In the past few weeks, both Microsoft and Sony said that they would not be talking about new hardware at this year's E3 and that they still have at least another year before a new console would be hitting the market. Therefore, it would only be right for Nintendo to start talking about their upcoming Wii U before E3 in just a couple months.
We've mentioned on the show that in order for the Wii U to even be competitive, they'd have to launch at a sweetspot pricepoint of somewhere between $249 and $349. Well, it looks like Nintendo may just do that.
We have the details after the break.
Sources that are involved in or are closely related to the manufacturing process for Nintendo are reporting that Nintendo may be looking to sell the console for no less than $300. What's the profit for Nintendo on that? Unlike the PS3, which Sony took a loss on until this year (even at the $700 pricetag), Nintendo's cost on the Wii U is only $180, with $50 of that coming from the tablet controller.
Canadian media reporting site Forget The Box says that,
Cutting production costs to maximize profits is Nintendo's main concern with the Wii U. They are cutting costs in the Wii U's hardware to build back confidence in investors. Nintendo wants investors to view Wii U as a less risky proposition.
The site, which was the first to break this news, also says that the cost does not include other variables such as packing, shipping, advertisement and other indirect costs. For Nintendo to come in at $120 under the retail price leaves a lot of wiggle room for them and the retailers to both make some money off their latest innovation.
For those looking for power, however, you may want to look elsewhere. Nintendo had to make some cuts in certain areas in order to make the Wii U seem less risky to potential investors. Suffering in that respect are the processor and video graphics.
Nintendo chose an economical GPU and CPU that could keep up with the performance of today's current consoles, but keep hardware costs down to maximize profits. Nintendo got a bargain price on the custom GPU and CPU that the Wii U uses. There is a bigger focus on downloadable content, applications, video content, digital distribution, and services to create a stream of revenue. Investors will be ecstatic with the news.
We should see the Wii U fall somewhere in-line with the current generation of consoles in power, which is an unfortunate but required necessity. Otherwise, the components needed to build something more powerful would have pushed the console into the PS3 launch day prices. It's something we've gotten used to with Nintendo, though and at least this time we get HD graphics with the console.
Nintendo was asked recently about this issue and they said exactly what we'd expect when it comes to how they are going to sell this console. It's going to be about the playing experience and less about how great their environmental draw distance will be.
We understand that people like to dissect graphics and processing power, but the experience of playing will always be more important than raw numbers.
Is $299 a good price for the Wii U? Is the console enough of a difference to drive the casual gamer to make another purchase? On the flip side, Nintendo could drop it to $249 and even though it would cut into their profits, rumor has it that they may not realize if they would lose a lot of money by making that decision. I guess we'll see at E3 what happens.