MTZehvor said:
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. |
Price cut you mean, no plural. As said already in the OP, their first price cut was a price cut in name only, as it didn't actually give the Wii U a new price point. It went from $300-$350 to $300, so of course nothing was gonna change. Besides they can't just never price cut again. It's going to happen eventually. As for your next two points, we'd need to know exactly how much Nintendo is losing per system sold to know if it'd be worth it atleast for the short term, which we don't of course.
