Should Nintendo produce a digital-only Wii U?

[fleischr]

RolStoppable said:

fleischr said:

Moore's law dictates that storage becomes cheaper as time progresses.

You missed my primary point: Digital sales bring in more revenue because there are significantly lower distribution costs. Because of that, you can price the console itself more aggressively, even at loss. You bear a loss on the hardware, but make far greater gains in software sales.

Retailer have to sell the experience. The current WiiU offering doesn't do that well. Digital only allows them to do that more effectively with less space -- if the priority is placed on putting a playable WiiU in the store rather than a shelf of games that no one is buying right now.

Re-read the QA portion of the OP and think about it.

Retailers are not going to promote a digital-only console, unless they receive a hefty cut of the selling price. This means that it's more likely that the Wii U's price will go up, rather than down. Or Nintendo takes significantly larger losses on the hardware which completely offsets any gains from higher digital software sales.

With a digital-only console, retailers are not only losing out on sales of new software, but also on sales of used software. Your mistake is that you believe that retailers would welcome digital-only, but the very opposite is the reality.

When it comes to the Wii U's current offering though, they're not making any serious coin here. Pretty sure they'd welcome a change that makes the WiiU offering a better value proposition to consumer. They'd gladly take higher inventory turns of a lower price offering over low inventory turns on a higher price one.

Retailers don't gripe at the fact they can't sell mobile and tablet apps directly. Instead, they focus the retail experience on hands-on trials. It works pretty well -- however because of the amount of space the current WiiU retail presence takes, they can't cede more floor space to this.

Selling a digital-only WiiU would be not much different from selling a Kindle Fire in terms of the bottom line per unit.