Should Nintendo cut the price of Wii?

[puffy]

trestres said:

justinian said:

trestres said:
For those saying that Nintendo shouldn't worry as the Wii is still selling well, well you are wrong. First of all, Nintendo has made a projection of 26 million Wii's sold by March 2010, and so far the console is about 3.5 million down from last fiscal year when they sold a total of 26 million. The console is still losing sales weekly compared to last year, and there aren't many big games coming soon that could lift HW sales.

Wii Fit+ isn't that kind of HW mover some are expecting, the game is barely a new game at all, it's an expansion to the first Wii Fit, so I honestly don't see how an expansion to an older game will create that huge HW boost some expect. It's the exact same game with added activities.

NSMBWii will be the only game capable of moving big amounts of HW, but it will fall most over it. Considering that the Wii is still selling less than what it did last year on a weekly basis, this will mean that by the time we reach the Holidays NSMBWii will have to be able to make up for those several millions lost during the year. So far 3.5 million down and still losing about 100k - 80k weekly, with no big games coming until October and PS3 getting a pricecut in some weeks.

I still believe they will fall too short of their expectations, even if they cut the price. Demand just isn't as big anymore and now that the other consoles are at a comparable pricetag things will be much more difficult. Some say pricecut didn't work for the 360 against the Wii? It did in fact, since the 360 is at much closer levels to the Wii than it was last year, so I expect the same to happen to the PS3.

And to those saying that SW is what moves HW, where is that SW? Clearly Nintendo has made the same mistake they did last year, when they only relied in old SW and a couple new releases to keep Wii's momentum in the Holidays. When the Holidays were over the Wii dropped like a rock and now it will be very hard for it to rise back up again. So when next quarterly report arrives, I wonder what they will be saying to the shareholders, because 26 million isn't going to happen, or anything close to it.

Some of your statements are so daft I wonder why I am even bothering to reply. Anyway.. 

If you think wii isn't selling well then x360 and PS3 might as well give up. The fact remains that it is almost outselling both HD consoles combined and maintaining that gap.

A game (wii fit) that sold 20 million+ units isn't moving HW? Are you mad? In that case name me a game that has moved HW on any console.

MS overall profits are down, Sony we all know is not going through the best of times. As a Nintendo shareholder I would take that into account and be grateful.

Where did I say Wii wasn't selling well? Where did I say Wii Fit didn't move HW? Learn to read for God's sake.

I'm saying that they should be worried about meeting the forecasts they gave to shareholders at the beginning of this FY and which they maitained after Q1 FY 2010 was over. They expect 26 million, the same as last year, but they are already 3.5 million down in the same timeframe.

About Wii Fit+, I hope you did realize that an expansion called Wii Fit+ is coming this October. If you had learn to read, you would have realized that I don't expect it to move HW AS MUCH or ANYTHING CLOSE to what the original Wii Fit did. It's not like the game is a new game, ITS AN EXPANSION, NOT A NEW GAME. Why on Earth would Wii Fit start moving consoles like it did on launch all of a sudden? Wii Fit was the main cause for Wii's success last year, but because it was a new game. Now Wii is selling less this year even with Wii Fit and WSR out together. If you can explain to me how is Wii Fit+ supposed to raise HW as much as Wii Fit originally did, then I will take everything I said back.

And as a shareholder you will not be that happy if the company you own shares from misses their forecast by 25% or more.

Tres tres tres.. Shall I take a stab?

Firstly I'd like to address Wii Fit Plus.. Now you are correct, Wii Fit Plus IS an expansion. That said, it's also important to realise that Wii Fit Plus will be taking over from Wii Fit, Wii Fit will be discontinued and Wii Fit Plus will take it's place bundled with the balance board. How is this important? Well there are probably 10's of Millions of people who are still interested in Wii Fit but not quite enough to warrant a purchase. If these people see that Wii Fit has been improved and now has 69 activities, these people are more likely to flock to the console and buy it these holidays. The new-ness of Wii Fit Plus will add to the likely hood of people who are already interested to jump in.

Next up, lets talk about these holidays.. There is something different about these holidays that has never happened in the Wii's lifecycle before.. Can you guess what that might be? Yeah that's right, the Wii has always been supply constrained during the holiday season and this will be the first year where that is not the case. That's one of the main ways that Wii Sports Resort and Wii Fit Plus will drive hardware sales, it'll add value to the console for people already interested and the ability to walk into the shop these holidays and buy a console and on of these titles is going really lift the Wii to it's best holiday season yet.

Now lets talk about Nintendo's strategy as a whole shall we? Lets take a look at Nintendo's year quater by quarter:

FY 2009

Q1 - 5,410,822 (launch of Wii Fit and Mario Kart Wii)

Q2 - 4,300,951

Q3 - 10,499,572 (launch of Wii Music and Animal Crossing)

Q4 - 4,866,192

FY 2010

Q1 - 2,713,878

Q2 - ??? (launch of Wii Sports Resort)

Q3 - ??? (launch of Wii Fit Plus and New Super Mario Bros. Wii)

Q4 - ???

Looking at those figures show quite clearly that Wii Music and Animal Crossing didn't keep the Wii's momentum going. It show's a few other things though. It shows that Wii Fit and Mario Kart Wii pushed sales quite high in the quarter that they were released, it shows that even with their console pushing abilities they couldn't push Q2 sales over Q4 sales. This is even more astonishing when you consider the fact that Wii had a very weak holiday line up and so Wii Fit and Mario Kart Wii were still the main console pushing software for Q4.

This is very different to FY 2010. Here's my take on what Nintendo probably are projecting and why a price cut isn't needed to get there.

After having little momentum out of the holidays Wii was destined to slow down until more hardware sellers were launched. This slow down happened a little quicker than most expected and was exasperated by the fact that Wii Sports Resort was delayed a few months. So YoY sales for Q1 went from 5.4M to 2.7M. It's important to note that this quarter saw the launch of two of the top four selling games this generation in 2008. 
Finally Q2 rolls in with the launch of Wii Sports Resort. Wii sales currently down YoY from Q2 last year but this can be explained quite easily.

Basically Q2 is the slowest quarter all year for Wii sales as can be seen by the comparison between Q2 and Q4 in FY 2009. It also has to be noted that hardware selling software don't begin to make a real impact until at least a month from release, once Wii Sports Resort begins to really move hardware, Q2 FY 2010 will almost be over. One last point is that Super Smash Bros. Brawl launched around the same time as Wii Fit and Mario Kart Wii and along with Mario Kart would have moved systems to the remaining fans of those series that hadn't yet picked up a Wii.

Now before I continue, I'd like to give you my projections:

FY 2010 Projections

Q1 - 2,713,878

Q2 - 3,900,000

Q3 - 13,500,000

Q4 - 6,000,000

These projections add up to roughly 26 Million and is most likely what Nintendo are expecting. Now lets take a look at why these aren't as out there as they seem.

 

Q3 FY 2009 - 10,499,572 

Important points: 

- Still supply constrained

- Headline titles were Wii Music and Animal Crossing

- Main sales drivers were Wii Fit and Mario Kart Wii

Q3 FY 2010 - 13,500,000

Important points:

- A 3 Million YoY increase 

- Hardware will be in good supply

- Headline titles will be New Super Mario Bros. Wii and Wii Fit Plus

- Main sales drivers will be Wii Sports Resort, New Super Mario Bros. Wii, Wii Fit Plus and Mario Kart Wii

 

Q4 FY 2009 - 4,866,192

- Hardware drivers Wii Music and Animal Crossing failed to become evergreen titles

- Wii Fit and Mario Kart Wii were still the main reason to purchase the Wii

- 3 whole quarters after their release

Q4 FY 2009 - 6,000,000

- Hardware driver Wii Sports Resort will have been established as an evergreen title

- Hardware driver Wii Fit Plus will take over from Wii Fit as an evergreen title

- Hardware driver New Super Mario Bros. Wii will become an evergreen title in this quarter

 

So there is my analysis of the situation. Agree? Disagree? Let me know why.