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MTZehvor on 25 March 2014
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Einsam_Delphin said:
MTZehvor said:
Einsam_Delphin said:
MTZehvor said:
Einsam_Delphin said:
MTZehvor said:

Not unless the production price for Wii U goes down significantly somehow before the end of May. Nintendo was losing money back when they were selling the console by itself for $300; dropping the price for the console by essentially $110 (assuming Mario Kart costs $60), would put them at an even worse position than they're in already.


Once again, the Wii U always comes bundled with a game now. MK8 will not increase the cost anymore than the already bundled games.

While that's true, the difference here is that there are no Wii U bundles that are going for $250 (outside of ones repriced by retailers to simply get rid of their stock). What you're asking for is Nintendo, who was already losing money on the $350 Wii U bundle when it came out, and then cut the bundle price and started eating bigger losses, to now once again increase their loss per console with a bundle that adds another $50 in the negative. That's not going to happen.


Yep, it wont happen, just like with the first price cut... oh wait! Why you guys still seem to think losing money is the only factor that plays into whether or not they should price cut despite Nintendo proving twice already that it's not, I'll never know!

Simple: It takes a situation where it's quite difficult to make profit and turns it into one where it's virtually impossible to. Nintendo didn't "prove" that money wasn't the biggest factor by slashing the prices once; they did so, in fact, for the exact opposite reason. They did it because they believed it put them in the best position to make money; if they could convince people to buy their system at a slightly lower price, they could then turn around and sell (hopefully) enough games to those people in order to recoup the losses.


I did not say anything about money being the biggest factor or not, only that currently taking losses is the not the only factor. Nice try though!
The next stuff you said is all the more reason why they should price cut, because they sure aren't gonna make any money when their console isn't selling and their games follow suit.

Your logic certainly implies it not being the biggest factor.

And no, it's not a reason for the price cut, for several reasons. First off, price cuts have already been shown to be massively ineffective for the Wii U. The Wii U costs about $50 less this year than it did last year, has a full year's worth of games behind it, and is selling 10K or so better weekly than it was last year. That's a pathetic increase for any sort of incentive, let alone a good $50 price cut. If a price cut was going to drastically improve Nintendo's fortunes, it already would have.

Secondly, they may very well not make much money when their console is barely selling. But your plan not only takes away their chance at profit, it puts them at a huge disadvantage as well. You're advocating that Nintendo sell the Wii U at essentially $190 (taking away the $60 for Mario Kart), or, in other words, less than two thirds of what it was being sold for at its launch. Technology improves exponentially, but not that exponentially. There's simply no way for Nintendo to make profit with a handicap like this unless it somehow increases software sales by a factor of three or so, and as the previous price cut has already shown, that isn't going to happen.

In terms of microeconomic theory, Nintendo is currently hovering inbetween the average fixed and average variable costs of their marginal cost graph, meaning that it makes sense for them to stay in business (or, at least, this line of production) for the time being. Your proposition is simply advocating driving them further towards the average variable cost curve in the vain hope that this will somehow magically spike software sales despite precedent arguing against this, which is a policy on par with a struggling football team making all of its tickets a dollar apiece in the hopes that concession stands will cover the lost revenue.