplating to make these announcements in or before September. Let me now talk about your question on whether or not we will sell Wii hardware below cost. Some take it for granted nowadays that video game hardware is sold below cost, at least initially, but I don’t think it should be regarded as common sense. Of course, if manufacturing costs are expected to be reduced so small red ink in the beginning will be soon offset as a whole hardware-software business, it is one idea. However, some people somehow think that hardware always loses money. Nintendo is taking some distance away from that approach. If you ask me, “Will Wii be sold at or over the cost?�, I cannot tell today if we won’t lose even one yen by selling one Wii hardware. However, we do not intend to lose a great deal of money from the hardware sales. Any loss must be recovered elsewhere, of course. We are making our overall Wii plan so that we can develop it as a healthy business from the first year.

I believe we will need to announce the precise price and launch date of Wii in or before September this year. Because we are saying that we will launch Wii in the fourth quarter of 2006, or during the October-December time period, we will need to make these announcements before then. So, we are contemplating to make these announcements in or before September. Let me now talk about your question on whether or not we will sell Wii hardware below cost. Some take it for granted nowadays that hardware is sold below cost, at least initially, but I don’t think it should be regarded as common sense. Of course, if manufacturing costs are expected to be reduced so small red ink in the beginning will be soon offset as a whole hardware-software business, it is one idea. However, some people somehow think that hardware always loses money. Nintendo is taking some distance away from that approach. If you ask me, “Will Wii be sold at or over the cost?�, I cannot tell today if we won’t lose even one yen by selling one Wii hardware. However, we do not intend to lose a great deal of money from the hardware sales. Any loss must be recovered elsewhere, of course. We are making our overall Wii plan so that we can develop it as a healthy business from the first year.

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