Not necessarily.  Look at the changes in some of the previous generations of consoles.  They improved the specs of the systems to make the systems more powerful.  Take the NES to Super Nintendo.  What new features were introduced in the system? 

As for features, I'm not talking about the power of the consoles; the uniqueness of the Wii's style and more interactive control system (wii remote, balance board) is a main draw for the system.  But if the release a similiar system with just a boost in "power", I just don't see a reason for casual gamers to pick it up.  I wouldn't be surprised if it does happen though.

@greenmedic88

I agree that the hype can't last forever.  This will be the last holiday where demand will out strip supply.  I don't think it will be nearly as bad the last two holidays and the premium they will command will be no where near what it was. But there will still be a premium after the initial holiday rush.  The systems are at lasting a couple of hours before they fly off the shelf and you don't have people lining up when shipments are coming in.  The Tickle me Elmo comparison was just to show how crazy parents can be in order to make sure their kid has the "it" gift for the holiday, nothing more.

Also I've enjoyed the discussion.  It's always good to see someone elses view on a subject.  It's what makes a man wiser.

yesssssssss be afraid nentendoo, you'll never see my money mouhahahahaha now you'll go bankrupt.

Potentially, as early as Q2 2009. It depends entirely upon how close to complete sell through the Wii hits this season, the odds of which I'd say are pretty good (good enough for me to continue going long on NTDOY despite the huge drop my stake has seen).

But if I were one of those thrifty budget console consumers waiting for a price drop, I wouldn't be holding my breath for a drop that early.

As for profit per unit, considering that Nintendo was making about $50 per unit upon launch, it's fairly safe to say that they they're earning anywhere between $100-150 per unit two years later, which is a pretty huge mark up. Either way, Nintendo has a huge amount of flexibility when it comes to pricing due to their Day 1 product profit plan.

It's pretty much selling like there's no tomorrow anyway right???

NINTENDO: Shit we can RAISE the price if we want!!!

2010

A. The sequel to 2001.
B. The score of a football game (American).
C. The year the Wii finally drops in price.

Yes, hype cannot last forever. I think by going into a third short-supply holiday shopping season that it is real demand and not hype. The Wii has almost outsold the competition combined at 36M -- pretty good for a console that was supposed to be DOA and sell 20M-25M lifetime.

The Wii does not need a price drop because it is (a) the lowest price point of a full-featured console and (b) it still has demand greater than supply.

(I realize the Arcade Xbox 360 is cheaper than the Wii in all markets now. But with so much of the Xbox 360 depending upon the HDD, how much longer will the Arcade be supported? Microsoft now sells an upgrade kit for people who realize that for NXE, Netflix, etc. they need more than the Arcade offers).

Mike from Morgantown

Why don't they cut? because they are making huge profits on dirt cheap hardware. I wouldn't cut either.

agreed, if its always being sold out why drop the price. even though the only reason its always sold out is because nintendo is smart. basic economics, they don't produce enough wii's, supply is low, demand is high, when this happens the value of their products rise.

You can expect the first wii Price cut to happen in 2010. No Way its happening before then.

No matter how much you delude yourselves into thinking Nintendo is deliberately doing this, it's not going to magically give Nintendo's people that motive.

Nintendo can only make more money with more supply. And keeping the price steady is not a reason either. They need profit and growth.