Reading the title of this post many of you might be scratching your head. How could a price cut ever be a bad move? Nintendodpad has brought up an interesting point, and one worth looking a bit deeper into regarding potential negative effects of a price drop.
Here’s a quote from the author and sums up how he/she feels about the situation, “With the Toys R Us ad leaking yesterday, I can’t help but question why this may be the dumbest decision Nintendo has made all generation.”
So, you can see why this is a wonderful topic for debate. The author for Nintendodpad believes that the price drop is a mistake because it’s a sign of Nintendo not focusing on what brought people to the Nintendo Wii in the first place. Which is attributed to the software. Instead of worrying about Microsoft and Sony dropping their price, Nintendo should instead find ways to develop software that drives the consumer base to the hardware.
I don’t completely disagree with the author but I think they’re missing some key points here. First, this is nothing new in the landscape of competing for consumer’s money. The everyday consumer base are a fickle bunch, and it’s tricky to discern what leads them to make one purchase over another. A price drop is many times the key. Don’t believe me, then go ask Sony. It’s my hypothesis that Nintendo is dropping their price for psychological reasons. Sitting at $249.99 the Nintendo Wii seemed like such a bargain when the Xbox 360 and PS3 were selling for $399.99. Putting those two numbers side by side there’s no contest. However, when you see $299.99 along side the $249.99 the brain doesn’t separate the figures nearly as much. I should point out that I’m not a psychology expert, and this is all just speculation on my part.
Another small note to make about the article is the author states that the Nintendo DS isn’t receiving a price cut. The reason is that it already had one back in 2005.
Something I do agree with the author on is that Nintendo really needs to have it’s primary focus on bringing software that drives the consumer back to the console. Many times a price drop will coincide with a massive release(s), and as of now Nintendo’s big releases around that time are New Super Mario Bros. and Wii Fit Plus. Could something else be cooking up at the House of N though? How about a different bundle than the Wii Sports one which has been the same since the console’s launch? Drop the price to $199.99 and include Wii Sports Resort instead of Wii Sports and I’d say you almost have another launch type scenario on your hands.
In conclusion I’d like to tell the author that price drops are a fact of life. No matter how big a console gets, it’s popularity will always take a slide. While software will always be important, it isn’t ‘always’ a solution for selling hardware when sales are down. The Nintendo Wii has already sold around 50 million units, therefore mathematical reasoning dictates that less people will buy it as it ages. That’s not saying that the Nintendo Wii can’t still grow, but sometimes a price drop can be that catalyst it needs. Which looks to be ideally timed to strike right around the holiday season.