By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Nintendo Discussion - The Wii U will be sold at a loss

Soundwave on 25 October 2012
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


I think they were betting heavily on NSMB2 + 3DS XL skyrocketing the 3DS especially in the US, but from the report, Iwata sounds a bit frustrated that they can't get the US market going, especially relative to the fact that it's 3x-4x the market size of Japan.



Around the Network
Play4Fun on 25 October 2012
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?



Mazty on 25 October 2012
Soundwave said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


I think they were betting heavily on NSMB2 + 3DS XL skyrocketing the 3DS especially in the US, but from the report, Iwata sounds a bit frustrated that they can't get the US market going, especially relative to the fact that it's 3x-4x the market size of Japan.

Yeah totally. The thing is, their market analysts should be fired. It was clear that mobile gaming, for users, devs and publishers was becoming far more focused on smartphones and tablets. To have rested their hopes on 3D gaming which isn't particuarly popular (uptake of 3D TV's & Monitors) in a market which offers more competition then ever before was a sure fire way to run into problems. Why they don't bring out a Nintendo App that let's you buy Nintendo games for smart phones is beyond me (can this already be done?) 



Mazty on 25 October 2012
Play4Fun said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?

Yes because they have low customer retention. 



Play4Fun on 25 October 2012
Mazty said:
Play4Fun said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?

Yes because they have low customer retention. 

At a time when the cost and time of developing games are high, the industry should ignore a a segment of the market because you think they should be catering only to your demographic and not the 'evil' casuals that are bringing so much money to industry.

Money, I should add that goes toward development of those precious  'non-casual' games you think is the only software the industry should be making.

It's mindblowing to me that you think Nintendo trying to cater to all demographics instead of just one is 'bad market practise'. Ignoring a segment of the market isn't good business practise.

 



Around the Network
Mazty on 25 October 2012
Play4Fun said:
Mazty said:
Play4Fun said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?

Yes because they have low customer retention. 

At a time when the cost and time of developing games are high, the industry should ignore a a segment of the market because you think they should be catering only to your demographic and not the 'evil' casuals that are bringing so much money to industry.

Money, I should add that goes toward development of those precious  'non-casual' games you think is the only software the industry should be making.

It's mindblowing to me that you think Nintendo trying to cater to all demographics instead of just one is 'bad market practise'. Ignoring a segment of the market isn't good business practise.

 

Lol you completely ignored what I said about customer retention. 

Where did I say catering to all demographics instead of one is bad market practise? They cater for just casual gamers. That's one market. By your own admition, "Ignoring a segment of the market isn't good business practise".

And before any "they cater for everyone" remarks:

http://www.eurogamer.net/articles/reggie-nintendo-not-good-at-core-games



Veknoid_Outcast on 25 October 2012
Play4Fun said:
Mazty said:
Play4Fun said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?

Yes because they have low customer retention. 

At a time when the cost and time of developing games are high, the industry should ignore a a segment of the market because you think they should be catering only to your demographic and not the 'evil' casuals that are bringing so much money to industry.

Money, I should add that goes toward development of those precious  'non-casual' games you think is the only software the industry should be making.

It's mindblowing to me that you think Nintendo trying to cater to all demographics instead of just one is 'bad market practise'. Ignoring a segment of the market isn't good business practise.

 

I would also add --- and I apologize for inserting myself into your conversation --- that so-called casuals are the ones that buy the vast majority of systems. As much as I would love all video game players to be super dedicated and well-informed, the majority of people who buy a Wii (or a PS3 or Xbox 360) are "casual" video game players. Many of them buy the most popular or sexiest console, many of them buy what their friends own, many of them receive an unsolicited gift from a friend or family member. So Nintendo going after the casual video game player IS a smart business move. It's really the only business move. Yes retention is low. That's because the average consumer is pretty damn fickle.

Neither Nintendo nor Microsoft nor Sony have to worry about their loyal fans. IGN ran a survey in May, and of the things it measured was brand loyalty. Remarkably, 67% of users who owned and played a PS3 all the time were interested in purchasing a PS4; the same was true for those who owned and played Xbox 360 (67%) and Wii (68%). In other words, two-thirds of gamers who play a current-generation system "very often" are interested in its successor, regardless of the brand. So the big three shouldn't be concerned with their most loyal and active customers. But they DO have to worry about "casual" video game players.



Play4Fun on 25 October 2012
Mazty said:
Play4Fun said:
Mazty said:
Play4Fun said:
Mazty said:
.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.


What bad market practise is that? The 'casuals'?

Yes because they have low customer retention. 

At a time when the cost and time of developing games are high, the industry should ignore a a segment of the market because you think they should be catering only to your demographic and not the 'evil' casuals that are bringing so much money to industry.

Money, I should add that goes toward development of those precious  'non-casual' games you think is the only software the industry should be making.

It's mindblowing to me that you think Nintendo trying to cater to all demographics instead of just one is 'bad market practise'. Ignoring a segment of the market isn't good business practise.

 

Lol you completely ignored what I said about customer retention. 

Where did I say catering to all demographics instead of one is bad market practise? They cater for just casual gamers. That's one market. By your own admition, "Ignoring a segment of the market isn't good business practise".

And before any "they cater for everyone" remarks:

http://www.eurogamer.net/articles/reggie-nintendo-not-good-at-core-games


Games like Mario Kart 7, SMB and 3DLand appeal to all markets, both core and casual, though 3D Mario is primarily a core franchise and NSMB is primarily casual.

Zelda, Metroid, Pikmin, Donkey Kong, smash bros, are primarily core games.Nintendo themselves refer to them as such.

Your link doesn't say otherwise. If you read your own link, you'd see Reggie says something about, "active player who loves Metroid or Zelda".

He is talking about getting the kind of core games that Nintendo doesn't make, like GTA, AC, Bioshock or whatever.

So, yes, Nintendo'caters to every demographic'.




JEMC on 25 October 2012
TomaTito said:
HappySqurriel said:

You have to factor in the cost of doing buisness in Europe ...

There are higher regulatory costs, labour costs and taxes which all translate to it being more expensive to produce/sell anything throughout most of the Eurozone; and this results in goods being more expensive.

You're right about the taxes, forgot to factor that in, don't know if they are also included in the Japanese prices.

Since they always talk about retail prices, we can assume that the VAT is included.

Now, using your numbers*

 

TomaTito said:

Wii U Basic

  • Japan: 26250 yen
  • Europe: 31000 yen
  • US: 24000 yen

Wii U Premium

  • Japan: 31500 yen
  • Europe: 36000 yen (console) - 5000 yen (Nintendo Land)= 31000 yen
  • US: 28000 yen (console) - 5000 yen (Nintendo Land) = 23000 yen

 

Right now VAT in Japan is a mind blowing... 8%! (Who do I have to kill to get that VAT over here?) we end with

Japan

WiiU Basic : 26250 ¥ => 25000 ¥

WiiU Premium : 31500 ¥ => 30000 ¥

USA's price is without VAT, but in Europe is also included. The vat is : 19% in Germany, 19.6% in France and 21% in both Spain and Italy (the biggest markets in Europe, excluding the UK). If we assume a 20% of VAT in Europe we end up with

Europe

 

WiiU Basic : 310000 ¥ => 25833 ¥

WiiU Premium : 36000 ¥ => 30000 ¥

 

Basically we pay the same.

 

*Remember that those are the retail prices which include the margin that goes to the store, those are not the prices that Nintendo sells the WiiU to them.



Please excuse my bad English.

Currently gaming on a PC with an i5-4670k@stock (for now), 16Gb RAM 1600 MHz and a GTX 1070

Steam / Live / NNID : jonxiquet    Add me if you want, but I'm a single player gamer.

Play4Fun on 25 October 2012
Chark said:
Play4Fun said:

The gamepad doesn't use any cutting edge parts. There are tablets out there with more components and better screens in them than the gamepad that cost less than a $100 to manufacture.

That's why i don't think it adds $100 or more to the console.

The gamepad's $150 price isn't really an indication of a production cost of around $100. That's what I'm arguing. Back in 2006, for example, we got a report that Xbox 360 controllers cost $11 to manufacture, yet they are sold for $50/$40 even today.

WiiU gamepad cost more to make than an average controller, so it will be sold for more than an average controller at launch, but I am as certain that it still has a high profit margin as i am certain that it costs less than $100 (i'm thinking around $50) to make.

So is Nintendo's gamepad pricing just exploitation? I don't think it costs $100. I'd say $50 though. That cost tacked on to what the parts in the Wii U cost makes a difference.

I understand that you can have high profit margins on a controller, but there is most likely a point where the returns have to diminish in order to maintain not only sales, but profitability. I suppose with the gamepad, the majority of purchases might be for replacements, in which case they are charging a lot for them because their most likely customer needs it rather than wants it in order to continue playing....well with asynchronous. If that is the case then they are just trying to make money off of people who break their controller instead of people who want multiple ones. If not, they would still be making a decent sum of money at a cheaper price.

For instance, if they made the same net profit as a 360 controller, around $40. If they price the gamepad to make that $40 mark than they should price it about $40 over the production cost. Now at $150 that stands at $110, or at $100 that's $60. That is one expensive controller.

The other concept it to match the profit margin, or profit percentage, so at a $150 price with a profit margin of 450% like the 360 controller has, that's $33 or at $100 price is $22. So the controller, reasonably is between $22 and $60 or $33 and $110 in price to produce, quite the range and that's using 360's controller profit set up. Now I doubt it is $22, looking at the device itself but it isn't incredible expensive. Still that is one crazy retail price if it is $150. I don't see much justification in it unless they are banking on no one buying them outside of replacements.


1. Like I said before, gamepads will only be sold seperately in Japan at for the moment. Nintendo believe  Japan will be willing to swallow the high price, the west will not, hence why it will not be sold seperately here for a while until it can be done so at a cheaper price.

 

2. Final example. kinect cost $50 to manufacture when it was released, yet was sold for $150 seperately. When bundled with the console it didn't add $150/$100 to the price.