When Will Wii be $150

[Joelcool7]

Beuli2 said:

There won't be a price cut. Price cuts cut the revenue. The price cut effect wears down after some time, leaving the sales at the same levels they were before the pricut, but with less revenue.

Well while I partially agree and others have pointed out. Say Nintendo is making 100$ on each unit, they cut the price by 50$ they now need to sell twice as many units to make the same amount of profit. However people are forgetting software, if Nintendo sells more hardware inturn they will sell more software.

If Nintendo sells twice as many games as they were before the price cut they will make up the margins pretty fast. Also new gamers are more likely to buy multiple games. So if Nintendo cuts the hardware price they could sell more software to make up the hardware loss.

Assuming Nintendo has a couple killer apps slated for later this year it shouldn't be too difficult to sell more software by cutting hardware price. Keep in mind software sales are very important almost as important as hardware. Also Nintendo will want more software sales to encourage third party development.