They don’t like losing money on hardware as well.
Nintendo of America’s CEO and president Reggie Fils-Aime has mentioned that Nintendo is fully supportive of the $299 price point. They think it’s a great value and consumers will appreciate what Nintendo has to offer them.
“The way that we approach consumer value is we want to make sure we give the consumer a lot for what they pay, and when you look at that basic model you get the innovation in the GamePad – and all of the gaming options that presents – you get Miiverse in terms of a gaming community, you get Nintendo TVii, you get video chat…all of that is included in the base proposition. We think $299 is a really strong value, and it’s a value that’s going to be strong for a long time,” he said in an interview with GI.Biz,
He revealed that Nintendo as a company does not like losing money on hardware, it’s not their business model. He gave an example of how they were losing money on the 3DS and went on to post their first ever loss.
“And what we did with the Wii at $249 and leaving it there for, I think, about three and a half years is very much consistent with our pricing philosophy. In terms of profitability, we don’t comment on our internal byproduct P&L, but as a philosophy, we believe in making money on our hardware, even if it’s small amounts of money at the start.
“We don’t believe in losing a lot of money on hardware. I brought up 3DS – after the price cut, we were losing money on 3DS hardware and that’s what led to our posting our first operating loss ever as a public company.”
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