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Wii U gets rumoured $300 price tag

Nintendo's next-generation game console, the Wii U, is expected to retail for around $300, according to sources close to the company.

Nintendo's next-generation game console, the Wii U, is expected to retail for around $300, according to sources close to the company.

The console will come bundled with a tablet controller, which will cost around $50 to produce, with the total production cost estimated at $180, not counting packaging, software and other related costs, which could drive the final cost well over $200. It would still leave Nintendo with a healthy profit, however, even when shops take their cut, and there could still be some room to lower the price in future.
Since the console will be backwards-compatible with previous Wii games and accessories, including Wiimotes, this could help cut costs for the initial console purchase, as it may come with just the tablet controller and no Wiimotes, relying on previous Wii customers to already have them, while selling them separately or in different bundles for completely new customers.
"Cutting production costs to maximize profits is Nintendo's main concern with the Wii U. They are cutting costs in the Wii U's hardware to build back confidence in investors. Nintendo wants investors to view Wii U as a less risky proposition,” said a source cited by Forget the Box, a Canadian media outlet.
This will be key to the Wii U's success, in the same way that a low price-tag for the Wii helped bring in more sales, particularly when compared to the expensive consoles offered by Microsoft and Sony at the time.
Some analysts think that anything above $250 would be a bad move by Nintendo, as it could cripple its existing market, which includes families on lower incomes, and lead to rivals undercutting it with the cost of current generation consoles like the Xbox 360 bundled with a Kinect.
Nintendo previously hinted that the Wii U would cost more than $250 at launch, but it has been working hard to lower the cost of the console's components, securing a low price for a custom-built GPU and CPU that can allegedly match the performance of current rival consoles. 
The company could also follow Amazon's business model with the Kindle Fire tablet and sell the console at a loss, while making up the profits through games and digital content and services, an area the company is planning to focus more on.
The Wii U will release later this year.
Source: GamesIndustry

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