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sonicfan1373 on 01 November 2014
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fatslob-:O said:
sonicfan1373 said:

I must respectfully disagree with the sweet spot arguement for pricing. I believe people will decide to pay a certain amount based on precieved value (partially based on the precieved quality and quantity of games, partially based on precieved console features and capabilities, partially based on perception of brand). If there is descreptency between the price and precieved value then people will not pay. Hence, the sweet spot for a Sony console is not necessarly the same as the one for a Nintendo or Microsoft console.

The Wii U currently lacks meaningful third-party support (and the future of it getting third-party support does not look promising), it lacks many of the media features that is competitors offer, it (and Nintendo) have been battered by various media outlets after the system's first year debut (creating brand damage). Hence, the precieved value for this system is much lower than that of PS4 and Xbox One. Ergo, many people might not want to pay $300 for the system (espcially since the other systems with better precieved value are priced higher only by about a $100), but they might be willing to pay less based on precieved value (my belief is that the system needs to be priced at least $150 [preferabbly $200] less than PS4). I believe this same precieved value vs. system price also explains why the 3DS managed to gain segnificant momentum at $170 rather than at $250.

Another example I will give you is with smartphones. Apple is easily capable of selling many units of $850 phones, but this does not make it an industrial sweet spot because most other flagship manufacturers sell very few units at or just below that price; the precivied value of an iPhone exceeds the precieved value of most other phones onthe market, which is why it is capable of selling at that price.

Your right that percieved value matters but what value does a consumer see in the WII U ? 

I believe people will be willing to pay a low price for a Wii U in order to play the Nintendo games that are currently on the system (its primary value); if the system (with a game bundled) was priced lower it would be a decent thing to give to a child or have as an adult to primarly enjoy some favourite Nintendo franchises. This would at the very least get them to around a 25-28 million unit mark (at this current time I do not see the Wii U going over 17-18 million units life time sales, if Nintendo were to discontinue the system in 2018). Unfortunatly, I believe, Nintendo's neglect of Western gaming trends in and around 2008, their neglect of the Wii's huge install base starting in 2011, and horrible marketing and lack of delivery of content with Wii U has immensly damaged the Wii brand which is why I do not see a revival like we saw with the 3DS (I am pretty sure that even Nintendo knows that the Wii U is not their future); yet I believe the system is solid enough and has enough well recieved games to be of value to people who want to play Nintendo games although at a lesser price. This is somewhat anicdotal and unscientific, but I have a lot of friends and family members (many with PS4s and Xbox Ones as well as older systems) who are waiting for the price of the system to drop in order to play games like Mario Kart 8, Super Mario 3D World, Super Smash Bros, Hyrule Warriors, as well as some other currently out or upcoming entries in popular Nintendo franchises; these same people did not give the 3DS a glance at $250 but jumped on board when the system recieved a price cut (some jumped on board when the 2DS launched) but all got a 3DS by 2013.

The important point is that the system must be $150-$200 (maybe only initially or maybe permemnantly) less than the PS4 in order to capture people or else we are going to run into the same precieved value and price descriptancy problem, because unlike the PS4, the Wii U's main value right now is to play games from one company.