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Iwata: Wii U business will be profitable in the next fiscal year

Lowered manufacturing costs and higher software sales will 'pull Nintendo from loss'

Nintendo's company president has told investors that its Wii U business will not become profitable until the next fiscal year.

Satoru Iwata (Image: Mark Rabo)

Satoru Iwata told a gathering in Kyoto last week that, in the twelve months from April 2013 onwards, the manufacturing costs of the Wii U will fall while software sales will gradually increase.

During the press briefing, Nintendo revealed that Wii U would break tradition and be sold at a loss. The company also significantly revised down its revenue, profit and unit sales figures for the fiscal year.

Iwata said he was unsure of when the Wii U hardware itself would be sold at a profit. The whole business model behind the console - including advertising, distribution, production and software - would not be profitable until the next business year, he added.

"In the next fiscal year, we will have a larger installed base. We will have a richer array of software and manufacturing costs will also decrease," Iwata told attendees.

"I believe that, as opposed to simply asking when we will be able to sell Wii U at a profit, the focus should be on constructing a healthy profit structure for the business as a whole.

"This is done by launching a sufficient amount of quality software at fast enough a pace for our home console, on which we can look to achieve a higher tie-ratio than on handheld systems, and selling as many units of software as possible.

"I believe this is a goal we can achieve in the next fiscal year," Iwata added. "While I cannot say exactly when the Wii U hardware will become profitable, I am confident that in the next fiscal year we can improve our Wii U business to a level where the platform business as a whole makes solid contributions to our profits."

Iwata did not estimate when Wii U profits would balance the losses to the business made in the current fiscal year.

CVG revealed on Thursday that UK retailers believe there will be a strict limitation on Wii U stock across retail on launch day.