I have to disagree with you there. Nintendo won't base their price on the competition, they'll base their price on their own console, and as long as it keeps selling at high levels there will be no need for a price cut. We will see new colours and some different game bundle options, but I imagine that there won't be a price cut for a long time.

There absolutely will not be a Wii price cut this year. It's becoming more and more clear every week that the Wii will continue to sell out through the holidays so there's no point for a price cut yet.

when the Wii becomes easy to find a good period of time (not scattered reports of Wii's on Amazon or the random lonely Wii on a Wal-Mart shelf but actually available) and the other consoles price becomes competitive then we can start talking abotu a Wii price cut. Personally, I'm guessing the end of summer 08.

Hmmm people need to remember that many people don`t buy the Wii because its low price, but because it has the Wiimote, Wiisport, etc. So I don`t think a price cut is needed. I expect one next year, probably when WiiFit is released. By that time, I suppose Nintendo should be getting at least $100 per Wii. A drop to $150, together with a 360 drop to $300, would make things very bad for Sony.

 I disagree there. They cut the price if they can make more money with a lower price. For that they need to produce (or can produce) at a much higher level than they can sell. That doesn't mean the demand needs to drop. 

Think of that this way (Following is a fantasy world on the numbers but not on the conclusions):

Lets say they make at the moment 100$ a consol and sell 1 Million per month:

-> 100 Million profit.

Lets say they could sell 2.1 Million per month with 50$ profit:

-> 105 Million profit.

As a company you will do the seconds one. Because you would make more profit. So demand doesn't need to drop nor has it to be low for a company to do a price cut. So nintendo cuts the price (as all others companys) if they can make more money with a lower price.

I just doubt that will happen soon. I'll say summer 08 or later.

Except that it is extremely costly in the long term to increase production. So, a fifty price drop and doubling production to 2.1 million per month *may* mean they lose a hundred dollars a console instead of making a hundred.  And, of course, selling the hardware isn't their primary goal here -- they make most of their money from selling and licensing games.

Even if it was as simple as you suggest, a console company would not necessarily do the latter because of a slightly increased profit. Perhaps they want to sell as many as they can at their top price point before getting the audience who will buy it at the next price point down.

Or perhaps they're wiling to take a huge loss to increase their installed base. Consider the example of Sony: they're *losing* more money per unit sold on their $500 PS3 and yet they're bragging about selling more consoles (and losing more money). It's madness, isn't it!? The strategy can be complex.

As for the Wii's price drop, stof stated correctly when he said that Nintendo will not look to their competition for pricing strategy. They'll drop it when it makes sense for them, and that probably won't be until they are quite a bit ahead in production and sales have dropped off to quite an extent. I'd give it a 50/50 chance of happening in 2008 and certainly not until 2H 2008.

Sorry, i said the numbers are mad. And yes, sony sell at a loss, because they think they will make more $$ in the long run. All i was trying to say, nintendo does the same. For that demand has not to go down! And I didn't say the 50$ is only for the console, did I? Yes it was an simple example, didn't change the point though.

They cut the price if they think they can make more $$ with a lower price. :)

They wont cut the price, if it selling amazingly and making them more money why would in there right minds cut the price? I repsect your opinion, but just think about it.

There won't be a price cut until 2009 I think. Next year they will offer a couple more Wii paks (more pack-in games) to add value - instead of cut the price.

Has the DS received a price cut yet? I remember it launching for the same price that it is today (now you can get a Lite + game for the same price).

Its irrelevant as long as the Wii continues to sell out. There are still plenty of places around the world where it hasn't launched. Not sure if they will, but I'm sure they will love to launch in China at some point (esp. with Olympics & Mario/Sonic...).

If they reduce manufacturing costs, they keep the price the same - and rack in even MORE profits. I can't imagine why they wouldn't want to do this ;)

And rather than drop the price by $50, they add an extra title to the Wii pak. Say Brain Training, or Excitetruck - or even Strikers (encourages people to go online). Game costs them an extra $2-5, and loss of sales a couple more dollars. Still make $40 more than just dropping the price.

...

It would be pretty funny if the 360 or PS3 ended up cheaper than the Wii - and still sold less units ;)

As as long as the Wii continues to sell out, they wouldn't make more $$ with a lower price, would they? If they start up a higher production this year, for example to have enough for christmass, it could be they "overproducing" next year, with the same level of demand. Don't say it will happen that way, just say there are realistic outcomes for a price cut at the same level of demand just to get it higher :)