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Wii Hardware To Be Profitable At Launch
Next Generation reports on comments by Nintendo's Reggie Fils-Aime, stating that the Wii will be profitable out of the gate. It's been well-publicized that the consoles offered by Sony and Microsoft are subsidized by those companies. From the article: "Nintendo, however, has traditionally avoided the 'razor and blades' business model by selling its consoles above what they cost to make. Fils-Aime confirmed to Reuters that the Wii would carry on the tradition. 'We will make a profit on the entire Wii proposition out of the box -- hardware and software,' he said. 'That really is a very different philosophy versus our competitors. We are a company that competes only in the interactive entertainment space so we have to make a profit on every thing we do.'" The comment is undoubtedly meant to assuage analysts nervous about the relatively late release date and somewhat higher than expected price for the Wii.
Sony and microsoft are not game companies. They both make money from other things. Nintendo is a game company. They make money (i.e. NEED to make money) from the game system and games. OF COURSE they will sell them at a profit!
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the video game analogue of "razor blades": the Atari 2600 was not originally designed so that anyone could write software for it. However, other people did(something for which Atari received no royalties for) and eventually the glut of titles(some pushed out by Atari itself) helped to doom the system in the 83 crash.
Fast forward 2 years and Nintendo comes along with their new machine but a different outlook: Nintendo will approve or dissaprove each game released for their system. To enforce it, Nintendo patented a special type of chip that had to be put in each video game before it would play on the NES, and was able to collect royalties on every game sold.
Monstar L
Nintendo continues it's strategy of not being dumb. Of course they want to sell the console for a profit. The 360 and PS3 count on every sale leading to X number of games before they start turning a profit, whereas Nintendo counts on every sale turning a profit and every game turning more profit. Selling consoles at a loss is a risky business. Yes, it gets your console out there, but you then need to sell a good number of titles. Selling consoles at cost is the smartest way to do business, because you don't assume a damned thing and you make money on any games people buy. But yeah, being slightly above that doesn't hurt at launch. Nintendo does one thing and does it well: Video games. It's not that they are in dire straights right now, it's that they know this market very well. They made the Gamecube profitable. They know this industry. Selling consoles for profit is brave in that it can hurt your ability to get up your market share. But losing money on every single console so you can sell more consoles and lose more money doesn't make a lot of sense, does it?
IANA*
This is something new. Imagine a company making money by selling a product they manufacture. Bizarre. Wonder if this radical concept will ever catch on. It is truly shocking.
Well it always helps when you don't have to stick a $400+ BluRay drive in each unit.
nice to know that nintendo is using cheap parts
Yep - and this should mean that the full-price games will be a lot cheaper, too, since Nintendo doesn't need to claw back money lost on the hardware.
... Right?
If cross-platform games end up being the same price on the Wii as on PS3 and Xbox360, albeit with cruder graphics, then it's time to get suspicious.
Tedious Bloggy Stuff - hooray?
It's worked for the last twenty years, no reason to stop now.
IANA*
I believe Nintendo's already said that they're keeping the price point the same for A-list titles ($50), while both Sony and MS are charging $60 or more.
This guy's the limit!
I get the impression that Nintendo was perfectly willing to sell the system at a loss, but given the amount of room that Microsoft and (especially) Sony left as far as price differentiation, it makes sense for Nintendo to sell the Wii at the highest price point possible. Its still cheaper than the alternatives, and I don't expect demand to lessen significantly, and should MS or Sony ever lower their prices, Nintendo has room (and now a budgetary surplus) to respond in kind.
If anything, if the PS3 sells as well as Sony seems to be hoping (and despite all the bad PR and angry fanboys, it still could), you have to give the console makers credit for starting to acknowledge that people will pay almost any price for a console at launch. It sucks to be the consumer, but this is basic economics at work.
The only thing I hate more than hypocrites are people who hate hypocrites.
The comment is undoubtedly meant to assuage analysts nervous about the relatively late release date and somewhat higher than expected price for the Wii.
People have predicted for months that it would be $250. Only recently did the media put their fingers in and try to 'predict' it would be $225 or even $200. The only reason they even considered those crazy prices was:
1) Every Nintendo console so far has been $200 at launch. Obviously, they couldn't keep that up forever, especially since this system is quite a bit more complex than the previous ones.
2) Exchange rates. Any fool knows that exchange rates only set the price range of a product, not the exact price. The fact that it was $225US when converted on that date didn't mean anything except that it wasn't likely to be $200 here. Nobody in their right mind uses an odd number like $225 when pricing here, at least at launch.
As for the late date... Are we still predicting the PS3 will actually be out before that? I'm still predicting shortages and mayhem for the ps3 launch... It's still a tossup on the Wii launch. I'm hoping they have enough that I get one, but who knows? If there aren't enough ps3's, Mommy and Daddy are gonna buy Wii's for Johnny instead, so he'll have a Christmas present to open.
And maybe that's Nintendo's logic... Capitalize on the failure of Sony. If they launch before Sony, they aren't quite as 'new'. If they launch soon after, amid Sony's sellout chaos, they can pick up extra launch sales and make the figures look better.
I could just see the media spin: Nintendo fails to sell out, slow start for Wii.
But if they wait until after: Sony sells out, loses sales to Nintendo's Wii Launch.
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
Have they ever lost money on hardware? I still can't believe the wiimote/nunchuck will cost $60 though..
it has a "wii" small price....hahahaha....please dont kill me
they say it is often more relevant then the comment above, all we know is its called the Sig!
It's nice to know that Nintendo isn't trying to reinvent the wheel (and charging us for it in the process).
You know, you bring up a good point I don't think a lot of people fully appreciate:
- and this should mean that the full-price games will be a lot cheaper, too, since Nintendo doesn't need to claw back money lost on the hardware.
Since Sony/MS are trying to claw that money back, it means that perfectly legal things that hurt their software license revenue will probably be targeted by them with lawyers who should know better. Imagine that because of the expensive PS3 titles, some kids in a dorm or the same college set up a system whereby the share their games with each other. Not copy -- just share the individual game. That's 100% legal. But then Sony will probably find some way to sue them on the grounds that it interferes with their business model.
Apology to Ubuntu forum.
Let's look at that "$200 Launch" thing. To keep the $200 price point, Nintendo has continually had to give us less with the system.
80s: The NES is $200 at launch. It comes with 2 controllers, 2 games, a light gun, and a crazy robot accessory.
Early 90s: The SNES is $200 at launch. It comes with 2 controllers and a game.
Late 90s: The N64 is $200 at launch. It comes with 1 controller.
2001: The GameCube is $200 at launch. It comes with 1 controller.
"You spoony bard!" -Tellah
Two annotations for you:
ROB was only in the NES deluxe set, which I believe cost more than $200 and was discontinued shortly thereafter.
Also, an often forgotten piece of trivia: Nintendo 64 was launched in Sept. 1996 at $200, but the price was announced to be $250 at the prior E3 (or spring TGS, I forget exactly) and was dropped only about a month prior to the console's release due to price changes from Sony and Sega.
EVERYONE said it was going to be $250. It came true! WTF?
Maybe if you are a delusional idiot would you think they might sell it for $150, and to be fair, I had a small delusional idiot hope that it might be $200 like the Gamecube, but that didn't for one second knock away the reality that it would more than likely launch at $250.
That's not very surprising, when they just announced an hour ago that they're going to pwn the UK for £180 on the thing, only £20 less than a 360 Core model.
For reference, the $250 you Americans will be paying equates to roughly £134.
"I Know You Are But What Am I?"
And the console is sold at a $200 loss, that means each game has to make up $20 just for the console manufacturer to break even. Hence why this generation's games are yet another $10 more expensive than the previous generations.
Online services do add another revenue source however, which can help.
So the Wii will make a small profit for Nintendo, every game will make them a profit, online services may make them a profit. The games can be sold with far less licensing fees as well, hence why Wii games are cheaper. Also because the games are cheaper to make (not HD, etc) they'll be cheaper some more.
Nintendo will make billions in profit. Let's see Microsoft and Sony make billions in profit from their home console business...
I'm not sure that they'll go through the effort to sue. With file sharing via p2p, it's possible for one person to share with many other people, making the resultant copyright infringement "damages" much higher. Hence the ridiculous amounts quoted per song in RIAA lawsuits.
If you loan a video game to your buddy down the hall, Sony would be hard-pressed to claim that you deprived them of more than one extra sale. Perhaps if you organized a floor-wide or dorm-wide game swapping club, the liability would be higher. But with the damages on the order of hundreds of dollars, I doubt that it's worth Sony's lawyers' time to file suit.
Like when Gilette was getting OUT BLADED so they were like, "f#@!$ it. We're going to five blades. Why anyone would need such a feature is honestly beyond me, but hey lets pack as much STUFF into the Razor as we can and people will buy it."
:p
PS3 pretty much same deal really
If Nintendo is to be believed and the games are going to cost $50 each and the $250 pack comes with a game then obviously the system is worth ~$200 standalone... which is a very nice price point.
On the contrary. By buying off the used racks, you're making it possible for those who purchase new to continue doing so. Joe Gamer is more likely to purchase Madden 200X at $50 new if he can trade in the last two new games he purchased for credit; credit which comes from you buying used games. So, indirectly, Sony still sees your money.
Well they did put a total pos wireless adapter in the ds, and didn't fix it for the lite (read: cannot even see many routers, even with all security disabled). Lets hope they didnt skimp this time, especially since they didnt even put an ethernet adapter.
The Wii is a supercharged gamecube with a faster CPU & GPU using last gen architecture. Even if they sold the Wii at $200 they would still make profit. Greedy! P.S: I'm still buying one!
The $250 would be a lot easier to swallow if there was a second controller in the package.
I mean come on, it is the Wii ("We") right? Play together? Wii Sports and one controller makes no sense.
I can see parents buying this for their kids. The kid opens the box, sets everything up and then wants to play baseball, or tennis, with dad. Oops, we can't experience this fun new system together because the system only came with one controller. You can sit still on the couch and watch daddy play though.
Part of me would rather that the Wii launched as an "unprofitable" machine with 720p output. I don't care as much about HD-DVD or BD, but a more competitive resolution would have been nice. That said, I'm excited that it's a realistically priced system. The new controls are really driving a lot of enthusiasm. No one is getting nearly as excited about the PS3. The Wii promises to break out of the "more of the same" approach of the other two major systems with some opportunities for gaming which simply didn't exist in a mass-marketed system. So ultimately the lack of 720p will not stop me from buying the system, but I do wonder if they could have packed in a little more. -Jim
"nice to know that nintendo is using cheap parts"
/sarcasm
Yeah because Nintendo is widely known for releasing consoles you have to turn upside down just to get them to work.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
I did a Google search, and I believe you're right. The NES seems to have come in two flavors at first:
1. Deluxe Set ($250) which included Duck Hunt, Gyromite, and ROB
2. The Action Set ($200) which included Duck Hunt and Super Mario Bros. (The original version had two cartridges, later they replaced it with a single cartridge that had both games on it...)
"You spoony bard!" -Tellah
The broader point is that Nintendo will be shipping a system capable of graphics, wireless web browsing, playing music, storing data, and whatever else but they don't need to do much of anything to protect it or lock it down.
Nintendo can create a Linux boot disc that lets you do web browsing, play music / videos, write documents in ooffice using wiimote as a 'giant pen' to write in 'air cursive', etc. Or if somebody else does that they won't care one bit, because even if people buy their system and never play a single game they still make money on it. In fact the only thing they would even care about is if you can use that to boot illegal copies of games, but even then only if it's easy enough for the masses to use and then only to protect some of their extra profit from games and to protect other developers making games for Wii.
You've saved the day.
Nobody in their right mind uses an odd number like $225 when pricing here, at least at launch.
Exactly! Everyone knows that numbers like 225, 13, and 666 come with way too much stigma in these parts. Using a number like that is considered suicide as it will drive away most video gamers (video gamers are known to be superstitious).
Nintendo is insane. They feature weird (and not always functional, in the case of some 3rd party games, see madden) interfaces, mediocre (but good-looking, at least in the case of the Wii and DS lite) hardware. And... profitability. Which is totally out of the ordinary. Microsoft and especially Sony are REALLY pushing the graphics/hardware bubble this generation - and either of those systems on HD will produce some fantastic experiences. But then I've read that both of those systems may not turn a profit for their companies for years to come. Obviously, this isn't a viable strategy for companies. Great graphics are awesome for the end consumer, but if MS/Sony take a huge loss, why did they bother? Sony has a reason with the blu-ray drive... but is promoting a format worth hundreds of millions and potentially billions of dollars of lost profits? Hell of an advertising campaign.
You forget one thing sure all the past consoles have launched at $200, but $200 back when the NES and even SNES were launched is worth more then $200 now thanks to inflation.
"Personal ownership is a hallmark of conservative capitalism. And I don't believe I am entitled to anything that I did n
The NES western launch had two configurations both included the NES, two controllers, RF adapter and PSU:
1. The Deluxe Set which contained R.O.B., a Zapper, and two games: Gyromite and Duck Hunt
2. The Control Deck which came with Super Mario Bros.
Wikipedia has more info here.
The Action Set was not a launch configuration as it came out three years later in 1988. This does not necessarily mean that there were not bundles containing both SMB and Duck Hunt before this date. Sadly, Nintendo altered the bundled games quite frequently without changing SKUs even. I personally own a set which was bundled with Gyromite, Duck Hunt, and Stack Up along with the accompanying accessories. As far as I am aware, this had the same SKU as the Deluxe Set.
Nope, didn't forget it. You should probably read before you type.
"1) Every Nintendo console so far has been $200 at launch. Obviously, they couldn't keep that up forever, especially since this system is quite a bit more complex than the previous ones."
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
It's no secret that Sony wants to use the PS/3 as a vehicle to get Blu-ray units into people's living rooms. They expect to lose money on the consoles, but make it back through licensing from game makers and (much) more importantly sales of Blu-ray movies from their entertainment division. Also, if Blu-ray becomes a standard - they'll collect royalties from other consumer electronics manufacturers and other content providers.
Microsoft's stock price as been stuck in a narrow trading range for several years. To increase it they need growth. The Xbox is more about moving from the home 'office' into the living room. Their goal is living room domination by offering a gaming device that morphs into a media center and ultimately a set-top box. If they lose money on the consoles, well so be it.
Nintendo - they just want to sell you entertaining games.
[Insert pithy quote here]
Risking feeding the troll here, but most gaming consoles in the past have too, and also in the past, the super expensive bleeding edge consoles that were expensive as hell (jaguar anyone?) didnt sell worth shit, and if they did manage to sell worth a damn, the losses were more than the returns. The genesis was using pretty low-grade specs compared to what COULD have been bought in those days, same with the SNES, both systems went with "last gen" specs for over half a decade as well.
Also, SEGA made the mistake of trying to go high-end and it killed them in the console business, Remember the saturn and the Dreamcast? good systems, but they lost too much money on them, they werent making good returns, plus lack of third party games (sony had a nice monopoly over 3rd parties at the time) and then sony coming out with the ps2 as a direct response and even had a marketing scheme and tons of hype (that didnt add up until MONTHS after the system came out) that buried sega (also, remember the "trade in your OLD dreamcast for a NEW ps2!" thing?)
The only difference today is that the ps3 has yet to prove itself (blu-ray is already flopping like a fish out of water.. not even the ps3 can save it, the psp couldnt save UMD..) and the 360 is backed by a very powerful and strong company that can make up for its losses from the glut of money it has from other interests and franchises. Same could be said for sony, except recently they've been hemmoraging money and are cutting off dying franchises to stop the downward spiral, the blu-ray format and UMD are last-ditch attempts to establish something that will make them some money for a time. After all, two closed format standards within a year of each other? that's bizarre, even for sony. usually there's a good wait between attempts.
So what's better about new gen?
The one about perfect competition assuming perfect demand elasticity. I'd be willing to wager that there are X number of people willing to buy a Wii when it comes out and that the subset of those willing to buy the Wii at $150 is not significantly larger than the subset of that number of people willing to buy the Wii at $250.
The Action Set wasn't available at the initial launch. There was the Deluxe set and thhen just the "Control Deck" - a console only version. Super Mario Bros. was available as a seperately boxed cartridge.
The action set came out soon afterwards...
These pretzels are making me thirsty.
Isn't that when (among other things) you sell a product for less that it cost of production/shipping? We (meaning Western nations) seem to lay the smack down on anyone who undercuts our production costs. But if one of our own does it, it is called "lost leader" etc... I guess that is one of the perks of rolling with the rich kids. If I was Nintendo though, I might be a little pissed at Sony and MS cutting market share through predatory prices while Nintendo keeps prices above costs. Can you imagine the sales figures for Nintendo this time around if the PS3 and Xbox were priced AT cost? Meh, Nintendo will get my cash anyway. First console to ever share my home with my PC.
The Wii is not much more advanced than the gamecube. The gamecube is five year old technology that sold (for a profit) at $200 when it was new technology. The Wii costs significantly less than $250 to make, I suspect. The motion sensor technology isn't that expensive. Also, they removed the DVD playback, that they promised to include, to keep it cheap. To keep it cheap for THEM, not us... hence, it's still the max $250. If you think they removed DVD playback because it wasn't needed, you're foolish. Read Iwata's interview with the developers. They made it small because they wanted it to fit in tiny spaces with your TV (they stressed that EXTREMELY in the interview)... yet they removed DVD functionality so that you have to put a DVD player beside it to take up more space?
Also, have you seen Virtual Console game prices? $5, $8, and $10 for NES, SNES, and N64, respectively. Why so much? All it costs them to sell them to you is the price of their auction software and the bandwidth and servers to get it to you. Way too high for what it is, even if it isn't THAT expensive.
Is it worth $250 for the technology you get? Probably not. I'd suspect the highest bang for the buck is the PS3 even if it is expensive. Xbox 360 isn't a bad deal either. The Wii, for what you get, is a rip off. Overclocked Gamecube with a new controller and (finally) online support.
Don't get me wrong, I was excited about this system, and I still look forward to playing it and buying one. However, acting like Nintendo is better than Sony or Microsoft is stupid. If anything, they're just as bad, if not worse. Nintendo managed to lose the console war after having a stronghold on it for years for a reason. They're arrogant. They lost that arrogance after the gamecube, so they were making the Wii to be an awesome system... then they saw the hype over the Wii and the value they promised. Now, they're arrogant again. They're close to ruining a great system, in my opinion. Botched launch date for old technology, the Leizpeg event where they kicked Nintendo loyalists in the balls, dropping DVD to save money, $60 controllers for a system that is supposed to be heavy multiplayer, expensive VC games, overpricing, etc.
Heh, I wasn't referring to complexity at all ;)
All I'm saying is that a Dollar today is worth more then a Dollar tomorrow.
"Personal ownership is a hallmark of conservative capitalism. And I don't believe I am entitled to anything that I did n
Where is "Mario Party Wii"?
The potential for this with the new controller is huge! This was one of the most frequently played games on my Game Cube and the possibilities for mini games is nearly endless with the Wii-mote.
But I haven't heard a peep about this game, not even that someone is working on it and will put it out in X months. It seems like such a natural game for this new system... would have been a killer bundled app.
Talk about bringing the whole family into the video game experience, it's perfect. I just have to think they're going to spring this game on us, fully finished and ready to go, close to relase.
Yup, the games should be at least $10.00 cheaper because they're getting rich off the $20.00 they make from the console purchase.
1) Every Nintendo console so far has been $200 at launch. Obviously, they couldn't keep that up forever, especially since this system is quite a bit more complex than the previous ones.
In an earlier Wii thread, Karma Sucks pointed out the following:
Let's play "spot the pattern."
SNES launch price: 25000 Yen / 200 USD.
N64 launch price: 25000 Yen / 200 USD.
Gamecube launch price: 25000 yen / 200 USD.
Wii launch price: 25000 yen / ??? USD.
Hrm.
You can blame the higher U.S. price on a bad exchange rate. While the complexity may be higher, prices for tech have dropped over time. I can get a Dell desktop for $300 which is way less than the $2500 I spent on my 386 back in 1991. It is more complex, but still a lot cheaper.
Reading code is like reading the dictionary - you have to read half of it before you can go back and understand it.
They are working on WarioWare first.
I think what killed the Saturn was not being high end from the get go. It's generally agreed that Sega planned on making a single processor system with limited 3d capabilities for that gen, and added the second processor late in the game to compete with Sony's PSX. Sega probably didn't want to risk gutting their arcade business with a console that could compete head on with Virtua Fighter 2. Tekken 2, OTOH, was generally considered better on the PSX than in the Arcade (Tekken 3 restored the balance, but nowadays arcades are dead everywhere but japan, so it moot).
The Dreamcast was off the shelf all the way. An existing Hitatchi Processor, A PowerVR video chip that was already in use in PCs and a Yamaha sound chip. What made is so amazingly next gen was Sony and Nintendo's nearly 10 year old hardware. If the NES hit the market to compete with the Bally Astrocade, it'd be pretty revolutionary too.
Now the Jaguar, that was just poor design. The main proc didn't have any on die cache, which killed performance, and they stuck a Motorola 68k in to mediate between the graphics processor and sub processors. Developers took the easy way out and ported Genesis games to it with more colors. So instead of Rayman's and AvPs we got Double Dragon's and Bruce Lee's. Crappy Mortal Kombat wannabes instead of a Street Fighter II competitor didn't help. When everyone got tired of digitized gore there weren't any fighter's worth playing. It's too bad, I bet the Jag could've done some nice Neo-Geo ports.
Anyway, the point is, Sony's in a very different position today. They're the clear market leader, they've got tons of cash and other businesses to keep them afloat. They've still got hype left over from the ps2 launch, which should have been a disaster. They're entering a market that blows thousands on consoles off ebay. And they've got tons of major third party devs (and unlike Sega, they're not going tick them off, at least not the big ones). Yeah, Sony's dropped the ball on a few things, but trust me, they'll do fine. They'll gonna be No. 1 for at least one more Gen.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
From the looks of it:
http://wii.nintendo.com/software_warioware.html
This is basically just a random collection of mini-games? And from the page above "Players: 1-player, some 2-5 players", not everything would even include everyone?
I think Mario Party is superior because it is all placed within the context of a board game, which everyone can immediately understand and relate to. If you prefer, Mario Party also has the option of just randomly selecting a mini-game and playing it, so it can emulate Warior Ware, but some of the game boards in previous Mario Parties have really been cool and they addss a whole level of fun on top of just competing in various mini-games.
As far as the "Players: 1-player, some 2-5 players", that is quite disapointing, actually.
"Obviously, they couldn't keep that up forever, "
This is the part that refers to inflation. The 'especially' part after it means there are additional factors as well, which I listed.
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
No, the combination of all the technological parts related to processing power in the Wii is a rip-off. With any console, you get more than the machinery, you get the fun value, which is basically everything else that the console can provide to you *through* its parts. The fun-value is only created through the purchase of games, though. The Wii is the only console of this (and the last, and arguably others) generation to really differentiate itself by what it offers above and beyond it's machinery, besides the titles unique to the system (notice I say "titles," not games. It's reasonable to believe that a Halo 2 clone could exist on the PS2, but it's still not "Halo" and doesn't have the value that Halo does). Additionally, the other consoles do differentiate themselves through their hardware (Cell vs. whatever the 360's got, compared in numerous ways), but at the end of the day, all that hardware does basically the same thing: crunch numbers and spit out graphics. Nintendo has created new hardware that does something besides that, and through that hardware, the experience on Wii is vastly different.
Finally, it's very important to understand that the value of the hardware and the fun-value are directly related. The value of the hardware is zero if no one writes anything for it, and very low if no one writes anything *good* for it. It's getting harder and harder to write something *good* because generally with video games, good and unique are directly related, meaning that a console's value is tied very closely to the games that are unique to itself (i.e. Madden 2007 raises the value of a console very little, if at all, because all consoles have virtually the same game. The value it delivers is based on what is different between each port). What does this mean? Sony and MS will have their blockbuster system-sellers that make the system, like Halo 3, obtained through exclusive licensing and contracts. The Wii will have more games unique to itself than the other systems combined because they are made possible through its unique hardware, and even if it has games that are available on other systems, the possibilities for differentiating the game through the unique controllers may make it more valuable on the Wii.
The fun-value is vital to a console's success because the raw hardware power isn't much of a differentiating factor anymore. Everyone can display 3d graphics at a pretty fast rate, so there's no ability to differentiate: every console can provide the same types of games that do the same thing. The Wii potentially has a much greater fun value because it has differentiated itself and will do things that the other consoles can't do, when the other consoles can virtually do the same things across the board. This, in turn, raises the value of owning the Wii hardware. The combination of the fun value, plus the hardware value that is affected by the fun value, dictate the total value of the Wii. The Wii's hardware *cost* may be low, but Nintendo can sell it at a profit because the fun value pushes the hardware value over cost. Sony and MS are forced to sell their consoles as loss-leaders because the market has dictated that the hardware's value isn't as high as its cost, due to lack of differentiation.
I'm sure an econ major is going to come along and kick my ass on this, but in general, it makes sense. You have to separate "value" and "cost." Value is acquired through many factors, and differentiation is a huge one.
(I'm residing in the UK so I'm going to use sterling.)
Seriously, I think the Wii is priced too high. I can get a core 360 for just £20 more and I think that for all the talk of wii360, MS would probably prefer the Wii to fail.
I'm sure they (MS) have lots of options for how to stifle the competition - this is Microsoft after all! - including boring stuff like advertising. Most likely they will keep the price as it is and offer more incentives to the retailers.
It's one thing to say that most people don't have HD tvs but most people like to future proof their purchases. And by spending £20 I can get a far far superior piece of kit. I can buy the core TODAY and upgrade it later. I actually think the Wii games are more "attractive" than the 360 games - but the 360 games LOOK more attractive.
Basically what I'm saying is that pricing the wii at £179/$250/250 is moving the Wii from "definitely must buy as soon it comes out" to "hmmm, same price as a 360, do I really want to risk it for a crappy gimmick."
Ronan
But do you really think Sony could get a blockbuster settlement out of what amounts to a video game rental cooperative, even if it were campus-wide at one of those state schools?
As far as I know, the Nintendo DS Wi-Fi chip can see any access point that strictly conforms to the IEEE 802.11b standard, including short preamble and 2 MHz transfer rate. But a lot of cheap access points marketed solely for residential use take shortcuts that break 802.11b rules.
50$ * 4M units = 200M$, not 20M$.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
Just a minor correction on your assumptions so far:
You really ought to read rather than skim over the information released yesterday, or at the very least look it up on Wikipedia.
$249.99 for the Wii, one remote, one nunchaku attachment, a Wii Sports game, and Opera -- all ready to go out-of-the-box. Yeah, a Wii-mote costs $39.95, but one has to consider the technology going into that thing. Given what's in the box for the price, it actually isn't too bad a deal. Just a DualShock2 controller for the PS2 was $29.95 for several years, and it was just buttons, two analogue sticks and rumble.
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The motion sensor technology isn't that expensive.
Bullshit. It has never been done right. There is a lot of R and D in that. Also, those controllers have to be nigh unbreakable. Nintendo spends money on system and controller durability. This time around, along with increasing the graphical power, RAM, and internal memory, they reduced the power consumption of the system and kept all GameCube ports. Add to that the fact you are getting built in wireless and a composite video cable in the box and you can see that there is some value to this machine.
They made it small because they wanted it to fit in tiny spaces with your TV (they stressed that EXTREMELY in the interview)... yet they removed DVD functionality so that you have to put a DVD player beside it to take up more space?
So you were going to throw out your DVD player when you bought a Wii?
Also, have you seen Virtual Console game prices? $5, $8, and $10 for NES, SNES, and N64, respectively. Why so much? All it costs them to sell them to you is the price of their auction software and the bandwidth and servers to get it to you. Way too high for what it is, even if it isn't THAT expensive.
The NES classic games for the GBA have been selling like hotcakes for $20. People who own Oblivion have been buying HORSE ARMOR for $2.50 on XBOX live. Why the hell would they give their shit away if they can make money off it? You also forget that their online gaming system will be free. People who want Tecmo Bowl get Tecmo Bowl for $5 and you get to play Super Smash Brothers online for free. Damn you, Nintendo!
Is it worth $250 for the technology you get? Probably not. I'd suspect the highest bang for the buck is the PS3 even if it is expensive. Xbox 360 isn't a bad deal either. The Wii, for what you get, is a rip off. Overclocked Gamecube with a new controller and (finally) online support.
Same argument was made for the DS vs. the PSP. Problem with the argument is that the PS3 and the Wii are two very different machines. The PS3 is a souped up PS2. The Wii is a kind of video game machine that has never been seen before. So you can pay $600 for $1000 of hardware and get a graphical upgrade, or you could pay $250 for $250 of hardware that you can't find anywhere else. It depends on your priorities. The PS3 may cost $1000 to make, but it's worth about $200 to me. The Wii may cose less than $250 to make, but $250 is less than I would have paid for what they are offering.
However, acting like Nintendo is better than Sony or Microsoft is stupid. If anything, they're just as bad, if not worse.
Every Nintendo console is nearly indestructable. They treat their customers well and fix and problems that do arrive without much hassle. Both Sony and Microsoft settled class action suits in the past generation for faulty componants that they would not replace.
Botched launch date for old technology, the Leizpeg event where they kicked Nintendo loyalists in the balls, dropping DVD to save money, $60 controllers for a system that is supposed to be heavy multiplayer, expensive VC games, overpricing, etc.
The wireless X360 controller is $50. The PS3 controller will likely be that much or more. Again, Nintendo's controller offers things that other controllers do not, and unlike Microsoft and Sony, you can be sure that it will be built like a rock. DVD playback is trivial and therefore unnecessary. I currently have 2 machines that play DVDs that are not DVD players. How many more do I need?
Serously, go buy a PS3 or a X360 if you want, just stop sucking Sony's and Microsoft's respective cocks.
are they seriously calling the thing the "wii remote" why not the wiimote? that way we can all sound like elmer fud.
Yeah but you try buying an item in the USA using cash. Most american goods have very odd prices once you take into account tax. Is there any other country in the world where an item is marked as $9.95 on the shelf but you can't buy it with a ten dollar note, since they add some random amount to it? Would it hurt americans to tell the truth about such a small thing as the price of a chocolate bar in a grocery store? </pet_rant>
wouldn't wiimote be a bit redundant?
One thing to consider... Do you really think PS2 is worth $150 right now? It has been that price for some time now and never seems to get lower. It at least should be under $100 by now but people are willing to pay $150. Its the 'perceived value' that you have to take into account and I could easily see paying $250 for the Wii and a bundled game.
Demonstrably false - why did Nintendo drop the price of every console it has ever made?
Disclaimer: I'm not a consoly person, I've never owned a console in my life. That said I was excited by the Wii, and I'm still considering buying one - probably importing if from Japan. (The price is not exciting but that's a different matter.)
I never thought Nintendo were going to bundle a second controller, I did honestly think that they would give us something useful, like a classic controller shell to fit over the wiimote. That to me would have added value to the package
I was distinctly unimpressed by the E3 video of Metroid, it looked boring, it looked like Halo. Zelda did look more interesting, but never having owned a nintendo console in my life I have no attachment to Zelda, Mario or Samus. There are a large number of people who eagerly waiting for these characters/games and they will spend £180/$250/250 + whatever for their games, but there is a larger number of people who need to be convinced. Nintendo needs the hardcore market, it needs the loyalist market but it also needs the ignorant grand/parents market and the 30 something casual gamer market.
As well as upping their advertising in the run-up to Christmas, I think MS will do one of three things... (I've kinda already said the first one elsewhere)
1) They can give us something for free - include the wireless controller, Kameo (or something else they own) - just compare the picture of Wii sports baseball with a picture from Halo 2 (an xbox game) - That's going to help convince people that the Wii is a kiddie's toy.
2) Drop the Core completely, and reduce the price of the premium to £239/349/$349. The point of the Core machine was to get people into the shop and talking to a sales rep, who convinces them that for ONLY 100/$ more they can get everything they could ever want from a system. (Also having only one system should reduce the manufacturing costs.)
3) Keep the prices/systems and use heavy handed MS tactics to encourage stores to sell Xboxen.
I'm sorry, but to suggest that the Wii has an inherently greater "fun value" is a tad disingenuous. The fun value of the console remains unproven. There is a great deal of interest in the potential fun value, and a lot of forgiveness because the system/games have not been finalised. One could argue that the Xbox/PS3's greatly superiour processors allow them to cram in 80% more fun than then Nintendo Wii.
It still remains to be seen whether the games developers will exploit the Wii's fun value. As you pointed out the games are where the fun is going to be, so why pay an extra £30/$50 for the console.
Actually, our sales tax strikes me as a very good way to tax. It's the closest thing we have to a 'flat tax' that a lot of people push for. The rich buy more, so spend more on sales tax. The poor buy less, so pay less tax. (The exception is unprepared food. There is no tax on that. Exact expections vary from state to state, though.)
And yeah, there's another country. Canada. They actually have 3 different sales taxes in many places in Canada. Some of our states (I live in 1) only have 1 tax.
I'm sure there's other countries out there that do the same.
"If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
Most major western countries do have sales taxes. For example in the UK it is 17.5% ;-) i.e. that it is a good thing to penalise spending compared to saving. I haven't thought much about that myself. I have heard that "sin taxes" have had some good effect, for instance turning 19th century gin-soaked england into a nation of beer drinkers instead.
What I was objecting to was
(a) they don't include the tax in the advertised price marked on the item and
(b) the after-tax values are weird amounts, which is annoying if you are buying just a couple of items and were hoping for it to be a dollar amount. It makes it harder to get the exact change out of your wallet while you are going to the till.
Also, sales taxes on essentials (food, fuel etc.) proportionately affect the poor more than the rich, so it is a slightly regressive tax, but economists might argue that the poor would only waste the money anyway