Get the latest news about PS4 at PS4Daily.com and Xbox One at XboxOneDaily.com!

Nintendo undersupplied the original Wii because they lost money on each unit

Nintendo Wii U gamesRemember back in the day, when the Wii was released and was harder to get than water in a desert? The console was sold out for over a year after its release, that’s how popular it was. Actually, popularity might not have been the only reason the original Wii console was sold out.

According to an article by GamesIndustry’s Rob Fahey, Nintendo was actually losing money on each Wii console sold when it launched in 2006. Which left Nintendo in an odd position: everyone wanted the Wii badly, yet the console was losing money. Nintendo would have taken a huge operating loss had it fulfilled the Wii demand, but Nintendo wasn’t going to take a loss, no matter what.

So they udersupplied the Wii and waited until manufacturing costs went down enough for them to at least break even on each console sold. It took Nintendo more than a year to have adequate supply of the Wii — in some territories, it took even longer than that.

Eventually, Nintendo’s bet paid off big time: the Wii went on to sell over 100 million units and made billions of dollars for the company.

Of course, Nintendo’s quest for operating profits would be challenged later with the Wii U, which would result in two straight years of losses for the company.

Source

Continue reading:




  • condor87z

    They “udnersupplied” it. :P

    • http://wiiudaily.com/ Colin Malone

      Glad to see I’m not the only one that noticed that.

    • howling_wolf1334:[

      Hahaha!! :P

    • CutieTrollpie

      *”udersupplied”

      • condor87z

        When I wrote that it said udnersupplied, then he must have edited it but still made a typo.

    • Dominicruz

      ai Dios mio , its just an error !

    • Will W

      Isn’t that a good way to create want-hype?

    • http://Website.com Shane Michaels

      Now it says udersupplied.

  • gamesplayswill

    That’s nice.. but “Wii U” Daily.

    The Wii is pretty much gone now, I honestly don’t care if it was under-supplied or not, because we all know of the outcome.

    • “Sean” jjbredesen

      Pfft nope, it tells us that Nintendo is underselling Wii U so that they will not make a profit before Half Life 3 is announced!

      • condor87z

        You mentioned Half Life 3…Half Life 3 confirmed.

        • http://ejercitogeek.net/ Mercurio2054

          hahahahaha

        • http://Website.com Shane Michaels

          At E3, the third one since 2010. 3 years after 2007, when Portal 2 came out. Valve is third up at E3, and the first of three to enter gaming after Sega left console making.
          Coincidence? Completely.

    • JB

      C’mon he saved the article, he talked about the Wii U at the end, duh! :-)

  • Christian Schoff

    Oh hey Kinsley is back.

    • JB

      Mario Kart 8 is released now. It’s back to business as usual! (I kid, I kid)

  • Magnus Gonzalez

    maybe add ‘allegedly’ to the title? But that wouldn’t be click bait enough. Fail

  • “Sean” jjbredesen

    So it could have sold even more! Nice to know, and if MK8 does what it is supposed to do, (we will find out when this weeks sales are in) then i think Nintendo should be able to gain a slight profit this quarter, but that depends a bit on how well E3 goes.

  • SkullScience

    Meh! What’s new! Sony simply ‘redesign’ their consoles instead of limiting supply. I love my original Vita and would never exchange it for the nasty cheap new model. Stripped down, worse quality and still charge the same here in the UK! Their is no fundamental difference. If supply costs too much then something needs to be done to limit supply. Nintendo strangled the supply whereas Sony change the production to cheaper components. What is nice to take from this is that it may very well have sold more than the vast amount it did.

    • JB

      Are the new Vitas really that bad? I’ve been contemplating adding one to my collection and was trying to decide between the two. I’ve yet to see a live model of the newer one to see how it stacks up…

      • SkullScience

        Well I suppose it would be fine if you had never used the original. I guess you couldn’t miss what you never had, but the new model is, without contradiction, inferior. Worse screen (OLED >> LCD) and no accessory port means, by definition, you are paying more for less. It just feels slightly cheaper overall. Vita is a great console so I would recommend you get one.

        • JB

          Thanks! I may just go ahead and get the original based on that. I’ve messed around with my friend’s Vita before, so I have at least have limited working knowledge.

  • thedeciderU

    interesting information, john.

    heard of spell check or proofreading? nope. i spotted two obvious errors in my skim. i know people have hated on you for doom/gloom negativity, but if you want people to welcome your content, please clean it up.

  • https://twitter.com/Onyzora Ony

    John you alive :°

  • Zuxs13

    Funny another john article and another article with no actual sources. The article he sourced is nearly making speculation about the wii. It provided no Proof that was the case for the wii, despite Nintendo always stating they made a profit off every wii sold.

    Now if they were to say Nintendo was loosing profit off the wii due to the several years of R&D that was involved to design the wii more and sensor bar, sure that might be reasonable. But considering the guts of the wii were basically the same as the gcn and the sensor bar and wii more were not that expensive I highly doubt there’s any truth to this statement at all.

    • ChrisCamp

      seriously, I said this with the race-baiting article from over a week ago – but who hired this guy? John single handily takes the credibility of this site down at least 10 notches. He makes outrageous claims, he never provides sources and if you do happen to “google his source” , he quotes things completely out of context

      • Zuxs13

        The source he put in this article had no sources either. hey are all terrible.

      • “Sean” jjbredesen

        I agree, but he is the co founder of the website, so technically they can’t fire him :/

  • Decker Shado

    Funny.

    Nintendo’s intentional, maliciously lowered volume of the Wii, specifically to limit it’s purchase, still sold faster and in larger quantities than the PS4. Not all in one day, no.. but over the course of several months, clearly so.

    It’s almost as if they were struggling to meet demand, and demand was ridiculously high. No no no, we know better now, thanks to Kinsley. It’s that Nintendo hates losing money, and knows that nobody in the world ever buys GAMES with their game console, so therefore they should intentionally hinder their own sales, yet somehow still go on to sell the 2nd most of any console ever!

    …..

    …the hell you’ve been smoking, John?

    • Nintenjoe82

      I am pretty sure it was more a case of Nintendo not wanting to produce millions of units in advance of launch just in case they didn’t sell.

  • Jason

    Off topic, but when do you think we’ll get information on how many units Mario Kart 8 sold, and how many Wii U’s were sold, since May 29th?

    • bistricky

      It is interesting Jason. Surfed the net and couldn’t find anything significant on if Mario Kart 8 was selling well or poorly (or if Wii U were selling more then usual). Except for seeing that it is #1 or #2 on Amazon in almost all continents.
      Instead there are stories of how mobile games are making more revenues then Nintendo, A long-winded article on one persons reasoning for never buying a Wii U, and this specific posting. Fortunately, there were all those reviews worldwide about how good Mario Kart 8 is. Cheers :D

      • Alexander Kleinwechter

        Sales figures for games, usually come one week after release, so expect sales numbers this friday.

        • Jason

          Okay, thanks.

        • bistricky

          Very true …. by Friday we will know. But with such a big release for the Wii U, I would have thought there would have been some articles / postings on early impressions of sales of Mario Kart 8. One recent example, a day after Watch Dogs was released, postings all over the place said Watch Dogs was breaking records in sales for Ubisoft. That sales were brisk. I guess with all the hype over this year for Mario Kart 8, even a prediction on sales would be a interesting read.

      • WolfgangAmadeusMozart

        In Japan, Media Create release their weekly sales figures every wednesday, so we’ll find out how many unit were sold there.

    • Jon

      the game came out 2 days ago…. most people who have any results of anything over the weekend…

      • Jason

        I know it’s too soon, I was just asking when they’ll start releasing info.

    • abe

      Don’t know details but Mario kart 8 is 2nd in UK chart, Wii u sales up 666% (82% are mk bundles) http://www.officialnintendomagazine.co.uk/57958/mario-kart-8-and-wii-u-celebrate-chart-success/

    • leo

      like now

  • LordiMcKill

    Sneaky buggers!

  • http://Website.com Shane Michaels
    • Clel

      And he linked us to some really great sources!

      • Moreck

        Where? This article links to another article, which doesn’t provide any sources for the Nintendo information.

        • Prid

          Sarcasm, ever heard of it?

  • leo

    Nintendo- cheap asses

  • leo

    I like john. We need a little bit of hard hitting news

    • Decker Shado

      Hard hitting news is one thing.

      Things that scream “This is bullshit” at every turn with no reliable source for the “information” is something far, far different.

      He may as well be saying the Kinect is being removed from the Xbox One because the faction of elves that produced it has gone on strike.

      • leo

        still its fun.

  • Dfu333

    Sorry for being off-topic but where’s the bloody contest results? The game released and yet still no winner. I already bought the game but I’m just saying. Weird.

  • Rinslowe

    This is one of those articles which the source requires a source imo.
    Not outside the realm of possibility for one of the reasons. But the wording is a little off. More likely, they let demand build if the Wii being sold at a loss is true, in order to meet the relevant quantity according to acceptable price levels. Then placed the orders. Economy of scale requires the scale…

  • Matthew Lambert

    Does it really matter if it talks about Wii? Plus, it’s “Wii” U Daily

  • Keith D. Witherspoon

    See this is the bullshit I’m talking about. Losses are apart of doing business. Preparing for and minimizing the losses is the key. Also making sure the product is worth the loss. Having a console that could keep up with the competition would have been made the losses much more worth it. The losses they would have suffered from the initial Wii wasn’t shit.

  • Mario

    I did not know. Interesting.

  • Firdaus Rizal

    Nintendo Wii must be discontinued in 2014

  • lonewolf

    This doesnt make any sense.

  • Sdudyoy

    Makes since, The Wii was impossible to find in the release year.

  • Angst_Fornow

    Ironic, paying for it now? Heh! Love the system, not thrilled about the business model, tad deceptive…

  • Magnus Eriksson

    Well, this didnt happen with the Wii U atleast. The stores are not able to get rid of them at all. Even two years after there is no problem to find Wii U Zombi U bundles. And that was a release title.

  • guest

    sry but if some guy that works for sony says this about nintendo, i wouldnt take his word on it. to post something like this as a main story without doing a lil research is just pure hogwash. your source is crap. just like my grammar.

  • anthony optimo

    Whenever a console is hard to find, head over to Toys R’ Us. I got a Wii as a Christmas gift for someone two or three days after Christmas.

  • LordYukYuk

    This theory is contrary to every news report made on this topic since November of 2006 and Nintendo’s own financials reports from that era.This Rob Fahey guy is just assuming things about stuff he’s extremely ignorant about. Nintendo never ever lost money on the Wii, that’s been part of the public record for years.

  • wiimenonowiiu

    Well john i guess thats why ps4 is hard to find cause of the money lost and not cant meet supplie for demand

    • Petri

      Meh, I could go to any electronics store and buy an ps4.
      Perhaps you meant “was”?

  • Turing

    Bull-pucky.

  • Adrian

    udersupplied -> undersupplied **

  • MichelChartrand

    Wouldn’t the cost of production actually decrease by meeting demand rather than artificially slowing it? Breaks in manufacturing costs tend to come from scale of orders, they get a better price per unit if the manufacturer has a contract to make 30 million than if they’re contracted to make 5 million, so seems odd that this would be true.
    add to that the bizarre idea to artificially limit the availability because they’re losing money on each unit sold, rather than increase the price to break even.
    Then there’s the issue that while each unit could have possibly been sold at a loss, they’d make a profit generally by the first game purchase, so keeping it out of as many hands as possible would have been worse than putting it in as many hands as possible.
    I don’t want to say the article or source is false but there isn’t enough proof with the sources to trust this accusation over previously released statements.

  • gamingpalooza

    bought my wii at launch and it still works great

  • Shootdatrupee!…

    Who wants to bet that the PS4′s supply problem is also because of this?

  • FutureFox

    That is very interesting. So they technically were selling the console at a loss but took measures to soften the blow to protect to company’s overall performance revenue.

    I know its hindsight and all but this further shows Nintendo was prbably better off just making an HD Wii U and made the Gamepad a peripheral you buy separately. With news of Ninty selling the GC controller seemingly solely for SSMB4 it would have made sense to get console production costs down in tandem with ironing out the tech behind the Gamepad. Seeing as of late the gamepad is hardly used for anything demanding in game capacity and certainly isn’t required for browsing the console menu.

  • Mr Ninty

    the same goes for sony and his ps4 and many many other companies. undersuppling makes the product seem more popular

  • darkcreap

    Proof?

    Come on. Nintendo is a Public company. If they WiiU was sold at a loss, we would have known it years ago. They would have had to give explanation to sharedholders.

  • TheSkeletonMan939 .

    How does one make such a glaring error as “udersupplied”? Is Spellcheck not used anymore?

    And oh yeah I’m pretty sure this whole article is BS.

  • brian

    This article stinks.

  • palomino blue

    Weird. I remember them saying that when the Wii launched it was the only system of the 3 current gen that was not selling at a loss. Am I wrong about that?

  • Connor

    This is a fail article Because the Wii actually WAS profitable day 1 and Nintendo contracted more factores to manufacture Wii’s to meet the demand. Wii U Daily is a suckey “news” reporter. Put this site on your list of “Do Not Read”.

  • Rich Garriques

    ok lets bring up something 8 years ago after wii u starts selling very well. seriously why isnt this person fired yet. HES A FUCKING TROLL AND NEEDS TO GET SHOT POINT BLANK.

  • Allvalve

    There is no substance to this notion.
    Nintendo were making a (very small) profit on the Gamecube hardware even at the end of its life when it was being sold in the UK for £79.
    As the Wii was the same architecture, but upclocked the development costs on the hardware would have been minimal, with the only difference being 64mb ram.
    The Wii launched at £179 in the UK,and even if the extra ram cost another £20 (which it didn’t) there is no way the bill of materials for the Wiimote would have been anywhere near high enough to suggest Nintendo made a loss.
    The fact is, the success of the Wii caught everyone off guard including Nintendo, and when they realised the demand was kept up by stifling supply they continued to restrict stock.
    Rest assured, the Wii made money everywhere, software and hardware.

  • chris

    It took me two (2) years to track down a Wii after it first came out. Crazy how well that thing sold