More Wii price cut evidence

[hsrob]

I'll preface this by saying i don't really know much about it but i find the blue ocean talk a little tiring a times. The assertion that Nintendo needs to increase the value of the Wii (via software for example) and not decrease the price of the hardware is a wonderful notion and obviously has some merit, but surely it has limits.

Let's say Ferrari wants to increase sales of their cars so they decide to work on increasing the value of the car and people's reasons for purchasing it rather than just dropping the price. No matter what they do to increase the perceived value of the car, I and alot of other people are still not going to drop 200k on a car, i just couldn't justify it.

Now while the Wii is at a significantly lower price point there are people out there (even among the core group that is represented on this site) that are not willing to drop 250 dollars on a Wii, regardless of the merits of its software library. For these people the only thing that may work is a price drop below a point where they can think, i CAN justify spending that much money on a gaming device.The only question is whether the number of potential consumers you earn by dropping the price point offsets the losses in profit.

The other factor that people seem to fail to consider when talking about the Blue Ocean strategy as it pertains to the Wii, is time scale. Increasing the perceived value of the Wii by providing must have software takes time, a long time, whereas a pricecut can be initiated relatively quickly. Perhaps Nintendo isn't willing to wait for the continuing low-ish sales of the Wii to persist for several more months while resting their hopes on software that ultimately may not drive hardware sales.