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Forums - Nintendo Discussion - UPDATED:Do you think the Wii U will get a price cut this year?

 

How much do you think a $200-250 price will help Wii U?

Massive Boost over weeks 14 14.29%
 
Substantial Boost 29 29.59%
 
Moderate Boost 42 42.86%
 
Little or no effect 13 13.27%
 
Total:98
Dunban67 said:
Materia-Blade said:

The onus is on you to prove it is losing money.

That is what i thought-  Can t find anything from Nintendo that says the Wii U is making money-  Yet you are sure that it is- based on????

 

Tell me this-  What makes you beleive the Wii U is making money?  Do you even have a hypothisis?  

I remember a fiscal report from nintendo from a long time ago. But again, what makes you think it is losing money? it's the same price for 2 years and it was breaking even 2 years ago.



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sc94597 said:
Dunban67 said:
sc94597 said:

Again market value =/= market price. Market price is the minimum at which people can buy a good (in your scenario the market price of the XBO is $200.) Market value is the maximum at which a person/group of people will buy a good. Market value is different for different people. There is an average market value, which you are alluding to, but that can only be determined through an open-market auction and it is very much price AND time dependent. 

YOU MUST provide context when you say "more valuable."

In your scenario I value an XBO at $200 or anything less than $350 - (the perceived cost of sale.) That is the most I will pay for it. On the otherhand my willingness to pay for the Wii U can exceed this value, and therefore I value the Wii U more than the XBO, even if I choose the XBO to fund my purchase of the Wii U. An alternative scenario is if you have $350 and you want an XBO (the market price of the XBO is $350.) You find a Wii U for $200 and sell it for $300 to help fund your XBO and also gain some extra money. In the end you make $100 on top of your $350 and buy your XBO + a game. Just because you chose to buy a Wii U before buying an XBO does not mean you value the Wii U more than the XBO. You valued the XBO AT LEAST at $350 and the Wii U at most at $300 ($200 you paid + $100 profit you make from it.) 

What YOU (or I) value a product at means nothing to anyone -  Virtually no one will knowingly/willingly pay more than the market price of a readily available  product -  Your willingness to pay more for a Wii U than an Xbox One is a definition of nothing but your preference- it has nothing to do with value unless a critical mass within a market felt the same way-  which is not the case

I noticed that you didn't address my scenario. In that scenario does the Wii U have more value than the XBO because any person will buy it before an XBO?

Value is exactly prefence. Just because the marginal value of the XBO is greater in your scenario does not mean its total value is greater. 

And yes, people do pay more or less than market price in many real-world situations. 

"In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations."

^ Is not always true. 

http://www.parjustlisted.com/what%E2%80%99s-the-difference-between-price-and-value/

The debate over “prices” and “values” is a very old and famous one in economics, perhaps 250 years in the making. In the short run, it is quite possible to find prices higher or lower than values due to unusual events or rapid changes in market conditions. In the long run, price equals value due to market forces.

We make decisions in the short run. Therefore, it is possible that prices will exceed values (this is typically called “over-valuation”) or prices may be less than values (this is called “under-valuation”). If there were no differences between value and price, under- and over-valuation would have no meaning.

Researchers and analysts study markets in attempting to identify situations where there is over- or under-valuations. We can observe prices (as reported by MLS offices from actual transactions) but we cannot observe values. The latter must be estimated in careful studies by statistical analysis.

 

Still an "A" for effort- but your aim is getting worse-  You are talking about "inneficient markets"  and the definitions you are using are typically applied to investments like Real Estate, stocks and bonds-  The value of investments rise and fall over time-  The value of a current/recent gen video game console, like virtually all modern technology will always drop over time (unless it becomes some rare colllectable 30 years from now)



Dunban67 said:
sc94597 said:
Dunban67 said:
sc94597 said:

Again market value =/= market price. Market price is the minimum at which people can buy a good (in your scenario the market price of the XBO is $200.) Market value is the maximum at which a person/group of people will buy a good. Market value is different for different people. There is an average market value, which you are alluding to, but that can only be determined through an open-market auction and it is very much price AND time dependent. 

YOU MUST provide context when you say "more valuable."

In your scenario I value an XBO at $200 or anything less than $350 - (the perceived cost of sale.) That is the most I will pay for it. On the otherhand my willingness to pay for the Wii U can exceed this value, and therefore I value the Wii U more than the XBO, even if I choose the XBO to fund my purchase of the Wii U. An alternative scenario is if you have $350 and you want an XBO (the market price of the XBO is $350.) You find a Wii U for $200 and sell it for $300 to help fund your XBO and also gain some extra money. In the end you make $100 on top of your $350 and buy your XBO + a game. Just because you chose to buy a Wii U before buying an XBO does not mean you value the Wii U more than the XBO. You valued the XBO AT LEAST at $350 and the Wii U at most at $300 ($200 you paid + $100 profit you make from it.) 

What YOU (or I) value a product at means nothing to anyone -  Virtually no one will knowingly/willingly pay more than the market price of a readily available  product -  Your willingness to pay more for a Wii U than an Xbox One is a definition of nothing but your preference- it has nothing to do with value unless a critical mass within a market felt the same way-  which is not the case

I noticed that you didn't address my scenario. In that scenario does the Wii U have more value than the XBO because any person will buy it before an XBO?

Value is exactly prefence. Just because the marginal value of the XBO is greater in your scenario does not mean its total value is greater. 

And yes, people do pay more or less than market price in many real-world situations. 

"In economics, market price is the economic price for which a good or service is offered in the marketplace. It is of interest mainly in the study of microeconomics. Market value and market price are equal only under conditions of market efficiency, equilibrium, and rational expectations."

^ Is not always true. 

http://www.parjustlisted.com/what%E2%80%99s-the-difference-between-price-and-value/

The debate over “prices” and “values” is a very old and famous one in economics, perhaps 250 years in the making. In the short run, it is quite possible to find prices higher or lower than values due to unusual events or rapid changes in market conditions. In the long run, price equals value due to market forces.

We make decisions in the short run. Therefore, it is possible that prices will exceed values (this is typically called “over-valuation”) or prices may be less than values (this is called “under-valuation”). If there were no differences between value and price, under- and over-valuation would have no meaning.

Researchers and analysts study markets in attempting to identify situations where there is over- or under-valuations. We can observe prices (as reported by MLS offices from actual transactions) but we cannot observe values. The latter must be estimated in careful studies by statistical analysis.

 

Still an "A" for effort- but your aim is getting worse-  You are talking about "inneficient markets"  and the definitions you are using are typically applied to investments like Real Estate, stocks and bonds-  The value of investments rise and fall over time-  The value of a current/recent gen video game console, like virtually all modern technology will always drop over time (unless it becomes some rare colllectable 30 years from now)

Video game consoles (and games) frequently have supply issues. In these instances the value and market price rises. And the video game console market isn't a perfectly competitive or even realistically competitive one either, it is most oftenly characterized as an oligopoly, so it very well may be an inefficient market. Nevertheless, I would say the value of video game consoles increases, peaks, and then decreases with time. More often than not demand increases with time for video-game consoles, until they peak (incline caused by game releases and then a decline by market saturation.) This is true even when the price changes are miniscule, if existent at all. This also shows how demand (proportional to value) and price are asynchronous in the video game console market. The manufacturers, because of thier oligopoly, aren't price-takers (like, say, farming) and are able to manipulate prices more easily. This is why we don't see console prices change very much with changes in demand. Usually if a console price is changed it is because of reduced costs of production and an endeavor to expand consumer-bases. 



Materia-Blade said:
Dunban67 said:

That is what i thought-  Can t find anything from Nintendo that says the Wii U is making money-  Yet you are sure that it is- based on????

 

Tell me this-  What makes you beleive the Wii U is making money?  Do you even have a hypothisis?  

I remember a fiscal report from nintendo from a long time ago. But again, what makes you think it is losing money? it's the same price for 2 years and it was breaking even 2 years ago.

last fiscal year it was break even up to 3 million+/- units only de to the fact they wrote down the cost of their remaining inventory (at that time) from the previous fiscal year-   Iwata said it was costing them more to manufacture the Wii U than they could sell them for- however by averaging in significant inventory at or close to zero $ s with whatever they had to manufacture last fiscal year they would come close to break even selling up to 3 or 3.2 million (  or close to those numbers i am going by memory). T omorrow ill try to find and post the exact quote from Iwata-  

Basically the last information that Nintendo has given out (that i am aware to date- hopefully they will update at theri next earnings release) is the Wii U cost more to make than they could sell it -  Is it possible cost have come down since then- yes-  Enough for them to sell the Wii u at a profit?  Not sure yet-  But the last official word/public reporting i am aware is they are at a loss-   But they have not turned much inventory since then so it is more difficult to get cost down



sc94597 said:
Dunban67 said:

Still an "A" for effort- but your aim is getting worse-  You are talking about "inneficient markets"  and the definitions you are using are typically applied to investments like Real Estate, stocks and bonds-  The value of investments rise and fall over time-  The value of a current/recent gen video game console, like virtually all modern technology will always drop over time (unless it becomes some rare colllectable 30 years from now)

Video game consoles (and games) frequently have supply issues. In these instances the value and market price rises. And the video game console market isn't a perfectly competitive or even realistically competitive one either, it is most oftenly characterized as an oligopoly, so it very well may be an inefficient market. Nevertheless, I would say the value of video game consoles increases, peaks, and then decreases with time. More often than not demand increases with time for video-game consoles, until they peak (incline caused by game releases and then a decline by market saturation.) This is true even when the price changes are miniscule, if existent at all. This also shows how demand (proportional to value) and price are asynchronous in the video game console market. The manufacturers, because of thier oligopoly, aren't price-takers (like, say, farming) and are able to manipulate prices more easily. This is why we don't see console prices change very much with changes in demand. Usually if a console price is changed it is because of reduced costs of production and an endeavor to expand consumer-bases. 


video game consoles rarely have supply issues after launch demand is met-  Specifically Neither the Wii U or X box one has hardly had supply issues post launch this generation-  both of their values have dropped since launch via lower prices and more bundling 

 

 you are armed with info but you are not applying it very practically



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Dunban67 said:
sc94597 said:

Video game consoles (and games) frequently have supply issues. In these instances the value and market price rises. And the video game console market isn't a perfectly competitive or even realistically competitive one either, it is most oftenly characterized as an oligopoly, so it very well may be an inefficient market. Nevertheless, I would say the value of video game consoles increases, peaks, and then decreases with time. More often than not demand increases with time for video-game consoles, until they peak (incline caused by game releases and then a decline by market saturation.) This is true even when the price changes are miniscule, if existent at all. This also shows how demand (proportional to value) and price are asynchronous in the video game console market. The manufacturers, because of thier oligopoly, aren't price-takers (like, say, farming) and are able to manipulate prices more easily. This is why we don't see console prices change very much with changes in demand. Usually if a console price is changed it is because of reduced costs of production and an endeavor to expand consumer-bases. 


video game consoles rarely have supply issues after launch demand is met-  Specifically Neither the Wii U or X box one has hardly had supply issues post launch this generation-  both of their values have dropped since launch via lower prices and more bundling 

 

 you are armed with info but you are not applying it very practically

Their values didn't drop. Their prices dropped to match the values of enough consumers so that the platforms increase their sales. You can only form the conclusion that their values dropped if the consoles are selling at the same rate that they were when their prices were higher or the quantity demand decreased over time with the same market price. The XBO's demand increased with the price drop, and the Wii U's demand is increasing despite not having as sizable of a price drop.  Again values =/= prices. 



What's the point of price cut anyway? Someone can't spend 300$ on new console, but he can spend 250$ on new console and >300$ on games? It sound ridiculous.



rutea7 said:
Nintendo should anounce a pricetag of 199$ when they anounce their new system, because that anouncement alone might hurt wii u sales even more.

people might think "I waited this long I might as well wait for NX since Wii U wont have support much longer" so a price of 199$ might be more tempting to that crowd who waits for a system to be under 200.

Note: Also Value can be objective if you only take into account manufacturing and distribuition costs. That said I have no idea which one costs more between XOne and Wii U.


I don't understand how some of you fail to grasp that Nintendo simply 'pushing' their systems at like a 200$ price tag would NOT help them. if they are losing something like 50$ at that point for each system they sell, they would have to sell a number of software just to get back into the green per unit. it's just a nightmare for anyone concerned with profit

bear in mind Nintendo is not a giant corporation with many sectors like Microsoft, they can't just take big risks when their manufacturing costs are not low enough. regardless even if Nintendo was capable of such drastic price cuts I doubt it would have THAT much effect

 the reality is once your system has been out for a few years it has a certain reputation and certain market interest. too many people have a negative mindset about the system at this point. If a person was that interested in the Wii U they certainly would have saved up 300$ in a few years time span to spend on it (I'm talking your average gamer consumer)

  also bear in mind that the Nintendo Gamecube had extreme price cuts and a length of time in which it was only 100$ yet that did not really save its sales

 

the reality is simply selling a bigger amount of consoles is useles (besides for maybe bragging rights) when it comes to economics and profit. I've mentioned the Gamecube era already, and I think something interesting to illustrate there is that despite Playstation/Sony dominating that generation Nintendo STILL made the most profit of any gaming console developers during that period. sure, a lot of that was from handheld but it just illustrates that often it is not so much the quantity you sell as much as the efficiency of price

  why sell 2 items for 50$ when you could sell 1 for 100$? in this case I just don't think the demand for the Wii U justifies a huge price cut. those die hard Nintendo fans (and that's the majority of the people buying the Wii U at this point) are MOST LIKELY going to not be compelled or not compelled to buy the system for the a 50$ difference. if this was the 3DS we were talking about then it'd be a different story, as that is far more universally appealing at this point to the general gaming market (and of course it has gotten reductions in price)

    any discount is going to push more sales but in some cases it won't leave you with any more profit and could possibly put a company more in the negative if software sales are disappointing



Dunban67 said:
Materia-Blade said:

The onus is on you to prove it is losing money.

That is what i thought-  Can t find anything from Nintendo that says the Wii U is making money-  Yet you are sure that it is- based on????

 

Tell me this-  What makes you beleive the Wii U is making money?  Do you even have a hypothisis?  


Nintendo is extremly careful financially. the Wii U at this point is likely either making a little money or barely losing any. you won't find stores overstocked with the system, and you don't see the price point dropping/discounts because of this

simply selling more systems gives no gurantee that manufacturing costs will drop nor does the Wii U have a big enough sized library of software to really backup that plan of action. I think the library is fantastic but its not HUGE by any means and the only reason I can see for desiring to push a lot more system sales is if you were expecting to sell a lot of games (questionable at this point)



So it's not profit for Nintendo, then ?


http://mynintendonews.com/2014/10/29/nintendo-reports-a-profit-in-q2-earnings-as-wii-u-begins-to-show-momentum/



http://mynintendonews.com/2015/01/28/nintendo-reports-a-profit-in-q3-financial-results-as-wii-u-sales-remain-steady/



 

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