“We currently have no plans to cut the price of Wii. Current talk of price cuts is rumour and speculation. This is rumour and speculation as Nintendo have made no announcements on price. Furthermore this is most likely retailer led much in the same way retailers in the UK offer price promotions on our products.” – Nintendo rep

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Anything a nameless ‘rep’ says, it is often a lie. Advertising campaigns are already getting underway.

Why Nintendo is going this direction is up to debate. My current hypothesis is that Nintendo is bending over and doing whatever third party companies want. Remember, it was this company that even designed a controller specifically for one game for a third party company which had never been done in the history of the company (and many Nintendo employees were very pissed about this. Iwata just laughs at his employees’ complaints in the “Iwata Asks” interview).

Third parties do not like, and will never like, Nintendo because they see Nintendo as a  primary software competitor. They are hostile to New Generation values. Third parties are pushing Nintendo to turn the Wii into a low tier industry console. What I mean by that is to keep pushing for Wii’s price down to become a post-PS2 system where they make their ‘industry’ products to rake in money so they can spend it on their ‘art’ in the HD systems. They have no interest in taking the Wii seriously outside of its revenue generating creation with the Expanded Audience. In fact, most third parties are actively hostile toward the Expanded Audiences since they won’t be buying the games they really want to make.

Nintendo’s fall didn’t begin with the N64, Virtual Boy, or with the 16-bit generation. It actually began in the 8-bit generation. Nintendo began to overshoot their audience in making games more complicated and more time consuming. The simple joys of the early NES sports games which attracted many people, for example, were never replicated later on in the NES lifecycle let alone in other Nintendo generations. Nintendo had so many problems with Sega in the 16-bit generation not because of Sonic and ‘blood’ but because of the sports game players who were flocking to EA’s Genesis sports games. This is why sports was the launch game for the Wii. Nintendo wanted those people back.

After several years of successful business moves, Nintendo is repeating history just like on the NES. While future historians will write that Nintendo’s fall came from the succeeding generation or sometime in the future, it is actually occurring now. The NES explosion allowed Nintendo to coast to the 16-bit generation. Had it not been the arrival of a 2d platformer (Donkey Kong Country), Sega would have taken the crown for the 16-bit generation.

The Wii price cut appears to be a move of appeasement to the dictates of the “industry” rather than the dictates of the “revolution”. Nintendo would rather throw the “revolution” overboard just to get the “industry” to like them.

Sounds like I’m over-reacting? Take a closer look. After Wii Fit, Nintendo has pretty much stopped doing the “Revolution”. And the “Revolution” is, of course, spreading gaming to the masses. There was a massive campaign and effort to put Wii Fit in front of people. And with that, along with the original Wii launch, it created new gamers. But since then, Nintendo has gotten extremely lazy. More lazy then I have seen any company in recent memory.

They decide to make sequels to the games they have already put out on the Wii. Sequels to Wii Sports, Wii Fit, and even games that didn’t create new gamers like Super Mario Galaxy.

They decide to make many ‘user generated content’ games which are games with no content. This is so lazy. Make the customer provide the content for the game? Give me a break!

Now, instead of putting out interesting new software to increase the sales of the Wii, Nintendo is taking the ‘easy path’ of slashing the price.

To those dorks who say, “This is the fourth holiday season of Wii not having a price cut, it must have one!” Remember that this time, last year, the Wii was still sold out in America which no home console had ever done.

We have never seen what the holiday sales for the Wii is at its regular price when demand had not exceeded supply in America. Of course, now we never will.

There is something about success in the console market that breeds stupidity in executives. Such success makes them believe they are ‘business geniuses’ and all, and then they act with a strut. The success of the Playstation obviously went to Kutaragi’s head, and he made the turkey called ‘Playstation 3′. The success of the DS and Wii clearly has gone to Iwata and Miyamoto’s heads where they enthusiastically created the turkey of ‘user generated content’ games (which, interestingly, occurred with Will Wright as the success of the Sims poisoned him to make the turkey known as ‘Spore’).

The price cut indicates a strategy move that is moving AWAY from what made the Wii and DS successful in the first place. When the DS was being outsold by the PSP, Nintendo didn’t keep dropping the price. They put out Nintendogs, Mario Kart DS, and other games which caused the DS to eventually become sold out in Japan. When the DS stopped being sold out in Japan, Nintendo didn’t cut the price. But imagine if they did. It would have been a dumb move then. It parallels the situation with the Wii in America.

The difference is that third parties are not embracing the Wii as they did the DS. This is why I suspect the price cut could be in the vein of ‘third party appeasement’.

However, there is another difference: the Wii is disruptive, the DS is only merely innovative. The new generation values of the Wii are greeted with hostility by the “industry” because it seeks to disrupt the “core market”. The only third party response for the Wii will be in making “industry” games (i.e. games designed to maximize revenue and not to maximize customers, big difference between the two) which means to use the Expanded Audience as some sort of money pie. It is like Hollywood putting out a few kids movies to make money to spend that money on their ‘art’ movies that don’t make any money.

Iwata also has a major credibility problem now. He says one thing to investors and then does another. The lack of strategic consistency to the company and its business mission has to be extremely alarming. I wouldn’t trust anything Iwata says from here on out.

In history, most revolutions are disappointing because the ‘revolutionary’ ends up not truly interested in changing the structure. To the contrary, the ‘revolutionary’ only wants to be the king and to keep the old structure in place. And this is what we’re witnessing happen with Nintendo. They have no interest in truly dismantling or disrupting the “Game Industry”, they only want to be on top of it.

Malstrom sounds like a jilted girlfriend that's found out her boyfriend was just trying to get into her pants and not all about the romantic phrases he used to pick her up in the first place.

Blue Ocean is just a buzz word Nintendo uses when it serves their purposes. Push comes to shove, Iwata wants to win and will use any reasonable method in his aresenal (blue ocean, red ocean, purple ocean ... whatever) to get the job done.  

That simple. That's Iwata, he's not like Yamauchi who just sat idly by as Sony basically took Nintendo's market share without any fight whatsoever.

You listen to Iwata in interviews and its clear -- he pays attention to week to week and recent sales trends. Nintendo is not just a profit oriented company, they have learned (the hard way) that when you don't have marketshare and you don't aggressively protect marketshare -- your profits will dwindle in time too because you become irrelevant.

The DSi was entirely a response to the rising PSP sales and dropping DS sales in Japan last year for instance IMO (it come out in Japan months before meandering over to the West). Nintendo would not have released that model otherwise. They will react when they see their hardware share dropping.