Predicting when the Wii U will get a price cut
From the moment a video game system releases there is a large group of people clamoring for a price cut. Sometimes it is best to wait if the platform doesn’t have enough games you want and other times it’s great to jump in at launch prices. This our estimates on when and how the Wii U will receive its first price cut.
Nintendo has a long history of price cuts on their platforms, some of them being met with intense fanfare. The 3DS’s major $80 price cut in August 2011 is the one you probably remember most, but the GameCube’s $50 price cut in September 2003 was another big cut.
At that time Nintendo had to halt Cube production due to overproduction. If you think the 3DS’s price cut was humbling for Nintendo, think again. They had to stop making Cubes in 2003. I’d say that was a tougher pill to swallow.
After all how many times do you hear about a company ceasing production on their product and that product surviving?
The Wii was notorious for not receiving any price reduction until 2009, nearly three years after launch. This was due to the high demand for the console that was unlike anything else in the industry during those years.
But the Wii U may not fly off store shelves as fast as the Wii. Even if it does half as good, it won’t be able to maintain it’s launch price for long. I can’t see it lasting at the $299/$349 price point for 3 years like the Wii, especially with other next-gen consoles to compete with in 2013.
Let’s look at a bit of history regarding Nintendo console price drops.
The N64 received a $50 price cut 6 months after launch, a $20 cut in 8/1998 and final $20 reduction in 8/1999 to settle at $99.
The Cube had it’s price cut from $199 to $149 only 7 months after launch, and then in September 2003 dropped another $50 to $99.99.
The Nintendo DS launched at $149 and dropped to $129 about one year later. This was all before it started flying off store shelves with the release of the DS Lite.
Now that we have that history under our belt we can see that Nintendo platforms usually receive at least one price cut within the first 12 months on market with exception of the Wii. Unless the Wii U starts breaking the sales records set by the Wii you should expect a price cut during 2013.
It’s not if, just a matter of when. Two opportunities present themselves. A price reduction during E3 2013 would be far enough from the launch so that early adopters don’t feel too left out. A price cut in June 2013 would be nearly 8 months after launch. This would help to counteract hype from the inevitable reveals of the Xbox 720 and the PS4.
If those next-gen consoles are announced to be releasing before the end of 2013, there’s the chance Sony/Microsoft will also announce their prices at E3 2013. And going by rumors it looks like those devices could be $399 at the least with the possibility of a cheaper subsidized version that comes with a monthly payment.
Nintendo could drop the Wii U’s price and boast that their next-gen console is $100 cheaper (potentially $150 or $200) than the others.
The other time a Wii U price drop would make most sense in 2013 would be in August/September. They could ride the current $349 price as long as possible but drop the price of their Deluxe set just before the rumored Holiday 2013 releases of the next Playstation and Xbox consoles.
Historically, Nintendo likes August/September price cuts. They cut the GameCube, Wii and DS’s prices during those months. This is a good time as it lets you ride out the higher price point thus earning more profit while allowing you to attract more consumer interest during the holidays with your lower price.
Whatever Nintendo does with the Wii U’s price I am more than willing to go out on a limb and say that they are more likely to drop the Deluxe 32GB Set down to $299 and eliminate the 8GB Basic Set altogether than anything else.
They could manage to make profit on the $299 Deluxe Set so long as they reduce costs between now and the first price drop.
They’ve said that they are selling the Wii U at a loss but I’m not convinced they’re selling the Deluxe Set at a loss. The Basic Set? Sure. We must also remember that Nintendo is likely to promote new games that use two Game Pads at once during the latter half of 2013 and if they sell the Wii U at a loss at $299 they can break even or make profit off $100+ Game Pads for their first wave of dual Game Pad software.
If they wanted to keep costs down and make profit on a $299 Deluxe Set they could always drop Nintendo Land from the bundle and include some smaller, cheaper eShop games.
Those are just our predictions for when, and how the Wii U will receive it’s first price cut. It will likely receive it’s first price reduction before it hits it’s first birthday if Nintendo’s history is anything to go by. When it happens is the real question.