Nintendo has stated that, unlike rivals Sony and MS, it will not make much of a loss on the launch of its Wii console. Game console makers tend to lose quite a lot of money during the first year of life of their product but make up for it with software sales over the full life of the device.
Sony has already announced that it expects he PS3 launch to result in losses of USD 884 million (100 billion yen) in the current fiscal year. Microsoft's original XBox brought a lot of attention to the losses incurred by console manufacturers, as the company lost about USD 100 on every console sold. These hardware associated losses are necessary in order to keep the price of the console within reasonable limits. Once more units are sold and as manufacturing yields improve, the loss is reduced while software sales help bring in a profit.
In the next-generation round of the console wars both Microsoft and Sony will be losing money, on the XBox 360 and PS3 respectively, although Sony's decision to include a Blu-Ray drive with its console suggests its losses may be greater.
Although Nintendo has not revealed its pricing yet, we only know that Wii will be priced for under USD 250, it is thought it will avoid such losses due to its simpler hardware. 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.
