GameStop Expects Wii, PS3 Price Cuts This Year

[Keane Ng]

GameStop Expects Wii, PS3 Price Cuts This Year

GameStop CEO Dan DeMatteo no longer simply wants price drops this year for the Wii and PS3, he expects them to happen, or else Sony and Nintendo aren't going to be hitting their forecasted sales numbers this year.

Dan DeMatteo has been mentioning PS3 and Wii price drops for some time now, but the tone of his predictions changed dramatically during a recent conference call to investors. Now instead of seeing price cuts as something he wants [http://www.escapistmagazine.com/forums/read/7.107592] to happen, he sees them as something that he expects to happen, and, moreover, that needs to happen.

His company, it seems, is so sure of price cuts happening that they're factoring them into their own financial outlook for the year. DeMatteo forecast 33.5 million hardware unit sales for 2009, and "that assumes that there will be price cuts on the PS3 and potentially one on the Wii...there are some price cuts built into that assumption, but not until the third quarter."

DeMatteo explained that the state of the world economy will force Sony and Nintendo to drop their prices. "The hardware price points, given this economic environment are potentially too high, and if the platform holders are going to make the numbers that they forecasted for the year, those prices would have to change," he said.

He also pointed out that prices have stayed up longer in this cycle than any other generation before, and that in a bad economy, that doesn't seem to make much sense.

"Put all those things together, I think that there will have to be price cuts in order to get the hardware moving to where it needs to be," DeMatteo concluded.

It's his butt on the line too, after all.

[Via GI.biz [http://www.gamesindustry.biz/articles/gamestop-expecting-ps3-wii-price-cuts-in-q3]]


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[Pandalisk]

Why doesn't he just drop the price?

Because he is the incarnation of scrooge McDuck?

 

[Pendragon9]

Yes. a Price drop would be wise. Though I was sure the Wii was already cheap.

 

[rated pg]

I know if I try to sell a 360/PS3 below MSRP, the store gets a nice call from Microsoft/Sony so they probably have a similar arrangement (also remember the British company that went under and Microsoft forbid them from clearing out their 360s?). So I think the console manufacturers have to get the ball rolling themselves.

And @ Pendragon, the Wii isn't cheap considering what it's capable of (not just graphically, I mean the fact it can't play DVDs too, and has very limited internal storage) and I believe has gone up in price but down in cost since launch. Nintendo could drop the price, but won't because it doesn't have to.

 

[Tony Grande]

I guess it's so quiet here cause everyone who claimed they would get a Playstation 3 when a pricedrop would occur is posting outside their local shop!

 

[jboking]

I could understand a ps3 price drop. I don't see what Nintendo's incentive is for a price drop though. Aren't they making good money as it is?

 

[KDR_11k]

I doubt there'll be a Wii price drop, you've heard Iwata's comments on the matter: Pricedrops only give temporary increases in sales and are usually not worth it, he doesn't see a reason to drop the price even with the economy the way it is because it's more effective to make the system worth more than sell it for less (and really, the Wii has been suffering a serious drought lately so software releases have a lot of boost potential on it). Sony seems to be taking the same route but without much success. Not going to be easy to make the PS3 look that much more appealing than the other two consoles to make up for the price difference (and no, a feature list doesn't matter, it's the value to the customer that matters) especially since games tend to be cross platform on the HD systems.

Why doesn't he just drop the price?

You mean like Sega wanted with the Saturn against the PS1, expecting stores to take the loss on the console instead of the console maker? The store doesn't really give a crap about the console sales, they're not getting much money from it anyway.

 

[NeedAUserName]

Why doesn't he just drop the price?

Because if his margin of profit drops too low he won't make enough money selling PS3s. I can haz business knowledge.

 

[Onyx Oblivion]

Well, I was going to try and save up over the summer for a PS3 anyways. REALLY want to play Disgaea 3 and get back into the R&C series, with a few other titles I'm looking for, too. A price drop would be nice, but the Wii could be 150 USD and I still wouldn't buy it. It just has too few games that I actually want to play. A price drop on the PS3 would be VERY nice.

 

[rated pg]

Let me ask you this one question. Do you expect a video game console to be a multimedia device? You have to look at where Nintendo comes from compared to Sony and Microsoft. Now Nintendo has always been a TOY company, starting with card decks and now known for video game consoles. In contrast Sony and Microsoft have always been Software and Hardware developers, and it is expected that they use their strength in this department to make their consoles have the ability to play music since the Original Playstation and having a built in hard drive with the Xbox.

Nintendo has never created a console that has been most than a video game console. The one exception is when they are working with other hardware companies like the Panasonic Gamecube which was pretty much a dvd player attached to a gamecube(looked pretty unique though).

So no I don't think the wii is expensive and it makes sense that the wii is all about video games and not trying to be anything different. Besides we see the other extreme with the PS3 and being a blu-ray player, it is doing well enough now but let's face it really lost its potential when other blu-ray players dropped in price while the PS3 has only lost features but not its price.

Dude, Nintendo has enough laughably bad fanboys without you needing to leap all over my comment just because I said Nintendo could sell the Wii lower than they are and still make a profit. You can go on about how it's not in their modus operandi, or their customers don't care about that, but the reason the Wii doesn't play DVDs is the same reason the Gamecube didn't; they didn't want to pay licensing. And I mean they're looking at getting Netflix now so it's hard to make the "not a multimedia device" excuse.

And yes it's still expensive. You did nothing to disprove this. $280 plus $70 controllers? Just because Nintendo thinks it doesn't need the ability to play DVDs, etc, doesn't justify paying almost as much as you would for a 360 Pro; quite the opposite, in fact.

 

[Plinglebob]

While I wouldn't be surprised if there was a price drop in the PS3 soon, probably to coincide with a big release like God of War, I doubt they will ever drop the price of the Wii. The only reason to is if no-one is buying something because the price is too high. While this may be the case for the PS3, it certainly isn't for the Wii.

 

[Agent-Sliper]

Rather than droping the price of the Wii,
I reckon Nintendo they should fix the damm motion sensing.

 

[The Shade]

Ooh, a price drop on the PS3?

Now all I need is a TV that actually makes it worthwhile and I might actually get one!

Might.

 

[rated pg]

First off about controllers and I think we can all agree that regardless of console controllers have gotten too expensive. I remember the average being 30 bucks for an extra controller, today the average is 50-60 dollars USD. That is a pretty penny no matter if you are getting a PS3 controller, 360 controller or wii remote/Nunchuck combo.

I'm sorry you want more in a video game console but that has been a problem in the cell phone market. It is nice that electronics can do more but that does not mean they should. Cell phones for example have been pushed to their limit in terms of technology but their reliability for what it is a phone has gone down. America letting 3g into their network means cell phone providors have to rennovate every cell phone tower just so consumers have to get reliable cell phone service again with dual band 3g phones compared to quad band edge phones.

If you want something more in your video game consoles the option is there now but don't be shocked when one day that there isn't going to be a video game console that does not focus on what it was meant to do because the console is full of other features that other consumers want to use due to sheer laziness.

Also, I'm no fanboy. I'm an aware consumer(Member of the ECA) that supports increasing consumer knowledge using concrete examples to relate to the opinions I make that would logically make sense. You can call Nintendo cheap for not paying licensing to play DVDs or even music CDs but I want a device which is advertised as to fulfill its primary function the best and in this case, play video games. No console is better than the other, each has their own features that will increase or decrease the desire for a consumer to get.

For example, paying for online despite me owning an Xbox360 was a huge blow for me which I still don't like and I cannot afford buying a big screen TV to play at the HDMI resolution most video games are being developed for the 360. I lack the finances to upgrade my television. Now for you it might be no problem but there are plenty of consumers like myself who are adults with an B.A. but still make less than 20k a year while looking for employment that would support a life that would enable a consumer like myself to buy a big screen television, much more important getting a house or renting an apartment.

With the expansion of consumers in the video game industry consumer knowledge is at an all time low where expectations are unknown and what a consumer should be paying to get the best quality is still widely hard to inform. Also put into context the "hot" button topics of the video game industry such as blood in video games which has existed since the third generation of video game consoles.

Multi function devices are the way of the future, and while they occasionally have drawbacks, I don't see how that would factor in on a video game console especially on more of a convenience feature. Sure a fax machine built into a printer may not be as good as a stand alone fax machine, but does it still send and receive faxes? The only problem I could see with a built in DVD player is not including a remote, but controllers do function as remotes (and Microsoft/Sony sell DVD remotes). I can't see it affecting software quality unless they had first party developers working on something that is more hardware side, and even then most AAA titles come from 3rd party developers anyways.

Just because Nintendo doesn't want to brand the Wii a video game console does not make it something else, just like me calling my car a '67 Shelby Mustang doesn't magically convert it from a shitbox to something else. The 360 and PS3 also play video games and provide much better value to their consumers at a comparable price point (well at least the 360) and Microsoft/Sony aren't extorting ridiculous amounts from consumers for their product, especially if they will both soon have similar motion technology. And having a Wii that also plays DVDs would not affect game quality, especially when there are people out there modding their Wiis to play DVDs with no adverse effects (end users, not developers). Alright, so not everyone wants to play DVDs with it but if Nintendo is going to sit there, not dropping the Wii's price point and pumping out a last gen box with little in common with its current generation competition...how do they think that is justified? They're reaping in mass profits off the uninformed with a second rate console. I'm sure it's the end goal of all corporations, but it would probably inspire less contempt and disgust from the gaming community for their shady and deceptive marketing strategy.

So you're ok with buying an out of date console for $280, but $5 a month is too rich for your blood? I understand the TV thing, I work part time and I'm a college student, but really? And when 1v100 gets out of beta, you can earn MS points just for playing...or in other words, make back what you spend in subscriptions (in free downloads mind you, but better than nothing). You also get access to demos pre-release (usually), saving you $60-70 a game in the long run on terrible games.

I understand where you're coming from, but its when you read articles like this
http://news.vgchartz.com/news.php?id=3354 (wanted to link to the Kotaku article but couldn't find it)
that you realize Nintendo is NOT concerned about best value for customers, only the bottom line, which is why the quality of the system as a games platform and any extras are entirely irrelevant to them.

 

[Silva]

... I didn't realise until now that there is a huge difference in Wii prices over in America than here.

We get them cheaper. Waaaay cheaper.

Awesome.