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Nintendo will not profit from Wii U sales, will depend on software

The long-standing games developer Nintendo will be retailing its next-gen console, the Wii U, at a loss. The company will instead rely on revenue from software sales as it hopes the competitive pricing of the new system will help it establish a healthy installed base.

The iconic gaming company hopes that its new console can sell 5.5 million units by April. If that goal is achieved, Nintendo has projected that it can ship 24 million software units by the end of 2013. Over 50 games are expected to be released (opens in new tab) during the Wii U’s launch window.

Nintendo will further subsidise its new console through revenue from the increasing sales of the 3DSXL and 3DS handheld systems. The handheld products improved sales figures produced the only bright spot in a recent quarterly report. (opens in new tab)

Company president Satoru Iwata released a statement outlining the new strategy on Thursday, reading, “The Wii U hardware will have a negative impact on Nintendo's profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable."

"Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve 'Nintendo-like' profits within this fiscal year," Iwata added.

The Wii U will launch in the UK on 30 November and will be available in two variations: the £250 standard bundle and the £300 premium bundle which includes the Nintendo Land game and greater storage capacity.