Et tu, Nintendo?

Et tu, Nintendo??!?

It’s a gray, wet day in Boston, and that mirrors my mood well enough. Within hours of my last published post (extolling, of all things, the virtues of lower-priced gaming options), and about one year after I first began celebrating the Wii, Nintendo announced that the Wii will cost $250. A second Wiimote and nunchuck will sell for $60 ($40 + $20, respectively.)

Is $250 cheaper than a core Xbox and much cheaper than a core PS3? Absolutely. Is it a disappointment for consumers (like me) who allowed themselves to be seduced by rumors of a $200 (or lower) price point?

Absolutely.

I don’t believe that I’m exaggerating. A large percentage of the user comments in Joystiq (and other forums) read like this:

  • “Not as cheap as I was hoping it would be, which means I won’t be getting it this year.”
  • “$250 is steep for that console, I’m sorry. For $50 more you could get a barebones 360 and that’s ridiculous.”
  • “$60.00 for a complete controller does kinda hit me in the gut.”

The sad thing is, I’m not sure that consumers would be having this reaction if Nintendo had simply done a better job of managing rumors. It didn’t need to announce the price earlier; it could have simply stated, loudly, repeatedly, and without an ounce of ambiguity, that rumors of a sub-$200 launch price were completely incorrect. $250 could theoretically have sounded like a good deal, once upon a time.

Xbox-hating cynics among you: hold your tongues. I’m a huge fan of Nintendo’s (as any regular reader of this blog knows) and I truly want the Wii to succeed. I think that the entire game industry could benefit from a triumphant Wii, both in terms of how it might broaden the market, and in terms of how it might justify more innovation. And I’ll still be buying a Wii at launch, even at $250. The question is: how many others will?

Perhaps Nintendo is planning to cut the price soon after launch. Could work out great. But we’re playing for positive network externalities here, and we’re playing on a court that’s years long. Is it really worth squeezing the customer for every dollar, just to make a few extra bucks in the short term?

14 responses to “Et tu, Nintendo?

  1. It’s region-free, isn’t it? The initial US price may be to dissuade Japanese buyers, Nintendo’s strongest fanbase, from importing the North American console before the Japanese launch in Dec 2. Nintendo can’t afford to have the perception of a poor Japanese launch. Wii will be out of stock in Japan before Christmas, so the reverse is not going to be much of an issue.

    It’s hard to imagine the Wii being sold for less than the Japanese launch price of the Gamecube (also 25000 yen, I believe), and the US dollar was stronger against the Yen in November 2001. Also, I’m not sure if the extra $50 is really “a few extra bucks in the short term.” There’s still a horrendous amount of expensive engineering in that machine, and they have to recoup it somehow.

  2. Well… maybe the Wii won’t be out of stock in Japan, but importers are still going to have a hard time getting their hands on truckloads of Japanese Wiis.

  3. At this point, it will be important for the consumer to really figure out what they’re getting for the money. It’s easy for Nintendo to now charge $250 for the Wii because ever since Sony announced it’s $500/$600 price tag for the PS3, Sony has been criticized and Nintendo has been praised for it’s innovative controller and user friendly features. People were so stunned by Sony’s announcement that everyone had pretty much parked themselves in the Wii camp. With that kind of confidence, $250 was easy…in my opinion anyway. :)

    So what do you get for your money these days? Let’s start with the Wii:

    $250.00 will get you:

    + Fantastic 1st Party games. This has always been Nintendo’s strength.
    + A whole bunch of fun features such as access to the old Nintendo game library online.
    + Innovative controller.
    – Third party games don’t look to be nearly as good as the few number of superb 1st party games for now.
    – No DVD playback ability of any kind.

    For the $300.00 Xbox 360, you get:
    + Great looking games.
    + Basic Xbox Live for free.
    – $50 a year for the premium Xbox Live service.
    – Last gen DVD player which limits the life span of this product. (So will they launch an Xbox 360 HD-DVD unit in 3 years? Will a full blown Xbox 720 be out in 5 years?)
    – $175 or so to upgrade with an external HD-DVD player that will not be used for games.
    – No wireless controllers for this version of Xbox 360.
    – No HDD

    For the $500.00 PS3, you get:
    + Great looking games.
    + Online service is completely free (as of now. hahaha)
    + Comes with wireless controller.
    + Controller shows innovation with that tilt sensor feature.
    + Comes with 20gb HDD.
    + Has a Blu-Ray drive which helps ensure the life span of this product for at least 8 years. (I think TDK just created a prototype 200gb Blu-Ray disc. I have no idea what you would do with that, but once someone does, it should look amazing.)
    – Has a Blu-Ray drive which contributes a fair bit to the price tag of this console.

    So from this rudementary overview, Nintendo Wii is great if your just looking for pure simple fun.

    If you don’t want a next gen dvd player, don’t care about all the bells and whistles, but want next gen looking games, then the 360 is the way to go. (Note: to upgrade the equipment of the $300 Xbox 360 to a comparable level with the $500 PS3, you’ll have to spend about $375 extra for the 20gb HDD, wireless adapter/controller, premium online service, external HD-DVD drive, bringing your total to $675.00)

    If you are building that home entertainment theater, know you want a next gen dvd player, and love having all of the bells and whistles right out of the box, then the PS3 is probably the easiest solution.

    I like the Wii because it’s simple and I know what I’m getting. If you have the money and assuming that they execute on the online side, I like the PS3 because I also know what I’m getting. Xbox 360 is great for plain next gen looking games (great graphics and online service, but nothing innovative about the controller), but I can’t help but get that “nickel and dime” feeling from MS.

    Sorry for the long opinion. :)

  4. It’s hard to imagine the Wii being sold for less than the Japanese launch price of the Gamecube (also 25000 yen, I believe), and the US dollar was stronger against the Yen in November 2001. Also, I’m not sure if the extra $50 is really “a few extra bucks in the short term.” There’s still a horrendous amount of expensive engineering in that machine, and they have to recoup it somehow.

    Fair points. However, I’m not arguing that $250 is high in a vacuum. It’s high in a hype-rich environment that has led consumers to expect $200 (or less.)

    As for “a few extra bucks” — don’t let my hyperbole throw you. In the short term, it could certainly amount to a fair bit of extra revenue. But might it hurt in the long run? Nintendo (by its own admission) is the only console maker planning to profit from its hardware in the early days of this war. It has room to drop the price, if it really wants to.

    Maybe I’m wrong. I wouldn’t mind, in this case. :)

  5. If you are building that home entertainment theater, know you want a next gen dvd player, and love having all of the bells and whistles right out of the box, then the PS3 is probably the easiest solution.

    A friend (and home theater junkie) recently said something interesting to me. He said, “guys like me want the very best components for our theater. We won’t buy the PS3 for the blu-ray drive because we want the best blu-ray drive, assuming blu-ray even wins the standard war. So the PS3 has to beat the Xbox 360 by its merits as a gaming system, and as of right now, it looks like an over-priced gaming system with no coherent online plan.”

    I can’t help but get that “nickel and dime” feeling from MS.

    All the console makers are indulging in a little nickel and dime-ing. As a consumer, I’m irritated by the fact that I have to buy a second controller for any system. As a businessman, I understand the rationale behind unbundling the second controller.

  6. Brian\’s comment should also include a mention about WiiConnect24. I\’m particularly intrigued with some pictures that have been emerging from the Japanese press… the Wii displaying instant local weather updates, for instance. I\’d certainly turn on my TV in the morning just to see that, and if there happens to be a $5 retro game being advertised in the corner of the screen, it could result in many, many impulse buys. :)

  7. Agreed; lots of potential there!

  8. Actually, I’m a little worried about the notion that the Wii is always on. It will certainly improve the experience, but will it be at the cost of a higher electric bill?

  9. One of the original design goals of the Wii was to bring the power consumption down as far as possible. The link I posted in my first comment to this article describes the process that Nintendo adopted to achieve this goal. Always-on operation was a result of their efforts at lowering power consumption, not the other way around. I would love to see some specs of actual wattage, though.

  10. While we may be paying for the WiiConnect24 service through our electric bill, we’ve already been paying for the ability to wirelessly power on our Xbox 360s through our electric bill. And in the case of the PS2, we’ve been paying a higher electric bill for the ability to… umm… see a red “standby” light.

    From DX Gaming, both the PS3 and Xbox 360 “leak” about 17.52 kWh of power per year while turned off, which they estimate to be a cost of $2.63 per year. I put “leak” in quotes because the 360 provides you with a service for the cost, which DX Gaming admits is worth it.

    I think Philip is right in thinking that the Wii’s power consumption will be lower than this. The GameCube, by comparison, only leaks 3.50 kWh per year, or about $0.53 per year.

    As for the main topic: While I agree that $250 seems high considering the hype, I can forgive it more since the Wii is the first Nintendo system to have a pack-in game at launch since Super Mario World on the SNES. While I’d definitely prefer to purchase a $200 Wii without the sports games, the $250 price is easier to swallow by getting a game (arguably 5 games) with it.

  11. I’ll agree that Nintendo should have handled rumors better. They could have raised expectations of price a little better.

    However, that doesn’t mean that the $250 price tag was a bad move, even with the internet’s ‘backlash.’ Sure, I may grumble about the price, but I’m still going to buy the system at launch. And we hardcore fans may even forget that steep price the moment the music starts on Twilight Princess. Those who really do find the price too high can wait a little while and pay less. What they’re doing right now is segmenting the market.

    Rumors are that Nintendo is , remarkably, actually going to make money on sales of the console. That means that Nintendo can drop the price on the Wii without taking as much of a hit as Sony or Microsoft. Or, more cleverly, Nintendo has a credible threat of being able to drop the price, thereby making a price war unattractive to Microsoft and Sony and keeping prices high.

  12. An English translation of Iwata interviewing Nintendo’s product designers can be found at http://wii.nintendo.com/iwata_asks_vol1_p1.html . It goes into some detail about the design issues surrounding the Wii’s power consumption and size.

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