Brand new consoles usually contain components that cost far more than the actual price of the console. Microsoft and Sony were both selling their respective current generation consoles at a loss for years while making up for it with game sales. Nintendo, on the other hand, has always sold Wii for a profit since the components that made up that system never amounted to the $250 launch price. It looks like Nintendo is taking that path again if the latest rumor is true.
Forget the Box spoke to sources close to the manufacturing of Nintendo products and found that the Wii U's components only cost about $180. It seems that the tablet controller makes up a decent portion of that cost with its components estimated at a price of $50.
With the components being priced at $180, you would think a launch price of $200 or $250 would be in order. Not so according to these sources who say Nintendo is currently finalizing costs, but won't go below $300 when the console launches later this year.
Why the high price? It seems that Nintendo is "cutting production costs to maximize profits" and that it's the company's "main concern with the Wii U." This is all to "build back confidence in investors." The increased costs could also be associated with "including software with hardware, R&D, shipping costs, marketing/promotion, transportation, packaging costs, and carrying/holding costs."
The rumored price of the components seem to confirm reports that the Wii U is not all that powerful. That claim has also been challenged though with Gearbox's Randy Pitchford telling Joystiq that the console is "pretty powerful" and that it's "a really nice bridge to the next generation."
For those now worried that the Wii U is doomed to be eclipsed by current gen hardware at launch, don't worry about it. While the sources say that Nintendo chose "an economical GPU and CPU," they also said that these components could "keep up with the performance of today's current consoles."
Interestingly enough, the sources also say that performance wasn't the main focus of the system. They say that Nintendo now has a bigger focus on "downloadable content, applications, video content, digital distribution and services to create a stream of revenue." This makes sense as rumors were going around that Nintendo was looking for video content partners.
All of this is just rumor for now though. It's not worth getting all worried over until E3 comes around and we get our first look at the system in action. It's going to be nothing but conflicting reports until June, but at least it will provide us with some entertainment.
Do you think Nintendo is wise to price at Wii U at $300? What about the rumored cost of components? Let us know in the comments.