Just when is the Wii price cut coming?

Back in April I talked about the upcoming and inevitable Wii price cut. This is now looking a lot more likely, here’s why:

  • There has been nothing AAA launched on the Wii for a very long time. And their announced upcoming game launch schedule is looking very weak. They have done all the big first party IPs for this generation. This makes the Wii a less compelling purchase compared with other consoles which have had far more powerful game launch schedules over the last six months with more of the same to come over the holiday season.
  • Market price. You can now buy a far better console for a lot less money. Microsoft have gone to war here and their offering at the $199 price point is compelling. The Wii now looks like a very expensive Ford next to Microsoft’s cheaper Ferrari.
  • They are losing the monopoly on the casual family gaming customer. Microsoft and Sony have woken up to the huge change in the market.   Their response is, and will be, a range of game titles aimed directly at the Wii jugular.
  • Supply. Nintendo have learned the lessons of undersupply and have geared up to have enough volume to supply the market. And we all know about price elasticity of supply.
  • The economic downturn. This is going to get a whole lot worse before it gets better. People will still pay for their entertainment. They just have less money to do so.
  • The razor blade business model. Basically the more Wiis that are out there, the more Wii games that will be sold. And there is more money to be made selling games than there is selling consoles. So Nintendo have a strong incentive to get as many machines out there as possible regardless of price point.
  • Weak online offering. As Sony roll out Home and as the Microsoft Live service undergoes a major upgrade for the better, Nintendo are being left behind in this very important part of the gaming experience. This could force them to use the price mechanism in order to compete.

Nintendo have run the last six months with the Wii on sheer impetus. You have to wonder how long this will continue with the market changing so much. A price drop is inevitable. The only question now is whether or not Nintendo can get away with delaying it until next year.

And there are still a lot of Wiis to be sold. For a keen gamer Wii ownership is essential for those amazing, classic first party games. But as a second console to have alongside the 360.


  1. Looking back, I stand by my prediction of no official price drop until after Christmas.

    The economic downturn could be in the Wii’s favour too. The 360 may be cheaper than the Wii now, but the Wii still has a strong reputation for being cheap, and (on the highstreet at least) Wii games are far cheaper than their 360/PS3 equivalents.

    The 360 price drop was a funny one. I don’t think it really needed a price drop, it had just had a (very under marketed) hardware improvement (20gb – 60gb), and if pushed correctly the New Xbox Experience could have really helped them out in the run into Christmas. That said, at current pricing they are really putting Sony in a tight spot.

    The PS3 of all the three consoles needs a decent price cut. Retailers have been slashing prices all over the place, but an official price drop is what’s needed. Sony are going to loose a lot of sales to Microsoft if they keep the price of entry to the PS3 double that of the 360.

    My guess is still that Nintendo will probably keep the current Wii pricing into the new year, with maybe a bundle or additional colour scheme as and when sales start to drop, only then resorting to a price drop. Nintendo love to make profit on consoles, and that’s what they are going to do.

    I do seriously hope they announce a bunch of big games soon though. Their software output has been great for the most part, but certainly not numerate.

  2. I think Nintendo have already made an announcement saying don’t expect any of the big guns like Mario, Zelda or Metroid until 2010-11. There really isn’t anything coming out for it from Nintendo over the next six months to a year except for Animal Crossing, Wii Music and Wii Sports Resort. This isn’t really their fault and nothing new because their games have always taken a long while to develop.

    What’s killing the wii is that the third-parties are now making a hash of Wii games because they have just been converting PS2 games up (which they are running out of), making ‘mini’ versions of their regular games like that rubbish Dragon’s Quest, and converting 360/ps3 games down poorly.

    I have a feeling that a lot of the games coming out on Wii next year will actually be XBOX Live games turned into boxed versions (thanks to Wii’s poor internal memory). Maybe a couple of cheaply made lifestyle games, the odd game like De Blob or Madworld to make us remember we have a Wii gathering dust, will keep things ticking over but things look pretty poor.

    That said … Wii’s will still sell massively over xmas because the consumer just isn’t savvy enough to know all of the above. These are the people happy enough with just a couple of game, but still just play Wii Sports even then. Nintendo also need the extra mark up for each machine sold, because they’ll not be getting much from licencing games next year.

  3. They haven’t brought all the good stuff.

    Kid Icarus, StarFox and F-Zero? I wanna see those before more Mario or Zelda games.

  4. The original Xbox and the Gamecube cost less than the PS2 for the entirety of its life. The fact you can get part of an Xbox 360 (minus HDD, wifi and online play) for $199 is irrelevant. Get your head out of the sand Bruce.

    You’re right about the Wii’s lineup between now and the end of the year being weak though. Animal Crossing, Wii Music, and evergreen games like Mario Kart and Wii Fit should keep them ticking over, but some all-new, major AAA titles wouldn’t go amiss.

  5. So when you made your prediction, back in April, that the Wii would lower in price, was that a prediction that this drop would occur some time in the next infinity?

    I will make a prediction now too. As of October 2008, I predict that the price of the PS3 will come down at some point in the next one hundred years. No, I’m serious. You may mock my abilities now, but soon you will see what an astute market analyst I am, truly able to identify that gaming hardware lowers in price over extended periods of time. Then you will know who is truly king!

  6. I know, Bruce’s prescient powers are amazing, who would have thought sometime in the misty future that console prices will drop. If only he’d applied these powers to the US housing market and told everyone before it was too late!

    On topic: the X360 has no chance at the market the Wii has this gen, it has too much of a hardcore image. Its just not cool for non-gamers to have (even more so in the EU). PS3 has a better chance because of the PS2 legacy and more titles with a broader. Its position as a real home cinema unit doesn’t hurt either. The price is killing any real chance it has tho.

    When people stop buying Wii’s at the current price then Nintendo will make a cut, and lets face it, they can price it much cheaper than the X360 any time they like and still make a big profit on every one sold.

  7. Bruce, you are incredibly one-sided in all your articles. The Wii continues to prove you wrong time and time again, yet you insist on predicting the Wii’s untimely demise. I have news for you: the Wii has already won. Lemme respond to each of your points.

    “There has been nothing AAA launched on the Wii for a very long time.” – OK. I still cannot find a Wii at any of the local retailers, and I live in Idaho of all places. They are bought the instant they arrive.

    “Market price. You can now buy a far better console for a lot less money.” – You’re apparently not very good at math. This “better” console not only has been outsold despite having a year head start; it also comes with absolutely nothing at $199. That package comes with how many games? How many controllers? How much do these things cost compared to Wii equivalents? What about the lack of hard drive? Doesn’t sound like a bargain.

    “They are losing the monopoly on the casual family gaming customer.” – Really? I still have friends buying Wii consoles and hosting Wii parties. The local movie theater has Wii systems for rental. The grip sounds pretty strong in various places.

    “Supply.” – Yup. Wii is constantly sold out. Nintendo is so dumb for making a system so good that everyone wants it. Good for Sony/MS for keeping all stores overstocked with stuff that cannot sell.

    “The economic downturn.” – If anything, this means Wii already won since they scored a bajillion sales BEFORE this unfortunate turn of events. Good luck, Sony and Microsoft. I wouldn’t want to be playing catch-up during an economic low.

    “And there is more money to be made selling games than there is selling consoles.” – True… except Nintendo profits from its consoles. Nintendo doesn’t have to sell a million extras to break even. Combine that with the fact that Nintendo has already sold more Wiis than XBoxes and PS3s, and it sounds like they’re making plenty of money.

    “Weak online offering.” – Very very true… I do hope Nintendo catches up in this arena. It doesn’t seem to be hurting its rank, though. >_>

  8. Gameplay sells systems, not hardware. Let’s consider some examples of other electronics.

    Macs have better hardware than Dell and they always ship more units. Wait, no they don’t.

    Most brand-X MP3 players available now have ten times the features of an iPod, yet the iPod leads the MP3 player market by a landslide.

    The original GameBoy versus Sega’s Game Gear? The Game Gear certainly had superior hardware, but barely a fraction of the market share.

    Let’s not forget that Nintendo is a game company; games are their focus. They are GOOD at this.

    Sony and Microsoft, on the other hand, shove their grubby hands into every electronic they come across and the results are mixed. I would venture that neither of them really even knows what demographic they’re aiming at.

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