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Soleron on 14 January 2013
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Mummelmann said:

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Well, damn. That must be a fairly big loss then and at only 50$ below the 360 launch price.

I find it strange that people are downplaying the hardware loss like they are for a few reasons;

1: Nintendo depend solely on their gaming income, its their only business venture and provides all their revenue (and incurrs all loses).

2: They haven't really gotten a very good hardware package for their buck, the gamepad must be pricy to produce indeed. This could prove a very dire decision since it appears that the gamepad isn't firing people up much at all and certainly nothing like the Wii-mote.

Raw material cost for Gamepad must be $100+, which is the kind of figure I expected Iwata to reject or save for next gen.

3: Sony were lashed for the longest time for selling a console at a loss, it was deemed disastrous and a stupid company move (which, to be honest, it was).

4: The hardware appears to be moving a lot slower than Nintendo themselves have projected, this gives them a huge problem since they have little to no wiggle room with pricing and have a cloudy release slate for most of 2013.

I don't know what they expected. Iwata explicitly said the 3DS problem of no early software was fixed for Wii U. I think they assumed 2D Mario would just sell millions regardless, and that Nintendo Land would be Wii Sports.

5: They are competing directly with the current generation of consoles and will also be competing with the next generation, a historically unique position for a console to be in and likely not one to count towards Nintendo's favor. The 360 and PS3 appear to be absolute steals when the three are juxtaposed by consumers.

Nintendo deliberately aimed for a crowded market with two established players, but without understanding what that market wanted (on the online side, and that people wouldn't wait two weeks for CoD).

Overall, like I've been saying since long before the Wii U launched; Nintendo are not in a very good position now and need to put all their effort into staying relevant globally. They stand a very real chance of becoming an obscurity in Europe, being dominated by a Microsoft console in the Americas and being slapped by handhelds and tablet/phone games in the East. They also betrayed their followers by going directly against their own sentiments from only a couple of years back (will continue software support for the Wii, will live for at least as long as the PS360 etc). Now, this is not a doom prophecy but it should be crystal clear to anyone with half a mind towards observation and business that they need to do something quite soon.

Definitely make the Deluxe the only model. Cancel any projects with poor return. Don't allow any more projects 'because the developer wanted it' unless it has a business case.