hmm guess wisdom doesnt come with age for everyone

LOL, here we all go again!!! I can see the Wii's price being cut by $50 at the end of 2009 / early 2010. MAYBE in mid 2009 at the least and the price'll go down about ten percent IF DEMAND is not as good as it is today. I hate these articles and will continue to hate them.

Wii only need a price cut when sell less than 150k WW

I just posted some *burn* at the end of the article. I didn't see any posts agreeing with bruce yet.

Funny article, but more apropriate for the beginning of april if you know what I mean.

 Pachter rags on himself for what he gets wrong quite a bit and is honest in saying he is a financial analyst and not really as games analyst...whatever that means.

Good addition. As much flak as Pachter takes around here, he seems like a legitimately cool guy and I'm sure his job is considerably more complicated than it seems from the outside.

Bruce is an idiot. Why cut the price when you cannot even meet demand at the original price. What the PS3 and 360 do is up to their makers but Nintendo will do what is right for Nintendo and their shareholders.

I've criticized Bruce before for being wrong, biased or stating the obvious. In this case I think he deserves some knocks for some of what he says, but others are essentially correct.

Most of his argument is sound: He is not saying the Wii HAS to make price cuts, but that it has to be prepared to do so quickly when the time arrives.

It is looking more and more like Nintendo (NTDOY.PK) may have no option to make the Wii cheaper at retail, despite what Satoru Iwata says. Here’s why:

1. It has been at the same price for a long time now, during which it has become a lot cheaper to manufacture, especially with the volumes being churned out. Nintendo has been making a profit in every unit from the beginning, so there is plenty of room to drop the price. This is not an argument that they MUST drop the price, but that, unlike MS and Sony, they can do so easily without biting into their profits

2. The company is ramping up production to 25 million units a year. Initially these will just meet the backlog of demand, but once that is done it will need to use the price mechanism to shift them. Increased supply WILL reduce demand - that's basic business logic. EVENTUALLY, the demand and supply will equalize, which is when the price must be cut.

3. Nintendo's release schedule is looking very weak. Right now we have Super Smash Bros, Brawl, Mario Kart and Wii Fit. Then nothing mega and lots of shovel ware. Compare that with the PS3 and 360. This is his most foolish statement, despite the fact that it is, on it's face, 100% true. Sony is looking at RE5, MGS4 and FF13 this year (maybe). The 360 has RE5, Halo Wars, Fable 2 and GoW2. There is nothing ON THE WII'S SCHEDULE to compete with these. Thus, the statement is true. However, it is just not credible to believe that Nintendo would release SSBB, MKWii, and WiiFit - clearly their 3 biggest titles to date next to SMG- within 60 days of each other in the largest gaming market, and leave itself nothing of note for the summer, fall, or holiday season. It is almost certain that Nintendo (or a third party working with them) will reveal some big projects for later in the year which will help sustain demand. Perhaps Bruce realizes this, but chose to go just with what we know, but in that case he really should have tossed some qualifiers into this statement.

4. GTA IV. This is going to transform the balance in the market strongly in favour of the HD consoles. The Wii is going to look increasingly last gen.This...OK, I smell some fanboyism here, but it's on both sides. GTA4 WILL help move HD consoles, and will shift the market more in their direction - and Wii owner who doubts that is a fool. But anyone who believes the shift will be so subtantial as to start to bring about parity between the 3 consoles (let alone put Wii at a disadvantage) is a fool AND an idiot.

5. To make the most money out of the Wii back catalogue of games, Nintendo needs as many platforms out there as possible. At a lower price it will sell more Wiis and milk it on the software.Nintendo has a near 100% sell through rate. A price cut won't get them off the shelves any faster AT THIS POINT. However, I think he is clearly basing this on his initial premise that, AT SOME POINT, Wii's will stay on shelves for more than 30 minutes - and I think we can all agree that this day will come AT SOME POINT, and at that point, Nintendo should be prepared to make the cut.

6. The Microsoft Xbox 360 price cuts now make the Wii look very expensive. You get a whole lot more for your money with the 360.This is a subjective argument, and it would resonate more if North America saw a real 360 price cut at this point. Eventually, though, he will be right - the 360 will get close to the Wii's price point and make the Wii look like less of a deal. But that time has not yet come.

So when is this going to happen? Q3 of 2008 is my best bet. But it could be a little later, depending on what the market tells Nintendo."Best bet" still implies a lot of uncertainty. He's willing to push it later, meaning, I guess, back to Q4 or even Q1-2 2009. That I think is more reasonable. I will be surprised if Wii is still at $250 come the 2009 holiday season.

So... basically a valid point, albiet backed up with some questionable arguments and a very iffy prediction - Nintendo should be ready to cut price the at a moments notice. It's a blindingly obvious point, of course, and I am sure Nintendo's twelve steps ahead of us in this regard anyway.

I've seen worse.

Just because Nintendo can afford to reduce the price doesn't mean that they will reduce the price; it is quite possible that they will use the additional revenue to bundle games/accessories with the Wii to increase its value to consumers being that the price point doesn't seem to prevent people from buying the system.

For over a year people have expected the Wii's demand to drop down after Nintendo increases production and the backlog of demand is satisfied ...

After the long (LONG) lead time for Twilight Princess, Nintendo said that they were not going to announce games years in advance of releasing them. We have seen how this strategy works lately with Mario Kart really only being demonstrated a couple of months before release. It is very likely that the holiday line-up for the Wii will be (roughly) equal to whatever the PS3 and XBox 360 are able to release.

Bioshock, Halo 3 and Call of Duty 4 say hello ...

The list of games that already outshine the Wii on a technical basis and are amazingly popular grows every day, yet the Wii continues to outsell the PS3 and XBox 360 (often outselling them combined). One could argue that when Wii Fit is released in North America it will make the PS3 and XBox 360 look increasingly last gen.

True enough, but the Wii is already the fastest selling console in history and has yet to show any signs of slowing down; until the Wii is available in stores there is (really) no need to lower the price to sell more consoles.

More is a subjective term, and (as with my first point) Nintendo may choose to increase the value of their bundle rather than lower the price of the system.