New console price is based on what Nintendo feels consumers would consider reasonable.
Nintendo will sell the Wii U at a loss, the firm has confirmed during its second quarter financial results briefing.
"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," Satoru Iwata, president of Nintendo, told investors.
"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. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability."
This may come as a shock to some considering Wii U will launch at a relatively high price, and suggests Nintendo won't be in a position to budge on the pricing for some time – that is unless it is able to swallow continued losses on the hardware.