Nintendo Expects Limited Losses From Wii Launch
Japanese game software and console maker Nintendo said on Wednesday it is unlikely to lose much money on the launch of its new "Wii" video game console, in sharp contrast to rival Sony, which expects a hefty loss on the debut of its PlayStation 3.
Game machines manufacturers often lose money on initial console sales, but recoup those losses over the life of the product through software sales. Sony expects to post a 100 billion yen ($884 million) operating loss at its game division in the current fiscal year due to costs related to the PS3 launch.
"We can't promise we won't have even a one-yen loss, but we are not expecting an enormous loss," Nintendo President Satoru Iwata told a news conference. "It is a strange notion that a game console always leads to mounting losses in the beginning."
"We are working to make the Wii business a healthy one from the first year," he added.
Iwata added that even if the company meets its sales target of 6 million Wii consoles in the year to next March and 17 million units of Wii software, Nintendo expected a limited impact on its earnings from sales of Wii for the current business year.
Nintendo, known for games featuring characters such as Mario, Donkey Kong and Pokemon, also said it planned to boost monthly production of its strong-selling DS portable players by almost 38 percent after introducing the thinner, lighter DS Lite in the United States and Europe this month.
The Kyoto-based company will release the Wii, which features a motion-sensor-enabled controller, in the last quarter of 2006, going head-to-head with market leader Sony's upcoming PlayStation 3 console in the nearly $30 billion global video game market.
Unlike Microsoft's new Xbox 360 and Sony's PlayStation 3, which boast more power and high-definition graphics, Nintendo aims to win over customers with an affordably priced unit and ground-breaking games, hoping to attract a broader audience than the young males who usually make up the console gaming market.
Nintendo kept prices and exact launch dates under wraps but said it would announce them by September. The company has said the Wii would cost 25,000 yen or lower in Japan and $250 or lower in the United States.
PlayStation 3, which will hit the U.S. market on November 17, will be priced at as much as $599, while Xbox 360's premium version that is already in stores costs $399.
A key feature of the Wii is its one-handed controller that looks like a television remote control and uses motion-detection sensors that allow players to control the game by wielding it like a sword, waving it like a conductor's baton, or swinging it like a baseball bat.
"We can't promise we won't have even a one-yen loss, but we are not expecting an enormous loss," Nintendo President Satoru Iwata told a news conference. "It is a strange notion that a game console always leads to mounting losses in the beginning."
"We are working to make the Wii business a healthy one from the first year," he added.
Iwata added that even if the company meets its sales target of 6 million Wii consoles in the year to next March and 17 million units of Wii software, Nintendo expected a limited impact on its earnings from sales of Wii for the current business year.
Nintendo, known for games featuring characters such as Mario, Donkey Kong and Pokemon, also said it planned to boost monthly production of its strong-selling DS portable players by almost 38 percent after introducing the thinner, lighter DS Lite in the United States and Europe this month.
The Kyoto-based company will release the Wii, which features a motion-sensor-enabled controller, in the last quarter of 2006, going head-to-head with market leader Sony's upcoming PlayStation 3 console in the nearly $30 billion global video game market.
Unlike Microsoft's new Xbox 360 and Sony's PlayStation 3, which boast more power and high-definition graphics, Nintendo aims to win over customers with an affordably priced unit and ground-breaking games, hoping to attract a broader audience than the young males who usually make up the console gaming market.
Nintendo kept prices and exact launch dates under wraps but said it would announce them by September. The company has said the Wii would cost 25,000 yen or lower in Japan and $250 or lower in the United States.
PlayStation 3, which will hit the U.S. market on November 17, will be priced at as much as $599, while Xbox 360's premium version that is already in stores costs $399.
A key feature of the Wii is its one-handed controller that looks like a television remote control and uses motion-detection sensors that allow players to control the game by wielding it like a sword, waving it like a conductor's baton, or swinging it like a baseball bat.
