news\ Nov 21, 2012 at 9:25 am

It only takes one game sale to make the Wii U profitable


For the first time ever, Nintendo will be selling its console -- the Wii U -- at a loss. According to Nintendo, however, it doesn't take much to make the Wii U a profitable system.

Speaking to Mercury News, Nintendo of America boss Reggie Fils-Aime revealed, "As soon as we get the consumer to buy one piece of software, then the entire transaction becomes profit positive."

Its unclear exactly how much Nintendo is making on third-party game sales, but royalties usually fall somewhere between 20 and 30 percent. Early estimates indicate that for every Wii U console there have been 2.4 games sold, meaning a vast majority of purchases have been profitable for Nintendo.

"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," Fils-Aime concluded. "And if we're able to do that, then we will create significant profit for the company."

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Matt Liebl You can follow Editor-in-Chief Matt Liebl on Twitter @Matt_GZ.
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