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Nintendo Will Lose Money On Each 3DS Sold

Unlike its competitors Sony and Microsoft, Nintendo has avoided the practice of selling its hardware for less than it costs to produce in order to build an install base -- until now. According to a report from Bloomberg Japan, the newly announced price drop of the 3DS will make the handheld a loss leader for Nintendo.

Nintendo CEO Satoru Iwata revealed this new strategy today at a press conference in Osaka. He said the move was made with the intention of increasing revenues and profits in the future, despite the temporary setback.

This likely has a lot to do with Nintendo revising down its profit forecasts today.

Source: Andriasang

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Comments
  • There will be more systems for Ocarina and Mario 3D to be sold on, so it could work.

  • Seems strange a company is doing this but i dont really care because the price drop is starting to persuade me into buying one.
  • If the 3DS can make a proper niche in the gaming landscape they may hopefully make more money in the long run.

    More handhelds sold = more games bought

  • Spend money to make money, I could of thought of that.
  • That is what a 170$ pricetag would mean...

  • It's unfortunate that they have to sell at a loss, but it is better than not selling at all.  

  • Not sure why Nintendo is selling their *** so high in the first place... Who the eff is their competition? Their WII sold more then Xbox and PS3, AND They sold them cheaper then both! NIntendo HAS no competition. Thanks to Mario, Pokemon, Zelda, Metroid, they will always sell merchandise and games... Not sure if this is a trap/ploy...
  • I know I am buying one when it drops


    Maybe software will sell better now that more people will probably own a 3DS.
  • I thought the 3DS only cost around 100 bucks to manufacture.
  • I've been a nintendo fanboy for years that being said, nintendo has been going on a downward spiral in terms of sticking with their products. The wii has been dead for a while, there are no great games coming for it. I've been begging for some quality games and now I've resorted to going back to my gamecube games and re-playing zelda and resident evil 4. Remember how awesome those exclusives were? And now since the new wii u is coming out there's no point in getting a wii. Again now look at the 3ds, all it's got is zelda and honestly i would buy the 3ds just for that game but in the long run i won't have my money's worth. There's really nothing to play on it that's worth it, i can get the full street fighter and resident evil mercenaries without the 3d. The 3ds game reviews on this site have been disappointing and honestly the new icarus game is probably going to suck. Nintendo darn it, you wouldn't need to slash your price so low if you had quality games to back up the price.
  • They'll be in the same predicament Sony was at the PS3's launch. Way too expensive to buy and way too expensive to produce. So they reduced the price anyway and had to wait a while to make a profit. This should help the 3DS pick up steam though. What's more important is the software at this point and the 3DS is failing in that respect.
  • ...this sort of makes me want to buy a 3ds...

  • At least they'll see an increase in software sales. Should make up for the losses.

  • In the long term, I'm sure it will be more beneficial for them. Right now in America they haven't even reach the 1M sales.
  • Hope they can keep their plan in motion as if it fails ,Nintendo could be in trouble.

  • I know that it's not just kids who play on Nintendo handheld stuff, but any1 ever had a kid run smack into you, cause he wasn't paying attention to where he was going and was focused on the handheld?
  • First time I've heard Nintendo not making a profit off hardware. Interesting.

  • It should benefit them greatly in the long run. This is the price people were buying DSi XLs at, if remember correctly, so now there's pretty much no reason for anybody who wants a Nintendo portable not to get this since it plays Nintendo DS games too. A price drop will increase the install base, which will entice more publishers and developers to put games on the platform, which is good for everybody.

    This also shuts up the people who, even after shocking people with the price, tried to make something out of Sony selling the Vita at a loss to keep the price competitive with Nintendo and make it available to more people. Now Nintendo has undercut Sony yet again, but they're selling at a loss. In the end it will hopefully benefit them both in the long run, and if/when it does that will only further benefit us as gamers. /whatever I just did.

  • Oh, boy. Thing look grim for Nintendo.

  • they are doing a price drop so people buy the systems and then people buy games for the system

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