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Forums - Sales Discussion - Pachter: Wii PRICE CUT to $199 no later than November!!

senortaco on 08 September 2009

As I mentioned in another thread, I think all the pundits saying that a price cut will happen will undermind Nintendo more then anything.

Just look at what happen with the PS3. Price cut rumors, slim rumors I feel cause ALOT of people to wait to purchase, as you can see from first week sales.

...Depending on the dip in sales for the PS3 in the coming weeks, it will show the effects of repeated badgering of price cuts/slim...



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Slimebeast on 08 September 2009

^yeah, i agree greenmedic.



greenmedic88 on 08 September 2009
RolStoppable said:
greenmedic88 said:
If they only take a price cut as an "emergency tactic" that means any price cut is an open admission that the platform has peaked at best or is in a tailspin decline at worst. Looking at the YoY numbers, it's looking like the latter.

Is that really the message they want to send?

This is the point at which one has to stop quoting a theory, successful up to this point or not, and start reacting directly to changes in the market rather than ignoring them because "the theory's been working fine so far."

There are ways of dropping price on a product without sending the impression it's a panic induced drop to unload excess inventory and hit projections. SCE has done a pretty admirable job of doing this since the PS1 and nobody interpreted their price drops as "panic" but rather passing savings on improved efficiency/reduced hardware production costs directly to the customers.

A €200 price drop about six months after launch can very well be interpreted as panic move. Then again, consumers didn't see it as such and picked up a PS3. So I don't see any reason why a €50 price drop on the Wii after three or more years on the market could be seen as "panicking".

It wouldn't be.

That was a response to:

"What we are saying is that it goes against their strategy and the way they view the market. A price cut will only be taken as an emergency tactic, at least this is what will happen if Iwata continues to follow the Blue Ocean Strategy and doesn't make a panic move."

I don't think Demotruk speaks for everyone in this regard.

Like many others, I believe the Wii is currently overpriced based upon current production rates, production costs, available inventory, a significant reduction in sales rates and length of time on the market at current price. A price drop is due and Q4 2009 would be the perfect time to introduce one to reignite sales and hit Nintendo's projections for the year.



Demotruk on 08 September 2009
greenmedic88 said:
If they only take a price cut as an "emergency tactic" that means any price cut is an open admission that the platform has peaked at best or is in a tailspin decline at worst. Looking at the YoY numbers, it's looking like the latter.

Is that really the message they want to send?

This is the point at which one has to stop quoting a theory, successful up to this point or not, and start reacting directly to changes in the market rather than ignoring them because "the theory's been working fine so far."

There are ways of dropping price on a product without sending the impression it's a panic induced drop to unload excess inventory and hit projections. SCE has done a pretty admirable job of doing this since the PS1 and nobody interpreted their price drops as "panic" but rather passing savings on improved efficiency/reduced hardware production costs directly to the customers.

It would be an admission that they could not maintain the value of the product. They are going to fight against that by trying to increase the value of the product rather than drop the price to match the fall in value. Animal Crossing and Wii Music were essentially failures, and there was nothing to carry momentum forward into 2009, but fortunately in the games industry there is a way to regain momentum: games.

If it doesn't work, since more system selling games take months/years to make, they may have to do bundling or a price dropbecause there would be little option in the short term. Excitement for the system could otherwise decline even more, the Wii is not yet at the stage where it can be carried by third parties unfortunately.



A game I'm developing with some friends:

www.xnagg.com/zombieasteroids/publish.htm

It is largely a technical exercise but feedback is appreciated.

binary solo on 08 September 2009

I don't see how games in franchises that have already driven a lot of hardware sales will substantially increase baseline Wii sales. WSR didn't do it, Wii Fit II won't do it, NSMB probably won't have a lasting impact on sales either.

With PS3 there have probably been hu8ndreds of thousands, if not millions, of people saying to themselves "I'll get a PS3 when it comes down in price". A few, but not as many, might have been saying the same thing about 360 (well the HDD versions at least). Who is really saying they are waiting on Wii to get a price cut before they buy? And at $199 is that really the level at which those who are waiting for a Wii price cut will buy? My buying trigger for a Wii is the current PS2 price, same as my buying trigger for 360.

OTOH Wii doesn't need the sort of market rehabilitation that PS3 needed, so a move which boosts baseline sales by 10-15% or so is about all it needs. A $50 price cut might do the trick.

The other consideration is whether the Wii can drop in price by much with Nintendo sticking to it's strategy of selling the HW at a profit. A common jibe at Wii is that it is a re-packaged Gamecube wit motion control. If that is more or less the case it means Wii does not stand to benefit as much from the falling cost of technology, particularly like PS3 does. Most of Wii's tech is probably at a stable price, with only the motion control tech having much room to move. Evidence suggesting not much scope for movement while continuing to sell for a profit is in the UK price increase. Does this mean a $199 Wii is a break even price, or even a small loss per console? I dunno. Of course as the cost of PS2 production goes so should the cost of Wii production if it largely uses suped-up last gen technology.

I don't know about a $50 price cut for lifting HW sales substantially. A $100 cut however...



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Killergran on 08 September 2009

Oh noes! No Wii Pricedrop this year confirmed!



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Avinash_Tyagi on 08 September 2009
greenmedic88 said:
Those who insist when Pachter says anything regarding future trends in the gaming business, the exact opposite is a shoe in to happen.

He's probably close to about 50/50 on his predictions even though "game market predictor" is really not his occupation. He breaks down the available industry insider information and then typically throws out his opinion to the gaming media based on the compiled data. Right or wrong, at least he bases his opinions based upon a fairly broad pool of hard financial data as opposed to personal preferences and biases.


  He's pretty much zero when it comes to nintendo, I think he the guy who thought the DS would get crushed by the PSP and that the Wii would get crushed by the PS3 and 360



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

Lolcislaw on 08 September 2009

I mean it has to happen eventually, Wii has had this same price 2006...



Avinash_Tyagi on 08 September 2009
greenmedic88 said:

If it looks like Nintendo will miss their projections by a significant margin, you can bet the company they'll have an appropriate response. And at this stage in the game, new colors just won't cut it.

As far as bundles go, about the only one I could see as being a huge hardware mover would be a Wii Fit/Wii Sports bundle at $299, or about $40 less than purchased separately.

Assuming the balance board/Wii Fit is profitable at $90, and I'm almost certain that it is, it would cost Nintendo less than a $50 price cut off the base $249 Wii Sports bundle. A Wii Fit bundle makes the most sense considering it is the package most extended market consumers have been buying.

The other option Nintendo has, albeit less favorable, is to do the opposite and unbundle Wii Sports, offering the basic console at $199 and selling Wii Sports for $20-30. Presumably, many new Wii consumers would skip Wii Sports and simply pick up Wii Sports Resort instead, which still translates to a $250 initial sale for Nintendo.

Or Pachter could be right this time and we may well see the same Wii Sports bundle being sold in November at $199 which would likely spark a buying frenzy as would be expected with the first price cut since debut. Nintendo has been building up a LOT of unsold inventory this year and those who think consumers will blindly snap up all of them with out any significant game changers are probably kidding themselves. And no, New Super Mario Bros. and Wii Fit Plus are not significant game changers.

If the latter happens, I'd like to see who mans up among those who are swearing up and down that the idea of a price cut is impossible/unnecessary and says "Wow. Could I have been more wrong?! Pass me the Crow!"


  If Nintendo had thought they would miss their marks they would have cut them last quarter, but they stuck to them as well as saying no price cut, and they are a conservative company so they probably know sales will lift for the fall if they stuck with their projections



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)

Avinash_Tyagi on 08 September 2009
Lolcislaw said:
I mean it has to happen eventually, Wii has had this same price 2006...


  Yeah it'll happen, next year maybe



 

Predictions:Sales of Wii Fit will surpass the combined sales of the Grand Theft Auto franchiseLifetime sales of Wii will surpass the combined sales of the entire Playstation family of consoles by 12/31/2015 Wii hardware sales will surpass the total hardware sales of the PS2 by 12/31/2010 Wii will have 50% marketshare or more by the end of 2008 (I was wrong!!  It was a little over 48% only)Wii will surpass 45 Million in lifetime sales by the end of 2008 (I was wrong!!  Nintendo Financials showed it fell slightly short of 45 million shipped by end of 2008)Wii will surpass 80 Million in lifetime sales by the end of 2009 (I was wrong!! Wii didn't even get to 70 Million)