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Forums - Nintendo Discussion - How Much Will The Wii U Drop!? <(^_^<)

 

The Wii U's First Price Cut Will Be...

$100 123 24.60%
 
$90 0 0%
 
$80 9 1.80%
 
$70 21 4.20%
 
$60 7 1.40%
 
$50 307 61.40%
 
$40 6 1.20%
 
$30 9 1.80%
 
$20 3 0.60%
 
$10 14 2.80%
 
Total:499
archbrix on 05 July 2013
Einsam_Delphin said:

Well as you said that was your last post, of which came way after the point you initially ignored me at. But meh, let's just move on already as I really don't care about all that junk. :L

 

Anywho, there's no magic required here. *Billy Mays voice* "Just change the 3 to a 2, it's that easy!" They may lose money now (I'm saying may because the 3DS and Wii U game sales may counter the losses), but they'll reap more cash later thanks to a bigger install base enabling their games to sell more and encouraging third partys to jump on board. Based on how Nintendo has sold consoles at a loss before, they too must see things this way, as there's no other reason to do that, atleast none that I can think of.

 

I don't see anything unrealistic about dropping the Wii U's price by $100. Infact, I only see the opposite as true, as people clearly don't like it's current price range, which includes $300. Due to that last part, it's hard for me to see a $50 drop helping much as the Deluxe model a.k.a. the actually selling model wouldn't be at a totally new price for the Wii U. Of course a $50 cut would help when weighed against the competition, but likewise a $100 cut would help more, as it'd put the Wii U even closer to PS360 and further away from PS4/XO. The 3DS didn't have nearly as much competition, yet it still got a larger than expected cut, so again it's logical to assume that the Wii U which is up against heavier competition should atleast see a similarly large cut.

I used my last post as an example because it was the most recent. My very second post in the thread addressed both of your points (why a hundred dollar drop right now is too much and why fifty would suffice) that you wrongfully accused me of lying about not ignoring later:

"They were selling the 3DS for a profit at $250 so when they cut the price by $80 it resulted in a (relatively) small loss per unit.  The WiiU was already selling at a loss shortly after launch.  It was stated that after selling a game with the system (probably a 1st party game at that) it turned a profit.  By the end of the year I wouldn't be surprised if the BOM was down enough that they were breaking even with each system sold - but a price drop is going to put them in the red again.  So if they drop the deluxe down to $300 (a full $100 less than the PS4) with a strong holiday lineup, they'll be moving plenty of units and not fall as deeply into the red.  Remember, we're talking about Nintendo here."

Respectfully, perhaps you should brush up on your reading comprehension?

This is also evident in your new post as it is just restating the same things I've already addressed as to why they don't make sense, so I'll just assume that's your silent way of saying "agree to disagree".



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Lonely_Dolphin on 05 July 2013
archbrix said:
Einsam_Delphin said:

Well as you said that was your last post, of which came way after the point you initially ignored me at. But meh, let's just move on already as I really don't care about all that junk. :L

 

Anywho, there's no magic required here. *Billy Mays voice* "Just change the 3 to a 2, it's that easy!" They may lose money now (I'm saying may because the 3DS and Wii U game sales may counter the losses), but they'll reap more cash later thanks to a bigger install base enabling their games to sell more and encouraging third partys to jump on board. Based on how Nintendo has sold consoles at a loss before, they too must see things this way, as there's no other reason to do that, atleast none that I can think of.

 

I don't see anything unrealistic about dropping the Wii U's price by $100. Infact, I only see the opposite as true, as people clearly don't like it's current price range, which includes $300. Due to that last part, it's hard for me to see a $50 drop helping much as the Deluxe model a.k.a. the actually selling model wouldn't be at a totally new price for the Wii U. Of course a $50 cut would help when weighed against the competition, but likewise a $100 cut would help more, as it'd put the Wii U even closer to PS360 and further away from PS4/XO. The 3DS didn't have nearly as much competition, yet it still got a larger than expected cut, so again it's logical to assume that the Wii U which is up against heavier competition should atleast see a similarly large cut.

I used my last post as an example because it was the most recent. My very second post in the thread addressed both of your points (why a hundred dollar drop right now is too much and why fifty would suffice) that you wrongfully accused me of lying about not ignoring later:

"They were selling the 3DS for a profit at $250 so when they cut the price by $80 it resulted in a (relatively) small loss per unit.  The WiiU was already selling at a loss shortly after launch.  It was stated that after selling a game with the system (probably a 1st party game at that) it turned a profit.  By the end of the year I wouldn't be surprised if the BOM was down enough that they were breaking even with each system sold - but a price drop is going to put them in the red again.  So if they drop the deluxe down to $300 (a full $100 less than the PS4) with a strong holiday lineup, they'll be moving plenty of units and not fall as deeply into the red.  Remember, we're talking about Nintendo here."

Respectfully, perhaps you should brush up on your reading comprehension?

This is also evident in your new post as it is just restating the same things I've already addressed as to why they don't make sense, so I'll just assume that's your silent way of saying "agree to disagree".



Okay fine, you weren't lying, so how about we move on now? And yes I am repeating myself just like I said I would be if we kept going on, as you haven't disproven what I said/I'm not sure if you're grasping what I'm getting at. When I say agree to disagree is when I mean agree to disagree, though I can't see how you can reasonably disagree with much of what I said as many facts and past instances are involved.

Lonely_Dolphin on 05 July 2013

I'ma put this whole thing into a simple perspective, in hopes that it'll make things easier for everyone. It'll sure help me out hehe.

-=Reasons for $100 drop=-
***Sales need to be ignited to grow install base so games can sell more down the road.
***Nintendo has recently shown they're willing to temporarily sell at a loss for the reason above.
***Based on it's terrible sales thus far, most people don't like the current $300-$350 price range, so a $50 drop would not help much due to the Deluxe being the model that sells.
***A similar move worked great for the 3DS, who needed it much less than the Wii U does now.
***3DS and Wii U game sales can help cover for losses, especially with all the games each system will have by the holidays.
***Would help deal with the heavy competition, both the short term ones in PS360 and the long term ones in PS4/XO.

-=Reasons against $100 drop=-
***They'll temporarily take losses selling Wii Us.

Let me know if I missed anything!

archbrix on 06 July 2013
Einsam_Delphin said:

Okay fine, you weren't lying, so how about we move on now? And yes I am repeating myself just like I said I would be if we kept going on, as you haven't disproven what I said/I'm not sure if you're grasping what I'm getting at. When I say agree to disagree is when I mean agree to disagree, though I can't see how you can reasonably disagree with much of what I said as many facts and past instances are involved.

I am grasping what you’re getting at; your points are crystal clear.  It just doesn’t make sense and I’ve tried to convey that to you, but I’ll try once more and then I must move on.  Let’s focus on what is probably the biggest flaw in your reasoning:  Past Nintendo consoles selling at a loss and the 3DS.

You really need to stop using the 3DS and its price drop as a metric for WiiU.  They really are apples to oranges comparisons.  To put things into perspective, the only Nintendo home console that I remember hearing sold for a loss at launch was the Gamecube.  More on that in a moment, but every other one of their consoles (or handhelds for that matter) either sold for a profit or broke even at launch.  If I’m wrong on that I’m sure someone can correct me but I know I read that somewhere.  The N64 is the only other one I question because I remember that it was supposed to launch at $249 and was then cut to $199 right before launch. 

But back to the Gamecube.  I read that it was selling at a rumored $7 to $10 loss per unit.  It became profitable very quickly.  By comparison, the PS2 lost over $100 per unit IIRC at launch at $299.  It was, after all, a DVD player in the year 2000 but unlike the PS3 the BOM came down pretty quickly.  The PS2 sold far, far more than the Gamecube during that gen from 2000 to 2006.  Despite the difference in install base, Nintendo made more profit in that time than Sony.  Now, much of that had to do with the booming GBA but despite that, the GC was a very profitable endeavor for Nintendo.  This is the reason why Nintendo had never, ever posted a yearly loss as a company since they’ve been in the games industry until recently.  They value profit more than they do bragging rights of console numbers.  This is why Nintendo never cut the Gamecube’s price similarly to what you are suggesting just to boost sales numbers.  As I said before, install base is important, but it’s a balancing act, and Nintendo is not Sony.  So keep this example in mind because it is important to my point; Nintendo will profit more as a company by smaller drops over time as production becomes cheaper than a huge drop just for the sake of install base and hope that third party support will come.

Why your 3DS comparison fails horribly is because it was selling at a nice profit at $250.  When they dropped the price by $80, it was then selling at a loss and it was about a year later before the hardware was profitable again:

http://www.destructoid.com/nintendo-no-longer-selling-3ds-at-a-loss-231943.phtml

Keep in mind that after 3DS became a loss-leading system (combined with less coming in at that point from the Wii and the expense of readying the WiiU) Nintendo posted their first ever loss at the end of fiscal year 2011 (end of March of 2012) of around $530 million.  While that’s definitely covered by the billions they made from the Wii/DS printing money, it’s still a historic first and a big black-eye for the company and Iwata.

Now, let’s consider the WiiU which Nintendo launched at the biggest hardware loss they’ve ever had before.  I know there was a rumor that it was between $40 to $46 per unit, and considering that Ninty themselves stated that after a game purchase it became profitable ($60 minus retailer, etc), that sounds plausible.  At the end of Nintendo’s next fiscal year (end of March 2013) Nintendo still posted a loss, albeit a smaller one.  This means that despite the 3DS being profitable since July 2012 and great game sales, Nintendo was still in the red.  Remember, Nintendo no likey the lossez…

So if the 3DS, which even after the price drop wasn’t losing them $40 to $46 per unit, took about a year to become profitable again, the WiiU hardware, which likely has a higher BOM cost, will - best case scenario - be breaking even by the end of the year.  Now apply your full $100 drop scenario.  Yeah… Despite the fact that install base is important for profit, $100 is just too much and the Gamecube scenario above will still garner them more.  This is why Iwata has been reiterating that WiiU will not have a price drop this year, because they absolutely positively do not want to post another loss come March 2014.  We’ll be lucky if they even drop $50 this year.  They have a strong lineup of games coming this year but if they do manage a $50 drop, the deluxe at $300 is only about $50 more than the seven year old PS3.  And being a full $100 less than the PS4 is huge.  They don’t have to worry about being further away than that until next year when the PS4 is back in stock, has more games, and Nintendo can afford to drop more without jeopardizing their profit margins. 

While the 3DS is doing very well for them, $100 drop for WiiU this year simply ain’t in the cards, man.



Lonely_Dolphin on 06 July 2013

^Well that's a lot of text, but even so you sound much more convincing now that you're directly responding to my arguments, not that you've convinced me or anything, since pretty much everything in the post above yours remains true.


The Wii U has practically mimiced the 3DS thus far, only in a much worse fashion. I'd say that makes them pretty comparable, other than a few differences like price n profitability, but even then there's still similaritys to be had as both systems were/are at unfavorable prices. Also, going by the 1 game sale makes a Wii U profitable thing, that means the Wii U has been profitable overall as according to VGC last I checked, it's sold about 3 million consoles and 7 million games. Even when you don't cout the bundled in Nintendo Land, the game sales out weigh the console sales.


Sure what they did with the Gamecube was good n all, but that was ages ago, so it doesn't matter as much as what's happened in the last two years, being the 3DS's large price cut and selling the Wii U at a loss. You say Nintendo don't like to lose profits, which is obviously true of course, but then why do they purposely sell things at a loss even if it's only temporary? You also say $100 is too much, but how do you know? You'd have to take into account 3DS and Wii U game sales (which'll be way better this year btw) aswell as everything else that gives or takes away money from em. Only Nintendo really knows if it's too much or not.


I only said it's possible they'll price cut this year. I'm personally expecting it to happen sometime next year as holidays + moar games should keep it alive for the rest of this year, and the money they make during that time will help lessen the incoming losses.

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zorg1000 on 06 July 2013
archbrix said:
Einsam_Delphin said:

Okay fine, you weren't lying, so how about we move on now? And yes I am repeating myself just like I said I would be if we kept going on, as you haven't disproven what I said/I'm not sure if you're grasping what I'm getting at. When I say agree to disagree is when I mean agree to disagree, though I can't see how you can reasonably disagree with much of what I said as many facts and past instances are involved.

I am grasping what you’re getting at; your points are crystal clear.  It just doesn’t make sense and I’ve tried to convey that to you, but I’ll try once more and then I must move on.  Let’s focus on what is probably the biggest flaw in your reasoning:  Past Nintendo consoles selling at a loss and the 3DS.

You really need to stop using the 3DS and its price drop as a metric for WiiU.  They really are apples to oranges comparisons.  To put things into perspective, the only Nintendo home console that I remember hearing sold for a loss at launch was the Gamecube.  More on that in a moment, but every other one of their consoles (or handhelds for that matter) either sold for a profit or broke even at launch.  If I’m wrong on that I’m sure someone can correct me but I know I read that somewhere.  The N64 is the only other one I question because I remember that it was supposed to launch at $249 and was then cut to $199 right before launch. 

But back to the Gamecube.  I read that it was selling at a rumored $7 to $10 loss per unit.  It became profitable very quickly.  By comparison, the PS2 lost over $100 per unit IIRC at launch at $299.  It was, after all, a DVD player in the year 2000 but unlike the PS3 the BOM came down pretty quickly.  The PS2 sold far, far more than the Gamecube during that gen from 2000 to 2006.  Despite the difference in install base, Nintendo made more profit in that time than Sony.  Now, much of that had to do with the booming GBA but despite that, the GC was a very profitable endeavor for Nintendo.  This is the reason why Nintendo had never, ever posted a yearly loss as a company since they’ve been in the games industry until recently.  They value profit more than they do bragging rights of console numbers.  This is why Nintendo never cut the Gamecube’s price similarly to what you are suggesting just to boost sales numbers.  As I said before, install base is important, but it’s a balancing act, and Nintendo is not Sony.  So keep this example in mind because it is important to my point; Nintendo will profit more as a company by smaller drops over time as production becomes cheaper than a huge drop just for the sake of install base and hope that third party support will come.

Why your 3DS comparison fails horribly is because it was selling at a nice profit at $250.  When they dropped the price by $80, it was then selling at a loss and it was about a year later before the hardware was profitable again:

http://www.destructoid.com/nintendo-no-longer-selling-3ds-at-a-loss-231943.phtml

Keep in mind that after 3DS became a loss-leading system (combined with less coming in at that point from the Wii and the expense of readying the WiiU) Nintendo posted their first ever loss at the end of fiscal year 2011 (end of March of 2012) of around $530 million.  While that’s definitely covered by the billions they made from the Wii/DS printing money, it’s still a historic first and a big black-eye for the company and Iwata.

Now, let’s consider the WiiU which Nintendo launched at the biggest hardware loss they’ve ever had before.  I know there was a rumor that it was between $40 to $46 per unit, and considering that Ninty themselves stated that after a game purchase it became profitable ($60 minus retailer, etc), that sounds plausible.  At the end of Nintendo’s next fiscal year (end of March 2013) Nintendo still posted a loss, albeit a smaller one.  This means that despite the 3DS being profitable since July 2012 and great game sales, Nintendo was still in the red.  Remember, Nintendo no likey the lossez…

So if the 3DS, which even after the price drop wasn’t losing them $40 to $46 per unit, took about a year to become profitable again, the WiiU hardware, which likely has a higher BOM cost, will - best case scenario - be breaking even by the end of the year.  Now apply your full $100 drop scenario.  Yeah… Despite the fact that install base is important for profit, $100 is just too much and the Gamecube scenario above will still garner them more.  This is why Iwata has been reiterating that WiiU will not have a price drop this year, because they absolutely positively do not want to post another loss come March 2014.  We’ll be lucky if they even drop $50 this year.  They have a strong lineup of games coming this year but if they do manage a $50 drop, the deluxe at $300 is only about $50 more than the seven year old PS3.  And being a full $100 less than the PS4 is huge.  They don’t have to worry about being further away than that until next year when the PS4 is back in stock, has more games, and Nintendo can afford to drop more without jeopardizing their profit margins. 

While the 3DS is doing very well for them, $100 drop for WiiU this year simply ain’t in the cards, man.

 

Nice post, I agree completely with this. Also another reason we know Nintendo wont do a big cut this year is they said there number one goal is too post a profit this fiscal year. This rest of this year will just be about new games, marketing and holiday bundles. Im assuming Wii U will be selling at a profit by the end of the year plus software sales of big titles like 3D World, DKC, Wii Fit, Animal Crossing, Monster Hunter 4, Pokemon X/Y and with 3DS profiting, they should make a decent profit this year.

Im guessing in April they will drop the Basic to $199 and discontinue It and drop the Deluxe to $299 bundled with Mario Kart 8.



When the herd loses its way, the shepard must kill the bull that leads them astray.

RedInker on 06 July 2013

I will go with a $50 cut in time for christmas. Should give those xmas figures a boost.



Lonely_Dolphin on 06 July 2013
RedInker said:
I will go with a $50 cut in time for christmas. Should give those xmas figures a boost.


The holidays will already give it a boost though. If they're gonna do a price cut this year, it should be in August or September.

Cold-Flipper on 06 July 2013

Einsam_Delphin said:

Aha, so you see, it's all about them long-term software sales, as why else would they ever sell their systems at a loss if even for a short period of time. I don't see the risk in a $100 drop coinciding with key releases, as the same tactic worked out for the 3DS. Besides, they're gonna drop the price to that point and beyond sooner or later anyhow.

 

I forgot why we're debating over which console Nintendo is focusing on, but ahwells lol. All these games we're seeing now weren't made this year, but have been in development for years. They likely decided to shift game development in the 3DS's favor after it's slow start, but that's just speculation on my part. I do expect the Wii U to be getting development focus right now though, and so we could expect a 3DS-like game rush in 2015.

Long-Term thinking is fine and all but not if that means taking a big loss on systems. As for the bolded: Yes, but once they can actually break even with it or take a slight loss. You can't take a big loss from a business perspective. 

I'd expect a big Wii U game-push in 2014. It normally happens during the 2nd full year for every system. 2013 was 3DS's 2nd full year and Wii's was in 2008. 

The following post was spot on so read it again!

archbrix said:

I am grasping what you’re getting at; your points are crystal clear.  It just doesn’t make sense and I’ve tried to convey that to you, but I’ll try once more and then I must move on.  Let’s focus on what is probably the biggest flaw in your reasoning:  Past Nintendo consoles selling at a loss and the 3DS.

You really need to stop using the 3DS and its price drop as a metric for WiiU.  They really are apples to oranges comparisons. To put things into perspective, the only Nintendo home console that I remember hearing sold for a loss at launch was the Gamecube.  More on that in a moment, but every other one of their consoles (or handhelds for that matter) either sold for a profit or broke even at launch.  If I’m wrong on that I’m sure someone can correct me but I know I read that somewhere.  The N64 is the only other one I question because I remember that it was supposed to launch at $249 and was then cut to $199 right before launch. 

But back to the Gamecube.  I read that it was selling at a rumored $7 to $10 loss per unit.  It became profitable very quickly. By comparison, the PS2 lost over $100 per unit IIRC at launch at $299.  It was, after all, a DVD player in the year 2000 but unlike the PS3 the BOM came down pretty quickly.  The PS2 sold far, far more than the Gamecube during that gen from 2000 to 2006.  Despite the difference in install base, Nintendo made more profit in that time than Sony.  Now, much of that had to do with the booming GBA but despite that, the GC was a very profitable endeavor for Nintendo.  This is the reason why Nintendo had never, ever posted a yearly loss as a company since they’ve been in the games industry until recently.  They value profit more than they do bragging rights of console numbers.  This is why Nintendo never cut the Gamecube’s price similarly to what you are suggesting just to boost sales numbers.  As I said before, install base is important, but it’s a balancing act, and Nintendo is not Sony.  So keep this example in mind because it is important to my point; Nintendo will profit more as a company by smaller drops over time as production becomes cheaper than a huge drop just for the sake of install base and hope that third party support will come.

Why your 3DS comparison fails horribly is because it was selling at a nice profit at $250.  When they dropped the price by $80, it was then selling at a loss and it was about a year later before the hardware was profitable again:

http://www.destructoid.com/nintendo-no-longer-selling-3ds-at-a-loss-231943.phtml

Keep in mind that after 3DS became a loss-leading system (combined with less coming in at that point from the Wii and the expense of readying the WiiU) Nintendo posted their first ever loss at the end of fiscal year 2011 (end of March of 2012) of around $530 million.  While that’s definitely covered by the billions they made from the Wii/DS printing money, it’s still a historic first and a big black-eye for the company and Iwata.

Now, let’s consider the WiiU which Nintendo launched at the biggest hardware loss they’ve ever had before.  I know there was a rumor that it was between $40 to $46 per unit, and considering that Ninty themselves stated that after a game purchase it became profitable ($60 minus retailer, etc), that sounds plausible.  At the end of Nintendo’s next fiscal year (end of March 2013) Nintendo still posted a loss, albeit a smaller one.  This means that despite the 3DS being profitable since July 2012 and great game sales, Nintendo was still in the red.  Remember, Nintendo no likey the lossez…

So if the 3DS, which even after the price drop wasn’t losing them $40 to $46 per unit, took about a year to become profitable again, the WiiU hardware, which likely has a higher BOM cost, will - best case scenario - be breaking even by the end of the year.  Now apply your full $100 drop scenario.  Yeah… Despite the fact that install base is important for profit, $100 is just too much and the Gamecube scenario above will still garner them more.  This is why Iwata has been reiterating that WiiU will not have a price drop this year, because they absolutely positively do not want to post another loss come March 2014.  We’ll be lucky if they even drop $50 this year.  They have a strong lineup of games coming this year but if they do manage a $50 drop, the deluxe at $300 is only about $50 more than the seven year old PS3.  And being a full $100 less than the PS4 is huge.  They don’t have to worry about being further away than that until next year when the PS4 is back in stock, has more games, and Nintendo can afford to drop more without jeopardizing their profit margins. 

While the 3DS is doing very well for them, $100 drop for WiiU this year simply ain’t in the cards, man.

 


Lonely_Dolphin on 06 July 2013
Cold-Flipper said:

Einsam_Delphin said:

Aha, so you see, it's all about them long-term software sales, as why else would they ever sell their systems at a loss if even for a short period of time. I don't see the risk in a $100 drop coinciding with key releases, as the same tactic worked out for the 3DS. Besides, they're gonna drop the price to that point and beyond sooner or later anyhow.

 

I forgot why we're debating over which console Nintendo is focusing on, but ahwells lol. All these games we're seeing now weren't made this year, but have been in development for years. They likely decided to shift game development in the 3DS's favor after it's slow start, but that's just speculation on my part. I do expect the Wii U to be getting development focus right now though, and so we could expect a 3DS-like game rush in 2015.

Long-Term thinking is fine and all but not if that means taking a big loss on systems. As for the bolded: Yes, but once they can actually break even with it or take a slight loss. You can't take a big loss from a business perspective. 

I'd expect a big Wii U game-push in 2014. It normally happens during the 2nd full year for every system. 2013 was 3DS's 2nd full year and Wii's was in 2008. 

The following post was spot on so read it again!
I'd think it'd always be worth it to take a loss if it means you make much more later than you lost initially, unless the loss now would cause you to go bankrupt, but that's not likely the case here. Since Nintendo isn't just going to vanish within a year, long-term is uber important, especially with how long this generation could last going by the previous one. Of course I'm no business major so perhaps there's more to it than that. What I do know for sure though, is that we don't even know how big a loss overall they'd be taking, if any. Let's just say that decide to $100 price cut around MK8's release. Let's also assume that by that time, Wii U is paying for itself. So with a $100 drop, I'd think it take 2 or 3 Wii U game sales to make a console profitable. Now with MK8, SM3DW, SLW, Wii Fit U, Pikmin 3, DKCTP, and many others having released already at this point, and oncoming titles like SSB4, Yoshi Yarn, SMT x FE, etc., plus the $100 drop increasing overall game sales, I think it's safe to say a favorable game to console ratio can be reached. Then of course there's the 3DS which should really be rocking by this point. So yeah they'll still be selling Wii U's at a loss, but overall I think they'd still be profitable.

I already responded to his post, which is really just a uber long n elaborate version of "Nintendo would be selling Wii U's at a loss," a point I've already made note of. I mean, I understood that fact before I even made this thread, as I thought that's just how price drops usually work. I just think that given the Wii U's current situation, the reasons for a price drop outweigh this one reason against it, which I really don't think is as big a deal as it's being made out to be due to their other means of profit.