The idea is supposed to be that Nintendo shouldn't have to cut the price of the Wii if they are properly adhering to the Blue Ocean strategy. It is said by some (like Malstrom), that a cut would be a red-ocean strategy, something to get more combative with Sony and Microsoft.

I disagree. The Blue Ocean entails a struggle on its own, a struggle Nintendo has outlined before: the fight against consumer apathy. Obviously software needs to be the primary weapon against apathy. A console can be dirt-cheap and still worth less than that to a given consumer if that console lacks appealing software. However, it is highly likely that Nintendo has baited in a lot of people who are interested, but otherwise rather iffy on the whole thing. Fence-sitters, as it were. Maybe they know someone with a Wii, and like to play around with it a bit, and genuinely enjoy the software, but just can't bring themselves to put $250 down for it. More software isn't necessarily going to bring these fence-sitters in, if they're already hooked based on existing software, but can't be reeled in under current situations.

A price-cut could work very well in a Blue Ocean setting in this way. It would be a way to grab more of these "non-gamers/Blue Ocean gamers" who are enamored with the software, but need some extra encouragement. A significant number of these people have probably built up over the years, through the virtue of local multiplayer.

Now, it would also inadvertantly be a Red Ocean thing, since you could fight with Sony and Microsoft for a certain breed of casual gamer, the kind that was already into console gaming last generation, but aren't particularly avid and lack any real brand loyalty. People who are looking for replacements for their PS2's, perhaps. Nintendo could get more competitive for these "Red Ocean Casuals," but a cut would not be directed at them, but at the fence-sitters previously mentioned.

Thoughts?

Only as a last resort. If you have to do a price cut when there's no competition, you're not following the Blue Ocean Strategy very well.

Nintendo f'ed up last year with two games that were supposed to be important. If they f' up two years in a row, then they should do it as an emergency tactic after the holidays.

Nintendo has already proven that there are millions of potential customers who wanted games/exorcise but like motion controls more traditional controllers. If blue ocean is about accessibility, then it follows logically lowering the price can get it into more peoples hands. Especially in a recession $50-$100 can be enough for people to not buy the Wii.

I agree.

On your point about all the great software in the world won't make the fence sitters buy a console and/or a dirt cheap price, all one would need to do is look at the GameCube. It was 99 USD less than two years after it came out and had a slight resurgence in sales the 2003 holiday season (beating out Xbox for that holiday) but it still wasn't enough to take 2nd place overall.

On another point, if Nintendo indeed cuts the price of the Wii, that could be seen by the gamers (specifically HD gamers) that Nintendo is trying to compete with the HD twins, which is not the case. So Nintendo could be stuck in that hole as well.

I don't see Nintendo losing too much market share this upcoming holiday season. However, if the HD twins prices drop below 249.99 USD, then Nintendo will drop the Wii's price. I guarantee it.

Would it be a better strategy to add more value to the Wii package? For example bundling Wii Sports Resort and Wii M+.

It's true, I know people now that would buy a Wii if it were cheaper. $250 is just too high for a lot of casual gamers who just don't see themselves getting $250 worth of playtime out of it.

I think a reduced Wii Fit/Wii bundle would be a good way to move extra units or a 'value package' with Wii, Wii Play (+ controller), Link's Crossbow, Excitbot (+ wheel) and extra nunchuk. Basically increasing the value proposition. I think it must happen at some point and probably soon.

I think it is a little late for doing that alone.... though something like that with a new coloured Wii might help a little (more so in Japan)

If they acompany a price cut with some new bundles as well though, it could fare well. ie cut the price $50 for what you currently get, but have a seperate bundle that has everything the current one has but with the addition of Wii Sports Resort.. and extra controller+nunchuck and 2 Wii motion + add-ons for $275.... so you would get 2 games, and a 2-player set of controllers out of the box.

^I agree. It's more about value than price.

Well considering the Wii still outsold PS3 & 360 the week they had price cuts, I'm not sure Nintendo will be lowering the price.

The thread is about Blue Ocean Strategy, which involves non-competition, it's not about reacting to Sony or Microsoft (although that would be the normal purpose of a price cut)