Reggie: Wii U becomes profitable with one software purchase, why the console didn’t release sooner, more
Nintendo of America boss Reggie Fils-Aime has offered some new insight into the Wii U in an interview with Mercury News. Read on below for Reggie’s comments regarding how Wii U becomes profitable, why the company didn’t release Wii U sooner, and more.
Reggie on his expectations for the Wii U launch…
“We’ve made more hardware available to retailers than we did for the original launch of Wii. We are also prepared to do faster replenishment into retail than we did for the original Wii. We see that the amounts that retailers have made available for pre-sale have largely been sold, which is very gratifying.
“So we are fortunate that there is strong demand out in the marketplace, and our goal is to meet as much of that demand as possible.
“In terms of our expectations, all we’ve published is that we expect in this current fiscal year to sell 5.5 million units of hardware.”
Reggie on whether or not he expects to lure casual gamers to Wii U…
“Our target is consumers 5 to 95. We pride ourselves on being a mass market games company. We absolutely want more active players. We want more casual players. And we think we’ve got the offering to attract a very wide audience.
“Consumers are looking for new and compelling experiences. And we believe we’re delivering a vast array of new and compelling experiences with Wii U.”
Reggie on why Nintendo seems to be embracing the idea of a console being more than just a game machine, but also a connected entertainment device, with Wii U…
“We embraced video entertainment quite a long time ago when we brought Netflix (NFLX) on to the Wii platform. And if you were to talk to Reed Hastings or anyone over at Netflix, what they would talk about is the huge success that they had off of our platform. And there’s quite a bit of public data out there that shows just how much utilization happened with the Wii for Netflix, versus our competitors.”
Reggie on how selling Wii U at a loss changes the business model for Nintendo…
“The business model doesn’t change dramatically, in that as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.
“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. And if we’re able to do that, then we will create significant profit for the company.”
Reggie on why Nintendo didn’t release Wii U sooner given how the Wii faded in the marketplace…
“As we sit here today, whether you look at this from a U.S. perspective or you look at it from a global perspective, the sell-through rate of Wii was faster than our competition, and the total install base for Wii is much more than our two competitors.
“We began working on Wii U a number of years ago, and certainly the innovation that we’re bringing is significant. And it’s a complex endeavor to bring this type of innovation into the marketplace. We needed to do it the right way. We needed to make sure that it would be a strong consumer experience.”
Thanks to Captain N for the tip.
