Friday, September 25, 2009

Nintendo cuts Wii price by twenty percent



Nintendo has cut the price of its Wii console by twenty percent to $199.99 in the US and by an equivalent amount in Japan. Nintendo's European media site makes no mention of the move, at least not in German. It seems that most of Europe will not benefit from a price cut, although France apparently will (according to the French news agency Agence France Press). There are conflicting reports regarding this territory. Previous rumours mentioned that European Wii bundles may be upgraded by a copy of ´Wii Sports Resort´.

It is the first price cut for the console, after a record-breaking period of almost three years. The move vindicates earlier rumours and is in keeping with my editorial below. In a press release, the company details the decision:


The new $199.99 Wii price point delivers the full iconic Wii gaming experience, including the motion-sensing Wii Remote™ controller, Nunchuk™ controller and Wii Sports™ software, and furthers Nintendo's mission to expand the gaming universe by making video games accessible to more and more consumers. (...)

"Wii has reached more video game players than any game system before because it attracts everyone—both men and women, and people of all ages," said Cammie Dunaway, Nintendo of America's executive vice president of Sales & Marketing. "Our research shows there are 50 million Americans thinking about becoming gamers, and this more affordable price point and our vast array of new software mean many of them can now make the leap and find experiences that appeal to them, whatever their tastes or level of gaming experience."


Reuters (via Yahoo News) reports about the economic repercussions of the news, which coincided with Sony Computer Entertainment president Kaz Hirai's keynote speech at the Tokyo Game Show.


Following the announcements of the Wii price cut and Hirai's keynote speech, shares of Nintendo closed up 0.5 percent at 24,550 yen, while Sony gained 3.1 percent to 2,670 yen and the benchmark Nikkei average rose 1.7 percent.

News of Nintendo's price cut came just as Hirai was delivering his keynote speech.

EDIT Just to clarify the situation in Europe: Nintendo has not set a recommended retail price, but will reduce the wholesale price of the console. This will result in a price cut from €249 to €199, valid for the whole of Europe, except for the UK and Ireland. There, the price will remain but the bundle will be upgraded by the inclusion of ´Wii Sports Resort´ and a Motion Plus dongle.

Sources: Nintendo of America, Reuters (via Yahoo News)

29 comments:

Anonymous said...

2nd biggest mistake they've made this generation. they have crippled themselves. so much for the blue ocean strategy.

anyways, fine. i was wrong.

they fucked up, though. bad move, nintendo.

-"superfan" tactics.

pero_detlic said...

i think it's a good move and the logical one

wii with 2 games for 300 buck or ps3 with no games?

Anonymous said...

post not working

Grandmaster B said...

No. The BOS worked well. The priced it correctly and profited hugely from it.

Now the market has changed and they are making adjustments accordingly. Nothing wrong with that.

BidBuffet said...

Way to go Nintendo

M. Ferreira said...

Definitely not the wisest move by Nintendo - they only created an expectation of further cuts in the eyes of consumers.

The short-run's been fantastic - that, I'll admit. But long-run? More harm than good.

Anonymous said...

im not getting malstrom and others here its clear a sub 200 price globally is very important as is the magical 99.99 price point this is not AGAINST DISRUPTION this IS PRO DISRUPTION.........example its only wiis first price drop in almost 4 years it maintines its retail profitability not a loss like competition it also allows further cuts againe slowly tho in the future these price drops could take years to the low point of 99.99 dollars/euros/pounds add the yet to be seen new colours etc...

continued profits per unit and sales boosts shows nintendo far from fuked up no price drop nintendo continues lead with a price drop or rebundle nintendo dominates AT PROFIT vs lower sales AT LOSS that very fct provs DISTRUPTION IS STILL HAPPENING

Anonymous said...

wi number ne console seller of all time

ps3 flops at loss

ps3 slim plus price drop results in weak overall boost sony continues to loose

wii boosts is much bigge than ps3 with wii already in the lead and profit maintained

THATS CLEARLY DISTRUPTION ps3 slim and price drop attack is sony trying to gain market share

wii rebundles and price drops is a nother wave of bombes hitting perl harbour

its a form of continued disruption OPEN EYES SEE TRUTH LOL WIIBOY101

M. Ferreira said...

"the magical 99.99 price point this is not AGAINST DISRUPTION this IS PRO DISRUPTION."

Considering that 80% of all potential Wii owners are now asking "is there a new Wii coming now? is that why they dropped the price?" I'm going to say that is bunk.

Price cuts only occur in consumer goods when a new model is about to come out. Cutting your price puts an expectation of a new model or another price drop into the minds of the mainstream in the longer term, since we've been conditioned to think that price drop = "new one coming soon."

Because of that alone, the strategy is harmful when you're trying to capture a wider market than just the "good old boys' club."

Anonymous said...

shigsy clearly stated a 99.99 console was and is there plan

multi colorrd range of wii's at 99.99 and a wii+ in say off-white and off-black like dsi at 199.99 BOTH AT PROFIT= disruption of x360/natal and ps3/wands

Some German Guy said...

@M. Ferreira

80%? Where did you get this number from? It can't be common sense because then the number would be far less. I'd guess under 10%.

"Price cuts only occur in consumer goods when a new model is about to come out."
- Wrong. In this case Nintendo had to react. With your logic people would think there's a PS4 around the corner.

"Cutting your price puts an expectation of a new model or another price drop into the minds of the mainstream in the longer term, since we've been conditioned to think that price drop = "new one coming soon.""
- Really? I think you're mistaking the mainstream for the hardcore. You have to remember a lot of potential buyers who don't know much about the Wii won't even know about the price reduction. They'll just look at the 199$ price tag and think "cool!".

"Because of that alone, the strategy is harmful when you're trying to capture a wider market than just the "good old boys' club.""
- It would have been far more harmful for Nintendo if they would not have done anything. And what does the price reduction have to do with the "good old boys club"?

M. Ferreira said...

"80%? Where did you get this number from?"

My own experience - I currently work as an electronics retailer. I exaggerated a little, but it has to be close to 70% of my customers asking "Is a new Wii coming?" "Why did the price go down?" "Is it going to go down again?" That's just how the mainstream market works.

"Wrong. In this case Nintendo had to react. With your logic people would think there's a PS4 around the corner."

The PS3 isn't being targeted strictly as a mainstream consumer good. It's being sold to gamers, first and foremost. Gamers expect prices to drop through a system's life, as we've been conditioned that this is a normal occurrence. The general public perceives things much differently.

In the case of normal goods, however, DVD players, Blu-Ray players, TVs, and whatnot, prices only drop in select conditions. This is mostly when "last year's model" is on the way out (TV companies change their lines thrice a year - spring, summer, and fall for example... DVD players get a refresh every 6 months), or when an item just isn't selling.

"Really? I think you're mistaking the mainstream for the hardcore. You have to remember a lot of potential buyers who don't know much about the Wii won't even know about the price reduction. They'll just look at the 199$ price tag and think "cool!"."

You're giving the mainstream far too much credit... this is a fairly stupid group of people, in general. The ones that did buy the system early, by and large, tend to come to my department to yell at the guy who sold the unit to them at $250, since we were "ripping them off." A number of people will be swayed, but there's still a vast majority who look at the new price and say "It'll go down again soon - I know it!"

"It would have been far more harmful for Nintendo if they would not have done anything. And what does the price reduction have to do with the "good old boys club"?"

The "good old boys club" is the average console market. The hardcores - the shrinking, vocal minority. The same market Nintendo themselves said they weren't competing with. A price drop is more a move to placate this small subset, who have been screaming for price drops since 2007.

To say it would be harmful not to drop the price, I disagree. By lowering the price, they also lowered the perceived value of the product. At $250, they were still moving over 150,000 units per week... the PS3's only recently surpassed Wii sales, and it's quickly trailing off (my store went from selling one PS3 a month pre-cut, to ten PS3s out the door the day of the cut, to about1 PS3 last week). I expect to see the same effect with the Wii before too long. However, the sales drop can, and likely will be more abrupt.

pero_detlic said...

yeah, nintendo should have raised the price to 350! so the wii would look more valuable!

yea... right...

well, i guess wii is a phenomenon wor a while now, nor ps3 price cuts, nor wii's own won't change that

True Believer said...

I do not understand the people who claim that the price cut is a mistake. Blue ocean or no blue ocean the situation on the market has changed. The world is facing the largest recession in a century. So there are less potential customers for hitech companies like Nintendo. The wii was still selling well, but the slowdown in sales was something to worry about. Nintendo decided to expand the market by reducing the price of the wii. A welcome move, and a correct move if you consider that fabrication cost of the Wii must have come down considerably after the wii being on the market for more than 3 years. Personally I think it is a good thing that Nintendo tries to reach more mass market appeal. The price cut will also attract core gamers that want to have more than 1 console.
As for the speculation by the customer that the price cut could mean a new nintendo console in the future, I hope that Nintendo will launch a new console in 2011. I am really interested to see what Nintendo will do with the generation after the wii and ds.

Anonymous said...

jesus... at least m. ferreira knows what the fuck he's talking about.

and wiiboy: a price drop *IS* pro-disruption, but it's anti-blue ocean strategy. that's the problem.

perceived value, and the "wait for another drop" mentality are going to be bad for nintendo.

...and to think. if they would have just planned for a continual stream of forwardly-thinking software to release for this thing, instead of giving us NOTHING AT ALL this ENTIRE FUCKING YEAR, none of this would have happened. wii's problem was never its price: its the fact that there's almost NO compelling software that moves motion controls forward to the next level. what's nintendo's answer? a bunch of fucking sequels. thanks nintendo.

you fuckers better have something BIG up your sleeves. i sincerely hope that all this sequel bullshit is just you buying time before the next phase of your "real" plan launches. if sequels ARE your plan, then you guys have already blown it.

falafelkid: how about that vitality sensor?

-"superfan" tactics

Anonymous said...

off-topic...tegra soc for DS-HD my own gut feeling POSSABLE wii/ds/HD home/portable console based on custom tegra JUST MAYBE

tagskie said...

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Anonymous said...

so lets get this right in are heads the wiis at fault for the industrys bad judgment, lack of talent,subdesised via cash hand outs by sony,micrsoft thats now dried up 3rd partys didnt invest in wii developing they invested in ps3 CAN YOU INTELIGENT GUYS COUGH COUGH explain how thats a little white plastic box's fault AND NOT THE 3RD PARTYS.....i think some of you need to read malstroms teachings AH-HHMMMMMMM...wii also at fault for 9/11 according to the retardedcore gamers

M. Ferreira said...

Anonymous 10/19:

I have read Malstrom's work. Coincidentally, he's also said the price cut is the stupidest thing Nintendo could have done, at this point. ;)

See: http://seanmalstrom.wordpress.com/2009/09/24/wii-has-a-value-drop/

Or: http://seanmalstrom.wordpress.com/2009/09/14/wii-mistake-2/

I merely confirmed, from my own experiences, that people are seeing the Wii differently now. :)

There are a large number of reasons why you don't want to cut a console's price right away, and a large number of avenues that should be explored before hitting that level. Nintendo explored them with the N64 (colored systems, bundles) and the GCN (bundles), but went straight for the jugular on Wii. It was hasty, and fairly careless in a business sense.

Falafelkid said...

Hi M. Ferreira.

It was hasty, and fairly careless in a business sense.

See, that I don't agree with at all. How can it have been hasty if no other console in my mind has managed to keep its original price tag for three years? Every console needs a price cut eventually and the fact that Nintendo managed for so long without one should be lauded. I wouldn't be surprised if the Wii is the record holder of all time in this respect.

Anonymous said...

recently spoke with embedded core designer ARM Ltd. in regards to its new 2 GHz multicore Cortex-A9 mobile processor. The company revealed that it is currently developing dual-core, quad-core, and eight-core processor designs for the mobile, netbook and smartbook markets. ARM's VP of Marketing in the processor division, Eric Schorn, said that gamers should see netbooks capable of running the latest PC games sometime in the first half of 2010.



pc gaming power in tiny netbooks

same tech possible for SUPER-DS IN 2010/2011

NINTENDO GOING HYBRED CONSOLE maybe

M. Ferreira said...

Hello Falafelkid. Always a pleasure. :)

Anyway, as I was saying in my other posts, Nintendo pretty much messed up with their expanded audience. More than anything, these potential new customers are being confused, or turned off. I couldn't begin to express just how many people are asking when "the next year's model" will be coming out, or if the system is being discontinued. These people just aren't used to the whole "long-term drop" mechanisms we are.

They did have a nice three-year run, I'll admit. However, it would have been more beneficial to keep that $250 tag and offer more value somehow, be it by including another game, or a second controller. That way, the potential buyers wouldn't be asking about pricing or "next year's Wii", and they would still see a marginal increase from people in the fence.

As always, I'm not a business strategist... I just sell the stuff. ;)

Anonymous said...

yeah, well done nintendo. oh well, got my cheap nintendo wii already so who cares! :)

my wii said...

what should we chose wii vs xbox vs ps3

rif said...

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