Nintendo Announces Japanese Wii Price

Wowzer writes "Nintendo has revealed to Famitsu.com, at the company's recent press conference unveiling its financial results, that Wii would arrive in Japanese stores with a maximum price tag of 25,000 yen. After taking in account various factors, the conversion to other currencies comes down to a launch price of: 225 dollars, 225 euros, and 150 pounds." Update: 05/25 13:45 GMT by Z : GamesIndustry.biz points out they hope to ship 6 million units by next March, and an Opera exec has said you can browse the internets with the wiimote.

Comments

Congrats Nintendo

[creepynut]

All this negative press about Sony, and you come out a true champ.

This is one I'll be getting myself for Christmas. I don't see them changing the price much, if at all when it comes overseas.

The next question is, how much of a profit are they making on that? IIRC, Nintendo doesn't have a history of taking losses on their consoles, someone correct me if I'm wrong. At this low price, is it possible they've taken a turn on this one?

Either way, even if Sony has a killer launch lineup, I don't see them making the family Christmas market given the steep price difference. Unless the 360's price has a Christmas price drop, I doubt they'll be much in the match, since they got their head start last year.

Re:Congrats Nintendo

[onewing]

At this low price, is it possible they've taken a turn on this one?

I seriously doubt they will be selling these at a loss. The hardware itself is claimed to be "two or three" times more powerfull than the gamecube. Since the GC launch in 2001 you can assume the technology for the Wii (which is very similiar IIRC) is a fairly affordable price at this point. The controllers themselves dont seem to contain anything terribly expensive, just an innovative use of two existing technologies.

The only things that may possibly affect this will be the addition of 512 MB built-in flash memory, the possiblity of an additional wiimote and the sensor bar itself. But I dont belive that any of these is a deal breaker on a possible 200$ USD launch price, especially with how weak the USD is currently.

Re:Congrats Nintendo

[AKAImBatman]

Kingston 512MB Flash Cards can be had off of Amazon for $11.39. The list price is claimed to be $39.99. Even if we assume that the $11.39 figure undercuts the actual cost for some reason, I think it's safe to assume that the bulk cost would easily be within the range of those figures.

Similarly, complex universal remotes retail for about $19.95. You can usually find them much cheaper than MSRP. The sensor bar's cost will likely depend on what it's made of. Since we can probably assume plastic, it probably won't be too costly either. The Wii itself uses off-the-shelf components for its hardware, making the only questions the CPU and GPU. Both of these appear to be modified forms of existing processors. Which means that in bulk they should be very affordable for Nintendo. Therefore, it's likely that Nintendo will be able to sell the Wii at a $199 price point without taking any sort of loss. At $250, they'd probably be making a profit.

In comparison, both Microsoft and Sony have built their consoles out of highly customized and/or cutting edge hardware that require significant expense to manufacture. (At least initially.) The result is that they have to sell at far higher price points. In Microsoft's case, it's expected that they're losing money on each unit. (Though I seriously doubt that they're losing as much as the $200 that has been claimed by the media.) Both Sony and Microsoft should have paid attention to history. The Jaguar, Saturn, Neo-Geo, and Turbografix were all consoles that were on the cutting edge of technology. They all lost out to consoles that were inexpensive, built with off-the-shelf components (plus/minus a custom part or two), and were easily manufactured using less-than-cutting-edge technology.

Re:Congrats Nintendo

[EnderWiggnz]

with flash, you plug a DOM into your onboard IDE, and hit it with a glue gun. /producing upwrds of 250k units a year this way :-)

Re:Congrats Nintendo

[AKAImBatman]

With that $11 price tag, you are assuming they are using regular flash memory. Perhaps they want the 40x flash, which is faster and more expensive.

I doubt it. The flash is only used to store games downloaded from the Virtual Console service. When you consider how small most of these games are (barely a megabyte or two for the largest), you realize that using fast flash would be a waste of money.

I believe the Jaguar was based on Motorala 6800 CPU (16 bit, Mac).

Not exactly. The Jaguar had a Motorola 68000, a 32 bit DSP, a 32 bit GPU, a 64 bit object processor, and a 64 bit blitter. Basically, it had a LOT of custom processors stuffed into its case. Not to mention the 2MB of RAM, which was exceedingly expensive back in 1993. (4MB was still pretty standard on PCs.)

Re:Congrats Nintendo

[AKAImBatman]

Interesting enough, the NES was, adjusted for inflation, was a little more expensive than the average of the two 360 price points ($350 or so).

But it was right in line with the consoles that preceeded it. The Atari 2600 was introduced at $199.95, as was the Colecovision. The Intellivison was introduced at $299, and the Bally's Personal Arcade was $350 back in '79. So adjusting for inflation, consoles have continued to get cheaper over time. Which is in-line with general electronics which have also gotten cheaper with time.

The problem with adjusting for inflation when setting new price points is that consumers are used to prices going down. Over time they will expect more for less. So if you give them a price that used to be acceptable (after adjusting for inflation), they'll feel you're overcharging them. Ergo, it's wisest to allow your pricing to follow the general trend of products.

Sold!

[MMC Monster]

I haven't bought a console in over a decade. But I will by a Wii. I've been thinking about a Playstation 2, since it's a mature system by now, but Nintendo has a lot more family oriented games, or so I hear.

Re:Sold!

['nother poster]

Because, everyone wants a media center. Microsoft and Sony say so.

Re:Sold!

[Zardus]

Here it goes :-)

Two years ago one of my friends had a party to celebrate his birthday and some of our friends' high school graduations. There were 8 people there, 4 guys and 4 girls. One of the guys brought his Gamecube and I brought mine. After playing the requisite Smash Bros games (we've had a Smash Brothers rivalry ever since the week the original was released), we networked the gamecubes to play Mario Kart DD. Well, unknown to us (as we were too involved losing races to the girls to notice), a huge Arizonan monsoon thunderstorm brewed up outside while we were playing.

It happened about an hour into playing; a match had just ended and we were about to start another. Us guys were all involved in choosing the track and such, and the girls were resting their hands. So it just so happened that every guy in the room was holding his controller, while all the girls had put just theirs down. Suddenly there was a huge clap of thunder as a lightning bolt hit (from what we've been able to figure out) the garage door outside (killing the motor there), got into the power system, traveled throughout the house killing various computers, televisions, and stereos, and finally found my friend's Gamecube (mine was on like four surge protectors since the second TV was across the room from any unused power plugs and surge protectors were all that we had for extension cords). It traveled through his Gamecube and split up. Part of the charge went into the 4 controllers hooked up to his GC, and the other part went through the network adapter, over the ethernet cable, into my GC, and out of the controllers. Now the way the GC controllers are built (and the way we hold them apparently), two of the metal screws on the back make direct contact with our middle fingers. As such, the four people who were holding their controllers (the guys) recieved pretty powerful electric shocks. The guys all jumped up, yelped, and dropped our controllers, right at the *exact* moment the sound of thunderclap reached us. All the girls in the room thought we were just scared of the thunder.

Of course, the Gamecubes, controllers, and network adapters (not to mention a few computers, TVs, stereos, and the garage motor) were all completely fried. Apparently though my friend had insurance for this sort of thing, and all our Gamecubes and accessories got replaced (I was hoping he'd get me a different color. Mine was silver and I had grown tired of that color. But alas, he got me another silver one). I'd since wondered if he really had lightning insurance or if he just shelled out to replace our stuff, but one of the girls at the party (now my wife) assures me that he did.

So yeah, that was a fun night. My wife still thinks I'm afraid of thunder, and will accept no explanation to the contrary. Sigh.

BS

[Yahweh Doesn't Exist]

if it's 225 dollars, then here in the UK it will be 225 pounds. FACT.

still a good price in absolute terms though.

NOTE!

[Guppy06]

"After taking in account various factors, the conversion to other currencies comes down to a launch price of: 225 dollars, 225 euros, and 150 pounds."

This is not official. This is mere speculation on the part of the article.

I, too, can pull numbers out of my ass. For example, because the launch price of 25,000 JPY is exactly the same number they used for the GameCube, they'll release the Wii in the US for 199 USD (like they did with the GameCube).

Until we get official numbers, though, this is all speculation.

Price

[tgpo]

I can't say the announcement of the price has swayed me in any way. Price was never what held me back on newer systems. I havn't bought a system since the Nintendo 64 because most games are nothing more than recreations of games that have been available for years. The thing that does swing me to the Wii is the innovation and "Road Less Traveled" feel of the entire system. It no longer feels like a Gamecube V.2, nor does it feel like they are slapping some new hardware inside the old shell to make games prettier. I feel that is all the PS3 and 360 have going for it, they have more power than their earlier versions. SO WHAT! If you simply do updates and resell as brand new their is nothing innovative and exciting. It seems that Nintendo caught on to this and decided to try things a little differently. I saw that simply reshaping the wheel wasn't enough for most people and decided reinvert at least a small part of the wheel. Now I'm not saying that Nintendo is doing something that is 100% brand new, no, but I do say that Nintendo is doing something in a totally new way and they stand to reap the benefits of it. Sometimes, even a small diversion from the path will lead you to a whole new place.

Sold!

[nbannerman]

£150?

I'm buying one. End of discussion.

For the price of a 360, I can get something original and interesting, plus 3 games, and waste away hours being entertained. Seriously, why do I need a 360 or a PS3, when this thing looks like it might actually manage to be a games console, instead of a glorified media centre? ;)

Been wondering about the "loss leader" idea

[ianscot]

IIRC, Nintendo doesn't have a history of taking losses on their consoles, someone correct me if I'm wrong. At this low price, is it possible they've taken a turn on this one?

Given the marginalization of the GameCube, I've been wondering whether Nintendo wouldn't be smart to lose a smidge on each console this time around in order to regain market share. Their two competitors have blown prices sky high and narrowed their market considerably (I think) by making it necessary to pony up for an HD screen in order to really see the fun from their new systems. Sony and MS are vulnerable, vulnerable as can be. Nintendo needs to get the third party developers on board, and the relative cheapness of developing for Wii is a step that way. But imagine if the Wii release price was a bit of a loss leader, a $175 sort of thing, and they got a huge jump starting next November or so in their market share. Developers would take note.

I doubt it happens. As you say, Nintendo makes profit on its consoles (and everything else), and doesn't play the market share game a la Microsoft. Sony always tries to bundle everything with some sort of wrongheaded standards war "leverage" move. MS desperately tries to gain market share despite losing rivers of money, and imagines they understand the "extreme" tone "hard core" gamers like, 'cause you know, they're so cool. The teams keep running the same plays... I still think Nintendo is the clear winner this round, in prospect.

Re:Been wondering about the "loss leader" idea

[ronanm]

Dude, the basic xbox is $300, $250 is in no way blowing the competition OUT OF THE WATER

The average consumer is going to stick with what they know and either buy the 360 for $300 or if they're budget concious they can always pick up a cheap PS2.

It makes loads of sense for Nintendo to lose a few bucks on a system, if it's going to increase their customer base.

Half the cost of one, a third of the other...

[ZSpade]

This is a severe undercut... In fact there has never been such a mighty difference in prices in past console wars.(unless you count the neo-geo, meh-heh!) It will be interesting to stand by the sidelines and watch Nintendo again rise.

Wiimote

[goldaryn]

Update: 05/25 13:45 GMT by Z : GamesIndustry.biz points out they hope to ship 6 million units by next March, and an Opera exec has said you can browse the internets [sic] with the wiimote.

"One-handed" browsing! Well spotted, ed. Will be useful :-)

Folks always forget the VAT

[sirwired]

In the uproar over how much more consoles (or electronics in general) cost in the UK and Europe, folks always forget about the VAT. (Value Added Tax)

IIRC, in the UK, Europe, and Canada, the VAT is included in the advertised (and paid) price. In the US, the rough equivalent (Sales Tax) is never included in the advertised price (except for Gasoline for some reason). Of course, not all localities in the US charge sales tax, the amount varies depending on where you live, and the amount is lower than VAT.

A more fair comparison would be to take the VAT out of the price, and THEN compare how much the equipment costs in various countries. That determines how much the manufactuer and retailer actually receives for the console.

SirWired

Re:Folks always forget the VAT

[Merlynnus]

Off topic, but in Canada, that's (mostly) not true. Advertized prices are almost always without the Provincial Sale Tax (PST) and the Goods and Services Tax (GST). The rate varies from province to province (and in the East, they've combined it into a Harmonized Sales Tax (HST)) but it runs about 14%. Of course, there's no PST in Alberta and the GST is dropping a point sometime later this summer. Regardless, just like the US, everything except gas tends to be the "before-tax" price.

Re:Folks always forget the VAT

[gizmo490]

VAT isn't included in the Canadian advertised price either we pay a 7% GST on top of the advertised price which is our equivalent of VAT. On top of that we pay any where from 0-10% PST (an additional sales tax) depending on where you live in the country. If you compare the Euopean price to the canadian price after all that tax it really doesnt seem like you guys are getting hosed as much. 225 US = about 250 CND + 15% total tax (for my province) = 287.50 CND = 200 Euros approximately.

Headline Inaccurate

[Miraba]

Nintendo announced the MAXIMUM price, not the actual price. 25,000 yen or less, US$250 or less, and "UK pricing will be in line with Japanese and US prices announced."

Source: http://www.officialnintendomagazine.co.uk/news_250 506_wii.html

Get ready for $200

[RyoShin]

The Gamecube was also launched at 25,000 Yen in Japan. The Gamecube had a $200 price point in America.

Unless Nintendo takes into consideration fluctuations of the dollar vs. yen (not sure what the difference is between then and now), I think it's pretty safe to say that we're going to see a $200 Wii. In previous interviews (during E3, I believe) Iwata stated they've had a pretty consistent price point for releases and see no reason to change that- every console system they've released has been done so at $200.

While Nintendo may not have the latest & greatest in graphics processing, the technology they isn't exactly common. It's nice to see that they follow the trend of all other hardware, in that prices fall as technology advances (before you say "But they've all been the same price!", work in inflation, where the NES at launch cost $350 in 2005 dollars)

Re:Under $250 is unlikely

[eonlabs]

I actually think it's very likely.
Unlike sony and msoft, nintendo is not marketing a high-spec machine for the gear heads. They're focused on delivering games, and go to great lengths to make sure that their box is used ONLY for games. Ever notice that the cds spin backwards in a gamecube?
Can you play music on a gamecube?
They're selling a platform for gaming, and have successfully been doing exactly that for over 20 years. Most gamers don't even consider $400 dollars for a system. Remember the Sega Saturn? A system that was broadcast for specs with a $400 price tag. Do we still have sega consoles?
I think 90% of consumers will end up getting the Wii simply because it hits their price range first. I don't personally get new systems till they drop below $150, I don't think Msoft or Sony will hit that mark any time soon. Until then, nintendo has a virtual monopoly on my console game purchases.

In other news,

[mobby_6kl]

Nintendo warns of weaker profits

I'm not saying Nintendo is dying, it's normal to have lower profits while preparing mass production, just thought it'd be relevant.

Re:In other news,

[Zigg]

Actually, operating profits forecasted to be up -- the reason their profit forecast is down is because of foreign-exchange losses.

Nintendo holds a lot of investments in US dollars.

Re:Slightly off topic

[91degrees]

Because unlike you, we know how to leverage our leading-edge efforts into a new paradigm.

Come on ./, get your story straight...

[nmaster64]

A) They didn't announce the price point, they announced a MAX price point, which is very different. That title is misleading.
B) You should note the fact that consoles almost never sell for the same price in different countries, no matter the exchange rates.
C) It would have been worth mentioning Iwata's recent hint: "you may want to check our past records of price points, launching price points for any past hardware." Nintendo's never NOT released a system in the US for anything other than $199.99. Take that + this guy saying it's going to be LESS than ~$225, and I don't see how you can't come to the conclusion that it's going to be $199.99.

My report on this story is here:
Wii: Almost surely $200, but still not confirmed

Re:Under $250 is unlikely

[AKAImBatman]

I don't recall if the N64 was released with a game at launch, but I do recall there being bundles.

It wasn't. Mario64 was sort of a killer title for the N64 and was thus sold separately. That being said, part of the need to sell it separately was that Catridges were very costly back then. Now that the Wii uses inexpensive optical disks, it is again cost effective to bundle a game with the system.

The only question then is, what is Nintendo's strategy? The market has gotten used to the idea that pack-ins are a thing of the past. Will Nintendo go with the flow on this one, or will they attempt to do further damage to Sony and Microsoft's positions by throwing in a killer title with the console?

Personally, I hope they take the pack-in route. Not only will it make their competitors look bad, but it might force them to cough up a pack-in themselves. Which given the costs associated with developing a game on their consoles, would further dig in their losses on each unit.

Re:Slightly off topic

[AKAImBatman]

Why do people say "price point" instead of "price"?

Because we're discussing things in business terms. When you look at marketing a product like a game console, pricing becomes a major marketting factor. As a result, a random price like $231.45 would be a poor choice. (Even if you could sell it for less that way.) Instead, marketeers will develop a set of price "points".

i.e. Should the Wii sell at $149.99, $199.99, $249.99, or $299.99?

Each price "point" is carefully analysed for marketting potency as well as expected returns. The idea is to select one of those points that will meet your goals as well as maximize profits. (Or minimize losses in some forms of the razor-blade model.)

As a result, everyone is trying to second guess Nintendo's choice in price points. Will they hold to tradition and sell for $199.99, or will they maximize profits on each unit and sell for $249.99. Or at the extremes, will they shock the world with a $149.99 price point? Or will they not be able to meet cost predictions and hit the $299.99 price point?

Clear as mud? :-)

Re:Zonk again

[voice_of_all_reason]

http://en.wikipedia.org/wiki/Internets_(colloquial ism)

It's a joke, son.

Re:In real exchange rates

[ronanm]

¥25,000 = $223.30 = 174.79 = £119.36

¥25,000 ~= $225 /= 225 /= £150 !!!

Well, you've gotta add vat onto the conversion price. Say 120% of 175... gives you 210 and 117.5% of £120 makes £140. The numbers now are starting to look a bit similar.

  It also depends on how many units they think they're going to sell in each of the territories. If they think they'll shift more in the US then they can afford to sell them cheaper.

All things considered

[EtherC]

Max Japanese price: 25,000 yen
Remove included tax: 25,000 / 1.05 = 23,810 yen
Factor in realistic JPY -> USD expectation of exchange rate for 2006 4th qtr. (not today's): 23810 * 0.0086 = $204.77
All past Nintendo consoles: $199.99
Difference: $204.77 - $199.99 = $4.78
Compute significance: (4.78 * 540) - (239 * sum(4 8 15 16 23 42)) = 0
Most likely US price: $199.99

(Special thanks to the Hanso Foundation for their significance formula)

Re:Quality Over Quantity?

[Slappytron]

So only 6 million Revolutions by next march? That doesn't sound too good to me.

Assuming Wii launches in October, that's about a million a month, which is above the Xbox 360's pace (which in turn, is selling faster than PS2 at launch).

6 million would be over 25% of the total number of Gamecubes sold (about 21mil). It would be about 10% of the total number of NES's sold (around 60mil). It seems like a very reasonable target, especially for launch when production has not yet ramped up.

The Price Makes Me Happy

[Grayden]

Nintendo Wheeeeeeee!!!

Re:Slightly off topic

[Kjella]

Well, someone already mentioned the specifics of finding an optimal price point and non-linearity but skipped the basics. You as a consumer probably see price as a line:

0 --- 100$ --- 200$ ---300$ --- 400$ --- $500 --- $600 --->

Economists are looking at a graph - the price-quantity graph with points (p,q), and the price is just the y-value. They try to estimate this graph and while for every price there is one price point, many concepts don't make any sense otherwise. For example, there's great uncertainty about the $600 price point of the PS3, meaning what quantity it'll sell. There's no uncertainty about the $600 price - it means you need six 100$ bills.