Rarely does Nintendo (NTDOY) sell new hardware at a loss, but during a financial results briefing, Nintendo president Satoru Iwata revealed the Wii U will be sold below its manufacturing cost. Iwata explained that due to rising yen, it chose a price “that consumers would consider to be reasonable” and not one based on manufacturing cost. As a result, Iwata warns that the Wii U will have a “negative impact” on the company’s profits in the months after the console launches.

The company was previously forced to sell the 3DS handheld at a loss after a drastic price cut, but has since returned the device to profitability as component prices fell. Iwata cautioned that when profits do pick up, they likely won’t be “Nintendo-like profits,” which tend to skew on the deep side.

The Wii U goes on sale in the U.S. on November 18th starting at $299.99 for a Basic Set and $349.99 for a Deluxe Set. Nintendo expects to sell 5.5 million Wii U consoles and 24 million Wii U games by the end of Q2.

Raymond Wong is a technology reporter with a passion for cutting-edge gadgets and clean design. He first realized his love for technology when he burned through so many AA batteries on the original Game Boy that scraping battery acid off it became the norm.