Wii U rumored to have heavy markup

Posted by Mike Luttrell

Nintendo is once again flying against the traditional console mold and hopes to make a tidy profit on every Wii U sold.

According to rumors posted on Forgetthebox.com, it will cost Nintendo $180 in raw parts to make a Wii U system. However, the company won't be selling it to consumers for any less than $300.

Pumping up the Wii U price tag to $300 or above will make it the most expensive system in Nintendo history. The Wii was $250 at launch.

Of course, the $180 price doesn't factor in all the overhead cost associated with console manufacturing, marketing, and distribution. Nevertheless, by pricing the system at no less than $300, Nintendo will be reporting net profit on its balance sheet for every unit sold.

This is actually a business model that is completely opposite of Sony and Microsoft, and the traditional console business model as a whole.

When the PS3 and Xbox 360 launched, the manufacturers were actually losing money on every unit sold, but as soon as a consumer bought a couple games, controllers, or pieces of online content, that consumer became profitable as a whole.

Nintendo shook that up with the Wii, which was also profitable from day one, but if these latest reports are true the Wii U will be even more profitable.

Nintendo hasn't mentioned anything about price or release date for the Wii U, other than to say that it will launch in the US this year.

Expect more details to come at the E3 trade show in June.