What would be the better move for Nintendo with the Wii U, temporary price cut or use the money on a huge advertisement campaign

[Aielyn]

I say neither.

Instead, I say that they should be smarter with their money, and come up with a small advertising campaign that intentionally goes against the norm - something that will capture attention, and hopefully something that gets the news media talking about it (thus providing free advertising).

Meanwhile, rather than cutting the price of the system, they should boost the perceived value of buying now. Perhaps they could announce a deal that works like this: every person who owns a Wii U by the end of this year will receive a free game of their choice. It simultaneously rewards those who have already bought the system, and gives incentive for people to buy the system in the next two months. The free game would be available at any time to the end of 2015, thus giving people who are interested in Zelda Wii U, or other such titles, extra motivation to buy now (and in the meantime, they could probably encourage people to try out games like Hyrule Warriors, which is an exceptionally good game).

Beyond that, there's also this point - to give a $50 price cut (or equivalent per region) now, if we suppose that 1 million Wii U systems would be sold by the end of the year (mostly thanks to Smash), that's somewhere of the order of $30 million of money lost (depending on taxes, etc, in each region) relative to what it otherwise would have been. If we suppose that each of those people would have bought the system in 2015, then there's not much of that that works out to be a big financial benefit to counteract that cost.

So $30 million. That would be enough money to fund the development of three decent-sized games. Alternatively, it could part-fund six third-party exclusives that could fill up the 2015 lineup quite nicely - they could get Treyarch working on a more traditional shooter franchise, for instance (no need to spend huge, since it's single-system, and the engine already exists - in fact, how about Treyarch making the next Battalion Wars, with both first-person shooter and strategy elements, using the Upad for issuing commands to your comrades?).

Simply put, I think there are better uses of about $30 million than a price cut or regular advertising.