Nintendo have not made an operating profit overall this generation.

[Teeqoz]

Miyamotoo said:

Teeqoz said:

This is false. They never announced Wii U hardware was being sold at a profit, that is a misconception from 2014 and it baffles me that people still believe that to be the case. What Nintendo actually said was that Wii U hardware wouldn't incur any more losses for that period, because they were sitting on a lot of unsold Wii U inventory after they shipped less than they expected. Since this also meant they would have to manufacture less Wii U units than expected, the revenue from already manufactured units (where the loss was incurred in an earlier period) would exceed the loss from manufacturing new Wii U units. Hardware still had a negative margin.

Nintendo at launch said Nintendo making small loss that is turning in profit with just one sold game, its well known fact that manufacture cost of same console go down with time, Wii U basically still have launch price, so they definitely making profit on Wii U hardware.

Actually Reggie corrected that comment to "more than one unit of software". And the Wii U has received a 50$ pricecut since then. The Wii U also used dated tech, which means a mature process where there's not much more to make more efficient, so it won't have seen the same reduction in price that is normal for consoles. Using dated tech also impacts them in another way, because they are losing out on economy of scale benefits. There aren't many other products relying on the same manufacturing process, so costs will be high to convince foundries to keep a dated manufacturing process alive when there are newer, much more efficient manufacturing processes in existence (which is how the cost of electronics are reduced in the first place. Die shrinks.)

 

It's not like technology magically decreases in price automatically. It's all in relation to cost of production, and the Wii U wasn't well positioned to benefit from any of the processes that normally drive down costs.