Nintendo will be selling its Wii U at a loss when it launches the game console next month.
The company lowered its profit forecast Wednesday. This was confirmed by Satoru Iwata, president of Nintendo, at an investors meeting.
"In addition to the yen's continuous appreciation, the Wii U hardware will have a negative impact on Nintendo's profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable," Iwata said. "In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost."
"Nintendo revealed that 22.19 million 3DS systems have been sold since the system launched in 2011, joining 97.18 million Wii systems sold to date and 152.5 million Nintendo DS systems," IGN reported.
The net income forecast for the full year has been reduced. Nintendo has set a forecast figure to sell 5.5 million Wii U units and 24 million Wii U games by March 2013.
"Manufacturing costs are expensive, and we priced the machine at a level customers would accept. It's important for us to develop a healthy business next fiscal year by combining sales of hardware and software," Iwata said.
Last year, Nintendo posted a loss of $924 million. In July, the Japan-based company posted a $220 million loss. Iwata said that when the game was launched in 2006, "we shipped 5.84 million units of hardware and 28.84 million units of software in its first year."
U.S. retail giant GameStop has sold out its initial pre-order shipment. There are 250,000 customers on the waiting list, Iwata said.