Is Nintendo crazy? Why is the X1 almost the same price as the Wii U this holiday?

[ICStats]

Cobretti2 said:

Game_God said:

NightDragon83 said:

Rab said:
profit > userbase

How can that be when larger userbase = more profit over the long run, and smaller userbase = smaller profit over long run?

There is nothing true in your sentence.

100 people buying X product at 10$ loss won't put more money in the bank than 1 person buying Y product for 10$ profit!

More consoles = more games sales = more profits from games

Yes, but the profits from additional games need to be high enough to offset the price cut.

Right now let's say Nintendo can sell 4 Million consoles a year at $299.  If they drop the price by $50, they've instantly forfeited $200 Million of revenue per year which they would have gotten without cutting the price.  Additional users would then have to make up for that.

Further if it means selling each additional console at a loss then it's an even deeper hole to dig out of.

So, to drop the price they better be sure they will sell a lot more consoles and those users will buy plenty of games.  If worst case they dropped $50 and that gave only a temporary boost it would be terrible.