RolStoppable said:
HappySqurriel's justification for Nintendo's current thinking is much more sound than what you have put up there. It seems like you are completely welcoming the destruction of Nintendo and the loss per console sold you view as okay indicates a lack of confidence in the Wii U on your part.
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Umm yes you caught me, I definitly have a lack of confidence in the WiiU. I do not think the consumers who purchased Wii will purchase WiiU if it is priced much higher then 300USD. Now lets say the WiiU is really powerful and launches at 500$, we all saw what happened to Sony with PS3 consumers won't spend that kind of money on hardware. Now if the WiiU is truly only 50% more powerful then PS3/360 and I am wrong the unit definitly cannot sell for more then 300$. If it is closer to the power of Nex-Box/PS4 it still can't sell much higher then 300$ simply because Microsoft and Sony are not likely to repeate their 500-600$ price tags this generation. Both companies sustained heavy losses this generation and going into the next one they will be looking to release profitable and/or affordable hardware.
I have very little confidence in Nintendo's ability to sell WiiU. This comes from some decisions Nintendo has made recently such as outsourcing marketing in North America. I credit the success of the Wii and DS to not only Nintendo's software targetting emerging markets and offering gamers experiances not found on competitors consoles but marketing. If Nintendo cannot market the system then it will not sell and having seen the marketing that has happened lately I am not convinced they have a chance at actually pushing the hardware at a high price point.
If you look back prior to 3DS I clearly stated I did not expect Nintendo to see the success they saw with DS again with 3DS. I thought Nintendo would realize that they could not reach that level of success without compromise. Nintendo realized and instead of allowing 3DS to lag behind DS's success they cut the price to increase market share and 3DS's ability to compete. Since Nintendo appears to be willing to do just about anything to maintain their success from this generation I don't think selling at a profit is a viable option.
Fact is if 3DS failed miserably then I can't see WiiU performing so much better if they launch at a higher cost. With the WiiU controller being very expensive according to Nintendo they have a choice to make cut corners on hardware quality releasing a shittier system so that they can launch at even or possibly a small profit. Or launch a high quality console like they always do and sell it at a slight loss (Up to 100$). Either way Nintendo will recover from the loss within two years and they will reap higher profits in the long run then if they launch at even/profit and sell far fewer hardware units which will lead to far fewer third party software games and accessories and such.
What do you think Nintendo should do? Cut corners on hardware quality in favour of selling at a profit? or release a high quality system that can compete at a slight loss? This is not welcoming the destruction of Nintendo in any way, Sony takes a similar loss each generation. With PSOne and PS2 Sony made a full recovery and made their money back within a year or two. Admittedly according to financials from this generation 360 lost Microsft around 2-billion USD to date and Sony lost billions upon billions more. Check out Nintendo's profit margins in the past here. With over 13-billion in reserves Nintendo could survive a one billion dollar loss during launch year, in fact they would recover very quickly. In fact in 2007 despite the PS3 hardware being sold at such a loss compared to 360 Sony actually lost less money then they did. If Nintendo can limit their annual loss to a billion USD or less then they will make a swift recovery and have made massive marketshare gains which could return them to their former profit levels of Wii.
Nintendo is not doomed if they take a heavy loss next year. It won't spell the end of Nintendo it may spook investors and cause many to sell but in the end the company will survive. Their profits from DS and Wii will not be lost even if they took 1-billion dollar losses each year during the whole generation, which they will not.
I personally think Nintendo approach up until GameCube of selling less but making more was the best strategy. However I do not think Nintendo will go that route. Investors don't want Nintendo to return to GameCube level profits they want Wii level profits. Nintendo is going to do everything they can to gain that level of marketshare and profitability. In order to accomplish that I don't think they could launch higher then 300$, I also doubt they could launch the WiiU at under 350-400$ without cutting serious corners and releasing much lower quality hardware. Nintendo is known for releasing high quality dependable hardware and with Nex-Box and PS4 around the corner Nintendo will need to again provide consumers with the best quality for their dollar or the consumers will go else where!
