Nintendo Rules Out Wii U Price Cut

[Marshall Honorof]

Nintendo Rules Out Wii U Price Cut

Nintendo plans to remedy flagging console sales without lowering the Wii U's price.

The Wii U got off to a strong start, but following its launch and holiday sales, things have slowed down a bit [http://www.escapistmagazine.com/news/view/121778-Wii-U-Sales-Forecast-Cut] for Nintendo's newest console. Satoru Iwata, the president of Nintendo, has expressed concern over these numbers, but already has plans in place to see if the Big N can bring some momentum back to the Wii U market. If you've been waiting for a price drop, though, you'll have to keep waiting: Iwata is categorically opposed to that plan at this time.

"With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown," Iwata explains, reminding investors (and consumers) that Nintendo is already selling each Wii U console at a loss. "I would like to make this point absolutely clear." The problem, according to Iwata, is one of consumer perception, not of price. He believes that Nintendo did not do a sufficient job of communicating the Wii U's features and potential to the general public. Once the next wave of Wii U software emerges, however, Iwata states that the company will have another, better opportunity to demonstrate the system's value and unique properties.

Iwata has a few thoughts on why the Wii U's sales are slow compared to that of its predecessor. "Since we were unable to incite enough excitement in society, we have failed to maintain its momentum, after the turn of the year," he says. In particular, delays in highly anticipated software titles have slowed consumer interest and made the Wii U more reliant on the ebb and flow of consumer interest. "This has further upset our scenario for market penetration, for which momentum is the key."

One thing is clear: Iwata has no interest in resting on the Wii's laurels in an effort to sell its successor. "People always try to compare the sales of Wii U with that of Wii, but the current situation is requiring us to focus upon how to reenergize Wii U sales irrespective of any comparisons with the previous platforms," he states. Given that Nintendo recently announced some titles [http://www.escapistmagazine.com/news/view/121662-The-Legend-of-Zelda-The-Wind-Waker-Remake-Headed-to-Wii-U], Iwata's chance at resurgence may be on the horizon after all.

Source: Nintendo [http://www.nintendo.co.jp/ir/en/library/events/130131/index.html]

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[subtlefuge]

I'm just waiting to see if Nintendo pushes enough first party titles out, to get a big enough install base, to attract long-term third party development. For a while, dozens of developers and publishers were signing on to bring their games or exclusives to the console, but many have slowly backed away or postponed their Wii U titles.

I mean the Yoshi game and Wind Waker remake are good, but you're going to need 2 out of 4 on Mario, Mario Kart, Zelda, and Super Smash Brothers to attract the average Nintendo Fan's attention. Also, it might not hurt to buy an exclusive. Sure, exclusives suck for the consumer, but if we're stuck in the Console Wars, it at least gives the consoles some unique flavor.

 

[AzrealMaximillion]

Well they're already selling at a loss and just released a report saying they lowered Wii U sales projections. Them selling at a bigger loss wouldn't help. But the Deluxe edition of the Wii U is too expensive for the memory you get. I think that should've been the standard version.

 

[Scribblesense]

I was expecting a price cut on the Basic Set, at least. The loss on every system is pretty minimal, made profitable by one additional game sale, so a larger loss wouldn't be devastating if they can get a higher tie ratio or lower manufacturing costs.

Raising consumer awareness is going to be tough, especially since they don't have any of their really big games coming until March or later. It's going to be a rocky couple of months for the Wii U, but their first-party games are always system sellers. Hopefully they move enough units to convince third-party that developing for the Wii U isn't wasted effort.

 

[Something Amyss]

Well they're already selling at a loss and just released a report saying they lowered Wii U sales projections. Them selling at a bigger loss wouldn't help. But the Deluxe edition of the Wii U is too expensive for the memory you get. I think that should've been the standard version.

Selling a higher volume of consoles at a higher loss could be more important, if there's an actual software attach rate.

Of course, with nothing new out, that would still be a problem, but the general idea is not a bad one inherently. Gaming has long been a loss leader market, EXCEPT Nintendo.

You really do want a large install base to sell your games, and since Nintendo's active first party franchises are huge, that's a good thing. Of course, the lack of post-launch titles is just stupid.

 

[Zombie_Moogle]

Nintendo is sitting on a lot of great IP's that they haven't touched in a while

Pikmin 3, Earthbound/Mother; these are titles that could really excite the hardcore market

 

[Epona]

I seen a thread on another forum that suggest Iwata may resign if things don't improve over the next year. The actual article is in Japanese so I won't link to it but sooner or later the gaming media will translate it.

I would like to point out that I have already been verbally beaten down because I said the WiiU is having a poor launch. I say again, the WiiU is having a poor launch.

 

[Epona]

Well they're already selling at a loss and just released a report saying they lowered Wii U sales projections. Them selling at a bigger loss wouldn't help. But the Deluxe edition of the Wii U is too expensive for the memory you get. I think that should've been the standard version.

It isn't that expensive. Pay $50.00 more for charging docks, Nintendo Land, and various other little accessories that would normally all sell for an extra $125.00-ish more. Not only that, but you also get three times the space on the Harddrive for your games. Also remember how cheap Flash Drives are nowadays, I can pick up a 64 GB flash drive for around $40.00 from my college store, which seems to be the norm nowadays, moving everything over to cheap flashdrives for space, which I honestly don't mind as it allows me to keep all my save data/game data in easily organized flash drives (Three of them currently, one for A to H, I to P, and Q to Z. Keeps all my games nicely organized and easy to find. At least for saves/small downloadable games like Thief or such.

OT: The Wii U will sell very well once the games start releasing, this happened with the 3DS, they didn't even need to lower the price of the handheld to compete if they just had a stronger launch line-up.

Speaking for myself, I would never have paid $250 for the 3DS.

 

[Covarr]

They seem genuinely surprised that after Christmas, sales weren't as strong. They are aware that holiday rushes are not a good indication of the rest of the year, right? It's completely normal for sales to die down afterwards, and if they expected otherwise then they were damn fools.

P.S. Thanks

 

[New Frontiersman]

That's sad, but it's good to know not to wait for a price drop before I get one.

 

[AzrealMaximillion]

Well they're already selling at a loss and just released a report saying they lowered Wii U sales projections. Them selling at a bigger loss wouldn't help. But the Deluxe edition of the Wii U is too expensive for the memory you get. I think that should've been the standard version.

It isn't that expensive. Pay $50.00 more for charging docks, Nintendo Land, and various other little accessories that would normally all sell for an extra $125.00-ish more. Not only that, but you also get three times the space on the Harddrive for your games. Also remember how cheap Flash Drives are nowadays, I can pick up a 64 GB flash drive for around $40.00 from my college store, which seems to be the norm nowadays, moving everything over to cheap flashdrives for space, which I honestly don't mind as it allows me to keep all my save data/game data in easily organized flash drives (Three of them currently, one for A to H, I to P, and Q to Z. Keeps all my games nicely organized and easy to find. At least for saves/small downloadable games like Thief or such.

Your shouldn't have to argue for a console based on what accessories you're buying for it. The console should come out of the box without the need to buy extra things to make it satisfactory. The fact is, it doesn't matter how cheap flash drives are these days. The possible purchase of them shouldn't factor into the quality of the console I buy. That seems see to have to consider.

OT: The Wii U will sell very well once the games start releasing, this happened with the 3DS, they didn't even need to lower the price of the handheld to compete if they just had a stronger launch line-up.

I disagree. The 3DS was selling much below expectation due to its $250 price tag. Nintendo slashed the price of the 3DS to $170 and offered those who bought the 3DS at the original price 10 NES as well as 10 GBA games as compensation. This isn't really the case with the Wii U. See, the Wii U's standard price is fair. But that's also along with the fact that there's only a few launch games that are reputable. All of these announced games coming up, really need to come sooner than later at this point.

 

[AzrealMaximillion]

Well they're already selling at a loss and just released a report saying they lowered Wii U sales projections. Them selling at a bigger loss wouldn't help. But the Deluxe edition of the Wii U is too expensive for the memory you get. I think that should've been the standard version.

Selling a higher volume of consoles at a higher loss could be more important, if there's an actual software attach rate.

Of course, with nothing new out, that would still be a problem, but the general idea is not a bad one inherently. Gaming has long been a loss leader market, EXCEPT Nintendo.

You really do want a large install base to sell your games, and since Nintendo's active first party franchises are huge, that's a good thing. Of course, the lack of post-launch titles is just stupid.

You make a good point, and I also agree that the lack of post launch titles is what's hurting the Wii U's sales. Don't get me wrong, 4 million units is still good, but that's less than they thought so something's up.

 

[AzrealMaximillion]

As for the Wii U Deluxe, I was just saying that the price point, with the things you are getting for it, is a fair price. Mind you, it is just from my perspective and for the pricing, I was happy with what I got.

Also, I disagree with your assessment of the 3DS pricing. The reason it wasn't selling was not because of its price-point. It was because of the lack of games available for it. Look at the list of Launch Titles:

Madden Football
Pilotwings Resort
Super Street Fighter IV
Pro Evolution Soccer 2011 3D
Super Monkey Ball 3D
Nintendogs + Cats
Rayman 3D
Steel Diver
The Sims 3
Ridge Racer 3D
Asphalt 3D
Ghost Recon: Shadow Wars
Bust-a-Move Universe

None of those games are really going to sell a console at all. The first true "must-have" game for the 3DS was the OOT remake, which didn't release until about three months after the console was released. That is a long time without any must-have games. Shortly after that the games were releasing steadily allowing for a reason to have actually purchased the handheld in the first-place. If they were to release with games such as "Devil Survivor: Over-Clocked, OOT 3D, Starfox 64 3D, and Super Mario 3D Land", then it would have sold just well without the low price-point.

I still maintain that it was the price point that really hurt the 3DS sales. Look at the Original DS Launch List
Asphalt Urban GT (Gameloft)
Feel the Magic: XY/XX (Sega)
Madden NFL 2005 (Electronic Arts)
Ping Pals (THQ)
Ridge Racer DS (Namco)
Spider-Man 2 (Activision)
Sprung (Ubisoft)
Metroid Prime Hunters: First Hunt (Nintendo)
Super Mario 64 DS (Nintendo)
The Urbz: Sims in the City (Electronic Arts)
Tiger Woods PGA Tour (Electronic Arts)

Same kind of games that wouldn't really be looked upon as ones that sell consoles. Even the Mario remake and a new Metroid game struggled to sell well. But the DS sold much better in its first 2 years alone than the 3DS. The 3DS already has its XL version there to boost sales too, but the DS in 2 years sold a lot better for $100 less. See, the 3DS had no business charging people $250. For $250 you can get a PS3 bundle with games. Or a Wii, and all the good games worth playing on that. Or a 360 and a decent few games. $250 is not what you charge people for something and not have something worth backing that up with. Having a glassesless 3D effect that is barely used, a camera, internet access and Graphics that rival the late PSP games don't make it as worthy as charging as much as the consoles. The PSVita is going through that problem currently with its high price.

My point is that without that price drop, and without the compensation of said price drop, the 3DS would not be selling as well as it is today. That's not disputable. There were articles about that things poor sales all over this site and others and the main complaint on the forums was "$250 is too much". Not saying that the lack of launch titles didn't hurt, but look at how the original DS sold millions more by 2 years time in its wake, all the while with the same launch game problem. It's quite clear that price was the issue. It's unheard of in the non-PC gaming world to hear of a hardware price drop six months after launch. That hadn't been seen since the Sega Dreamcast days if I'm not correct.

 

[Colt47]

Spoiler

As for the Wii U Deluxe, I was just saying that the price point, with the things you are getting for it, is a fair price. Mind you, it is just from my perspective and for the pricing, I was happy with what I got.

Also, I disagree with your assessment of the 3DS pricing. The reason it wasn't selling was not because of its price-point. It was because of the lack of games available for it. Look at the list of Launch Titles:

Madden Football
Pilotwings Resort
Super Street Fighter IV
Pro Evolution Soccer 2011 3D
Super Monkey Ball 3D
Nintendogs + Cats
Rayman 3D
Steel Diver
The Sims 3
Ridge Racer 3D
Asphalt 3D
Ghost Recon: Shadow Wars
Bust-a-Move Universe

None of those games are really going to sell a console at all. The first true "must-have" game for the 3DS was the OOT remake, which didn't release until about three months after the console was released. That is a long time without any must-have games. Shortly after that the games were releasing steadily allowing for a reason to have actually purchased the handheld in the first-place. If they were to release with games such as "Devil Survivor: Over-Clocked, OOT 3D, Starfox 64 3D, and Super Mario 3D Land", then it would have sold just well without the low price-point.

I still maintain that it was the price point that really hurt the 3DS sales. Look at the Original DS Launch List
Asphalt Urban GT (Gameloft)
Feel the Magic: XY/XX (Sega)
Madden NFL 2005 (Electronic Arts)
Ping Pals (THQ)
Ridge Racer DS (Namco)
Spider-Man 2 (Activision)
Sprung (Ubisoft)
Metroid Prime Hunters: First Hunt (Nintendo)
Super Mario 64 DS (Nintendo)
The Urbz: Sims in the City (Electronic Arts)
Tiger Woods PGA Tour (Electronic Arts)

Same kind of games that wouldn't really be looked upon as ones that sell consoles. Even the Mario remake and a new Metroid game struggled to sell well. But the DS sold much better in its first 2 years alone than the 3DS. The 3DS already has its XL version there to boost sales too, but the DS in 2 years sold a lot better for $100 less. See, the 3DS had no business charging people $250. For $250 you can get a PS3 bundle with games. Or a Wii, and all the good games worth playing on that. Or a 360 and a decent few games. $250 is not what you charge people for something and not have something worth backing that up with. Having a glassesless 3D effect that is barely used, a camera, internet access and Graphics that rival the late PSP games don't make it as worthy as charging as much as the consoles. The PSVita is going through that problem currently with its high price.

My point is that without that price drop, and without the compensation of said price drop, the 3DS would not be selling as well as it is today. That's not disputable. There were articles about that things poor sales all over this site and others and the main complaint on the forums was "$250 is too much". Not saying that the lack of launch titles didn't hurt, but look at how the original DS sold millions more by 2 years time in its wake, all the while with the same launch game problem. It's quite clear that price was the issue. It's unheard of in the non-PC gaming world to hear of a hardware price drop six months after launch. That hadn't been seen since the Sega Dreamcast days if I'm not correct.

I tend to agree with this for similar reasons. The fact is that mobile gaming is being eaten up in the US by the iPhone and iPad, while the deeper and more interesting games are usually found on the consoles. This is actually a pretty good model since most of us would likely better enjoy adventure games, shooters, and RPGs on a bigger screen via home console than on a portable with tiny screens and ergonomics issues. Also the PC market has been taking a toll on the console game sales through competitive pricing.

On the upside for nintendo, at least the younger generations seem to like the 3ds if my Nieces are any indication.

 

[Something Amyss]

Don't get me wrong, 4 million units is still good, but that's less than they thought so something's up.

I think it's mostly the fact that Nintendo's coasted on the name and potential for so long. They've been all "look at the totally cool stuff we'll have eventually," and people have been like "okay, take my money. I'll wait."

That, of course, only works so long, and they're hoping to follow up on the success of the Wii basically on that alone.

 

[Evil Smurf]

I'll buy it when a new Zelda game comes out.

 

[Strazdas]

I would like to point out that I have already been verbally beaten down because I said the WiiU is having a poor launch. I say again, the WiiU is having a poor launch.

WiiU is having a poor everything and likely wont sustain itself, hopefully setting nintendos ultraconservative model that its been using for over 100 years to finally fail.