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Nintendo's past success has come from low-cost consoles. What will the company do now?
Satoru Iwata has a headache and it's a triple-Tylenol zinger. Wii U will almost certainly be priced as Nintendo's most expensive product launch ever. Although the price has not been announced, most commentators – including IGN – believe it will come in at a minimum of $299, possibly even more.
The last time Nintendo launched a games machine, it opted for a too-high price, and was forced into a $70 price cut just six months after launch. The 3DS debacle was an extremely painful episode in Nintendo's history, and it's still paying for it today. Here is a company for which getting this wrong sits uncomfortably. At the time of this humiliating climb-down, Iwata said, "I feel greatly accountable for having to make the markdown shortly after the launch, for having damaged our consumers' trust." He took a 50 percent pay-cut.
So, the prospect of doubling-down on such an 'unfortunate' (a favorite Nintendo word, used mostly to describe the shortcomings of rivals) lapse in judgment holds very little attraction for Nintendo's incredibly smart boss. Alas, he is between a Koopa Shell and a hard place, because if he sells Wii U at lower than cost, Nintendo will once again be faced with ruinous financial problems - and furious investors. Also, culturally, selling things for less-than-they-cost-to-make is not really a Nintendo thing. Pity the fellow who has to trot up to Mr. Yamauchi's abode of retirement, and explain that one.
A look at Nintendo's launch pricing. (Not adjusted for inflation.)
Wii U may well be worth $300 and lots more. The machine's essential unique selling point is the touch-screen controller which comes jammed with groovy technical gizmos, including accelerometer, gyroscope, camera and Near Field Communication (the thing that allows for augmented reality gaming). Try buying a six-inch touch-screen anything for $300 right now, and you'll wind up with some iffy iPad knock-off.
True, the Wii U controller is a single-touch device without any internal processors, but it's connected to a Nintendo console, with Nintendo games. Mario, Zelda, Donkey Kong et all in HD. I mean, come on. There are millions of people, loyal Nintendo fans, who very sensibly regard this company with awe and respect for its innovations and dedication to great game design. Those guys – hell, I'm one of them - would be lining up on Day One (let's assume November 18, shall we?) for the new machine, even if it was $500.
But this isn't enough to ease Mr. Iwata's throbbing migraine. Nintendo's most recent console Wii sold 100 million units. It was a success. The one before that, Gamecube, sold little more than 20 million units. It was a failure. Nintendo needs to attract tens of millions of people who are not particularly loyal to the company. No-one sensible is suggesting that all those one-time Wii Sports fans are in some way converts to the Nintendo brand. They bought a cool product at a good price. Period.
So the argument isn't about whether or not Wii U is worth $300+, but whether it can succeed at that price.
The arguments against a high price are partly historical. Nintendo's forte has always been at the mass-market end of the scale. Wii launched at $250 but it was a very particular and special product. Business innovation students will be studying Wii for decades. And although Wii U looks fascinating, it does not (currently) hold anything like the 'Oh My Freakin' Lord' appeal that Wii offered when it arrived. (I have been a games journalist for 25 years, and the E3 Wii presentation was, by far, the most remarkable event of my career, followed in distant second place by my first introduction to PlayStation, a decade earlier.)
So although Wii U is graphically much more powerful than Wii, and while its particular innovation is more expensive, it does not follow that this makes the machine more valuable in the eyes of the mass market. Nintendo products have always launched at $200 or less, with the exception of Wii and 3DS.
Even if priced at $300 Wii U will be on parity with Xbox 360 and PlayStation 3's current pricing, and those consoles are likely to drop in price sooner, rather than later. The arguments about whether the current generation of consoles is "better" than a Wii U are too exhausting to contemplate. Even so, although we do not know details of Wii U's tech specs, it seems unlikely that Wii U will offer a significant graphical improvement over current rivals, and it will come without a hard drive. The edge is going to be all about that controller.
But there are also good arguments for a higher price. We should expect that first party games will make full use of the controller in ways we can't yet imagine. Although Nintendo has shown some innovative potential uses for the screen, and we have seen some pretty cool guess work in Ubisoft's leaked video, it seems sensible to anticipate some Nintendo magic on display at E3. If an old Microsoft or Sony console is worth $300, then surely, so is a new Nintendo one.
Right now Nintendo is still selling an amazing 10 million units of Wii a year and has a proper success on its hands with 3DS. And yet the company is losing millions of dollars. It cannot afford to sell Wii U at a loss. It also cannot afford for Wii to be anything other than a huge success. Price is the single most important factor in that mind-crunching equation.
Little wonder that the company is holding back on announcing the price. It wants to dazzle us with its ingenuity before pulling back the curtain on what we'll have to pay. This is a standard Nintendo policy. Also, it's what you might expect from a skilled car dealer showing off a sleek Jaguar. Like it or not, Nintendo is now in the business of up-scale consumer products.
Satoru Iwata has a headache and it's a triple-Tylenol zinger. Wii U will almost certainly be priced as Nintendo's most expensive product launch ever. Although the price has not been announced, most commentators – including IGN – believe it will come in at a minimum of $299, possibly even more.
The last time Nintendo launched a games machine, it opted for a too-high price, and was forced into a $70 price cut just six months after launch. The 3DS debacle was an extremely painful episode in Nintendo's history, and it's still paying for it today. Here is a company for which getting this wrong sits uncomfortably. At the time of this humiliating climb-down, Iwata said, "I feel greatly accountable for having to make the markdown shortly after the launch, for having damaged our consumers' trust." He took a 50 percent pay-cut.
So, the prospect of doubling-down on such an 'unfortunate' (a favorite Nintendo word, used mostly to describe the shortcomings of rivals) lapse in judgment holds very little attraction for Nintendo's incredibly smart boss. Alas, he is between a Koopa Shell and a hard place, because if he sells Wii U at lower than cost, Nintendo will once again be faced with ruinous financial problems - and furious investors. Also, culturally, selling things for less-than-they-cost-to-make is not really a Nintendo thing. Pity the fellow who has to trot up to Mr. Yamauchi's abode of retirement, and explain that one.
A look at Nintendo's launch pricing. (Not adjusted for inflation.)
Wii U may well be worth $300 and lots more. The machine's essential unique selling point is the touch-screen controller which comes jammed with groovy technical gizmos, including accelerometer, gyroscope, camera and Near Field Communication (the thing that allows for augmented reality gaming). Try buying a six-inch touch-screen anything for $300 right now, and you'll wind up with some iffy iPad knock-off.
True, the Wii U controller is a single-touch device without any internal processors, but it's connected to a Nintendo console, with Nintendo games. Mario, Zelda, Donkey Kong et all in HD. I mean, come on. There are millions of people, loyal Nintendo fans, who very sensibly regard this company with awe and respect for its innovations and dedication to great game design. Those guys – hell, I'm one of them - would be lining up on Day One (let's assume November 18, shall we?) for the new machine, even if it was $500.
But this isn't enough to ease Mr. Iwata's throbbing migraine. Nintendo's most recent console Wii sold 100 million units. It was a success. The one before that, Gamecube, sold little more than 20 million units. It was a failure. Nintendo needs to attract tens of millions of people who are not particularly loyal to the company. No-one sensible is suggesting that all those one-time Wii Sports fans are in some way converts to the Nintendo brand. They bought a cool product at a good price. Period.
So the argument isn't about whether or not Wii U is worth $300+, but whether it can succeed at that price.
The arguments against a high price are partly historical. Nintendo's forte has always been at the mass-market end of the scale. Wii launched at $250 but it was a very particular and special product. Business innovation students will be studying Wii for decades. And although Wii U looks fascinating, it does not (currently) hold anything like the 'Oh My Freakin' Lord' appeal that Wii offered when it arrived. (I have been a games journalist for 25 years, and the E3 Wii presentation was, by far, the most remarkable event of my career, followed in distant second place by my first introduction to PlayStation, a decade earlier.)
So although Wii U is graphically much more powerful than Wii, and while its particular innovation is more expensive, it does not follow that this makes the machine more valuable in the eyes of the mass market. Nintendo products have always launched at $200 or less, with the exception of Wii and 3DS.
Even if priced at $300 Wii U will be on parity with Xbox 360 and PlayStation 3's current pricing, and those consoles are likely to drop in price sooner, rather than later. The arguments about whether the current generation of consoles is "better" than a Wii U are too exhausting to contemplate. Even so, although we do not know details of Wii U's tech specs, it seems unlikely that Wii U will offer a significant graphical improvement over current rivals, and it will come without a hard drive. The edge is going to be all about that controller.
But there are also good arguments for a higher price. We should expect that first party games will make full use of the controller in ways we can't yet imagine. Although Nintendo has shown some innovative potential uses for the screen, and we have seen some pretty cool guess work in Ubisoft's leaked video, it seems sensible to anticipate some Nintendo magic on display at E3. If an old Microsoft or Sony console is worth $300, then surely, so is a new Nintendo one.
Right now Nintendo is still selling an amazing 10 million units of Wii a year and has a proper success on its hands with 3DS. And yet the company is losing millions of dollars. It cannot afford to sell Wii U at a loss. It also cannot afford for Wii to be anything other than a huge success. Price is the single most important factor in that mind-crunching equation.
Little wonder that the company is holding back on announcing the price. It wants to dazzle us with its ingenuity before pulling back the curtain on what we'll have to pay. This is a standard Nintendo policy. Also, it's what you might expect from a skilled car dealer showing off a sleek Jaguar. Like it or not, Nintendo is now in the business of up-scale consumer products.
. it was before we had the euro. It doubt it was 499 dollar, so that means u paid 770 gulden for it. I could be possible, but it would be really alot for that time.
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