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Forums - Sales Discussion - Wii Baseline HW Sales after May 15 Price Cut?

Let's assume the cut to $150 is real, and mimicked outside the USA in various currencies. What do you expect the Wii baseline to be? In the USA Wii has been $150 before, for brief periods as a loss leader to get store traffic over Christmas. $200 --> $150 is a 25% price cut across the board though.

I'm going to assume Wii stabilizes at 115k / week at $200 until May 15 (60k / 45k / 10k roughly between Americas, EMEAA, Japan).

In the week after the price cut I'm going to say:

- 150k Americas

- 20k Japan

- 100k EMEAA

For the next two weeks (til end of May), hw will decline 10-15% from the initial large lift.

By June, I think figures stabilize at these levels for a couple months (June 1 - Aug 1 at least):

- 110k Americas (60k ish base line currently)

- 14k Japan (9k base line currently)

- 70k EMEAA (45k baseline currently)

Presumably after July, the price cut will begin to wear off, particularly if PS3 / X360 get price cuts but more software will arrive after E3 you have to figure.

Over Nov-Dec we'll likely see another large spike particularly if Walmart / BB etc give away $50 - $75 gift cards with Wii (even if you just want Wii for 2-3 games, it becomes a steal at $175 for a NEW console and three-four games).



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As rumors of a price cut hit the main street media, wii sales will crawl as people wait for the price drop (25k, 15k, 5k), the initial time after the price cut the wii will see a modest sales increase, for holiday 2011 with a $199 PS3 and $150 X360 with a new call of duty and new final fantasy, wii will basically be an after thought, even with a zelda release.



Why would that happen? The holiday lift will be smaller but in 2009, rumors of the price cut in late September were floating around in June - September and the lift was still pretty substantial if you back and look at our data.



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Late spring early summer sales for consoles are usually when they are lowest.  Also the Wii going from a non mass-market price to a new Mass Market price is different from going from $199 to $149, wii sales are already saturated.  Usually price drops like that are for systems entering their final stretch or being discontinued.



Train wreck said:

Late spring early summer sales for consoles are usually when they are lowest.  Also the Wii going from a non mass-market price to a new Mass Market price is different from going from $199 to $149, wii sales are already saturated.  Usually price drops like that are for systems entering their final stretch or being discontinued.


$250 wasn't a mass market price? Ha! I don't know if you recall but Wii's best years were when it was $250...

 

On topic: I haven't been looking enough to give a 'base line', but I don't expect much from a price cut.



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I don't understand why sales will crawl, or why no-one would buy a Wii after a 360 price cut...

Anyway, I reckon:

FW- 180k, 35k, 140k Total- 355k

Next few weeks a 10% decrease

Until it stabilises at:

100k, 20k, 80k Toatal-200k

With Zelda release and assuming a bundle:

150k, 40k, 130k Total- 320k

 

Then the holiday period:

700k, 80k, 450k Total- 1,230k

 

I think this is more than what you asked but meh. The price cut will have a big effect, read news articles, blogs, even this site and see that there's a fair few who'd buy a Wii at $150, and even more at $99...



 

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TheSource said:

Let's assume the cut to $150 is real, and mimicked outside the USA in various currencies. What do you expect the Wii baseline to be? In the USA Wii has been $150 before, for brief periods as a loss leader to get store traffic over Christmas. $200 --> $150 is a 25% price cut across the board though.

I'm going to assume Wii stabilizes at 115k / week at $200 until May 15 (60k / 45k / 10k roughly between Americas, EMEAA, Japan).

In the week after the price cut I'm going to say:

- 150k Americas

- 20k Japan

- 100k EMEAA

For the next two weeks (til end of May), hw will decline 10-15% from the initial large lift.

By June, I think figures stabilize at these levels for a couple months (June 1 - Aug 1 at least):

- 110k Americas (60k ish base line currently)

- 14k Japan (9k base line currently)

- 70k EMEAA (45k baseline currently)

Presumably after July, the price cut will begin to wear off, particularly if PS3 / X360 get price cuts but more software will arrive after E3 you have to figure.

Over Nov-Dec we'll likely see another large spike particularly if Walmart / BB etc give away $50 - $75 gift cards with Wii (even if you just want Wii for 2-3 games, it becomes a steal at $175 for a NEW console and three-four games).


What do you base your predictions on exactly? Do you work with an estimated price elasticity of the videogame market? If one knew that figure, coupled with a 25% price drop and the current siatuation of the market, one should be able to estimate the sales rather well. The overall sales pattern (strong lift in sales, wearing off slowly) sounds good to me. It's in line with previous price drops for current gen consoles.

$50 gift cards for a $150 console would be huge at christmas. It's basically a 33% price drop to the customer. Even a $250 PS3 coupled with a $75 gift card wouldn't compare. And the Wii comes bundled with 2 games. It's like the Super NES deals where you could get Mario Allstars Mario World for 99 bucks and that's without adjusting for inflation.



I don't think it will neccessarily stay at 190k/week past August, but even so my numbers would have the current price drop less effective than the previous price drop...but still increasing 50% per region for a bit (its not meant to be 100% worldwide - just 50-60% up per region which happens to be 60k --> 110k, 45k --->70k, and 10k --> 15k roughly. We're certainly going to see at least a 25% lift for quite some time. 



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

By summer it will drop below 50K ,if a price cut arrives in all regions it will manage to stay above 90K. 1.5M Wii will shipped Q2.



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TheSource said:

I don't think it will neccessarily stay at 190k/week past August, but even so my numbers would have the current price drop less effective than the previous price drop...but still increasing 50% per region for a bit (its not meant to be 100% worldwide - just 50-60% up per region which happens to be 60k --> 110k, 45k --->70k, and 10k --> 15k roughly. We're certainly going to see at least a 25% lift for quite some time. 

Your problem is you're using March numbers to extrapolate sales in the summer.  Don't forget that the Wii had Galaxy 2 last year, and nothing of that caliber this year.  Even so it was down to ~150k in July.  The Wii was doing more than double last year for the current weeks, why do you think that won't hold true in the summer?  Especially since the software situation won't be any better.

Also 60 to 110k is an 83% increase.

Most likely the Wii will be down to 60-80k in the summer without a price drop.  A 50-60% increase would put it around 90k-130k. 

The Wii did 254k last July (NPD).  Do you really expect it to be up to 400k this year?  Up 60% when the Wii has been down over 50% YoY lately.  If that YoY decrease held true through July, then you'd be saying the price cut will give it a 214% increase.