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

[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.

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.

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.

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 :-)

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

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.

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: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: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)