GameCube Sales Quadruple, Nintendo Debuts New Slogan

Thanks to GameSpot for their report that sales of Nintendo's GameCube have quadrupled, following the price cut to $99. The piece quotes an effusive GameStop spokesman as saying: "Our sales of Nintendo GameCube have increased more than fourfold. We are currently increasing our shipment requests for the system throughout the holidays." Meanwhile, the Chicago Sun-Times reports on the new Nintendo adverts, both TV and print, with the tagline "Who Are You?" - the print ads "...show the heads of Nintendo characters superimposed on famous images, including players in the rock band Kiss, a person straddling the now-demolished Berlin Wall and no less an icon than the Mona Lisa", and the massive $100 million ad spending will also feature "a 60-second cinema commercial... shot on location in Asia... [and featuring] more than 500 extras."

Comments

Re:Completely good news?

[Acidic_Diarrhea]

From everything I've ever heard, Nintendo does not and will not sell consoles at a loss. This is a widespread rumor concerning the hardware business started by Sega when the PS1 was launched and Sega believed the price was too low. Now, the profit margin on the Gamecube at this point must be very slim but I believe there is still profit being made. Remember that since the Gamecube does not use DVDs, there is no licensing fee to pay for that. Furthermore, the PowerPC chip that the Gamecube has has probably come down in price since the Gamecube launched.

But regardless, Nintendo is very much in the black, as you seem to be implying that they are teetering towards the red. See this article for information on this. (Basically, they made 95 million in their first fiscal quarter of the year.) They may not be making the kind of money that was coming in during the heyday of the NES but Nintendo is not in dire straits.

Re:Lower the price, and sales increase

[sabinm]

what you are talking about is price elasticity. it basically means that how much a product's demand is affected by a coeficcient of >/;+/-1 due to price increase or decrease. A product is price elastic if by raising or lowering the price you see a change in demand. how great that demand is of course how you determine the range of the elasiticity. FI, if I sell 100 gamecubes at 149us dollars, and then lower my price to 99 and sell 400, that is a massive price elasticity. by reducing price by 1/3, i increase sales drastically.

This does not often work in taxes and govt, becasue the revenue that is returned to the people is not always spent back into the govt. FI, the US tax cuts this time around went to paying down debt and in very secure, low yield securities, with no one selling and everyone holding because prices were so low that they had to go up. In a bear market, not only are prices low, but you buy stock at low price to reap a high reward later. So, in effect, in several years, yes, we might get more money from reduced taxes. However, this has nothing to do with tax revenue in the short run as a decrease in the cost of govt (taxes) did not increase spending one iota, and on top of that there was an increase in govt spending that decreaesd revenue to the point that the govt has taken to using future revenue (credit, defecit spending) in order to make up for the non-elastic outcome of lowering taxes. Don't worry, someone will have to raise taxes in the future to pay for lower taxes today.

Needless to say, lowering the price on a gamecube is a bit more simple than fiscal and monetary policy of billion-trillion dollar economies