Wii price cut required to offset slowing sales - Analyst

Wedbush's Michael Pachter believes further PS3, 360 price cuts will force Nintendo to discount its 71-million-unit-selling console later this year.

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This morning, Nintendo reported an annual profit of ¥229 billion ($2.44 billion)--a number many game companies would envy. However, the figure marked the first decline in profits in six years for the Kyoto, Japan-based game giant. Net income for the 12 months ended March 31 fell 18.1 percent to ¥229 billion ($2.44 billion), with revenues slipping 22 percent to ¥1.43 trillion ($15.2 billion).

Michael Pachter thinks a new color and $50 worth of bundled goodies won't be enough to reinvigorate Wii sales

One major factor for the decline was the flagging momentum of the Wii, which has now sold nearly 71 million units worldwide. Alarmingly, Nintendo predicted sales will fall another 12.5 percent, thanks to a further slowing of Wii sales. Wedbush analyst Michael Pachter believes that the still top-selling console will see increased competition later in the year--competition he believes will force Nintendo to further discount the $199.99 console.

"In the future, lower pricing on the PS3 and Xbox 360 will provide consumers with a more difficult choice when considering a new console," wrote Pachter in a note sent out this morning. "The Wii enjoyed a $350 price advantage over the PS3 at launch and a $150 advantage until September. Now, the gap has narrowed to $100, with the feature-laden PS3 a tempting purchase for prospective console households. The holiday Wii sales boost was primarily attributable to a $50 gift card promotion offered by Wal-Mart; while we expect similar promotions at holiday next year, we expect the other consoles to be lower priced by then, further eroding the Wii’s competitive price advantage."

Pachter continued, "Beginning this week, Nintendo will include Wii Sports Resort along with Wii MotionPlus (a $50 value) as part of the Wii bundle in the US, so we expect demand to increase through the middle part of the year. However, we believe Nintendo will have to cut the price later this year in order to keep demand steady. Should the Wii price point remain at $199, we think that the December quarter poses a difficult comparison, and we expect the company to have difficulty meeting its overall sales goal for the fiscal year."

Discussion

140 comments
kwanzudood
kwanzudood

"Wedbush's Michael Pachter believes further PS3, 360 price cuts will force Nintendo to discount its 71-million-unit-selling console later this year." Michael Pachter dons a mask and cape at night as Captain Obvious and woos investors with such profound claims like this.

tremor33
tremor33

You know what would speed up sales? Better games. I've played all the best games the Wii has to offer and nothing really entices me to use the Wii anymore other than the prospect of Mario Galaxy 2 and Metroid.

jarvans
jarvans

@ smithers_109 You are correct LOL! That makes it even better!

thingta42
thingta42

Wii HD Console Bundle 200-250$ comes in Black, White, or Silver. One Wii remote + Wii motion plus Wii HD Console that displays atleast 720p Larger Hard-drive Improved Online (No more WI-FI) Contains two games; Super Smash bros Brawl & Wii Fit 800 Free Nintendo points to spend on Nintendo Classics. -------------------- See now there's a bundle that would get people buying a Wii again.

meateater79
meateater79

Really doubt a price cut is going to increase Wii sales by that much. I would rather pay $300 for a game system to play games than $150 for a game system with which to conduct an experiment in the buildup of dust bunnies. Give us games worth playing, and people will naturally buy the system to play it with.

Tomic2505
Tomic2505

you know im just realizing that 200 is a ridiculous price for the wii. The wii's technology isnt even that great, should be 150. Now the question is why did i pay 250 for a wii:P

Captain_Spoono
Captain_Spoono

I really doubt that even if the Next Next Whatever Gen Wii will really do much besides improve graphics... i mean N has done everything! Whats Next, you play the game by farting into a bag? Inventive, yes... But Fun?

Delston
Delston

Wii's games are 90% garbage....I don't see a lot of PS3/360 games sitting in bargain bins in grocery stores, the same can't be said for the Wii...perhaps if they didn't completely abandon their base (gamers) they would have sustaining profits... Oh boy! a new color :P (lame)

jamesm7786
jamesm7786

Analysts create problems. Yes they do.

Noffelhonk
Noffelhonk

I must admit that I've been considering to purchase a Wii lately, I really like some games they offer, but 200? Really? Same price as a 360 including two games? Make it 100 and I'm all yours. I think a more reasonable price tag in the face of competition would make the Wii much more interesting for the originally targeted customer group, the casual gamer. And I guess even self-proclaimed "hardcore-gamers" would consider a purchase at a 100 price tag :-).

MP40_sprayer
MP40_sprayer

Everyone has a Wii nowdays, slowing sales isn't much of a surprise. It's not like they're consumable items, once you have one would you want another?

Devvy01
Devvy01

the black wii is still too expensive , should be same price as the white consoles..

thingta42
thingta42

@ Glade_Gnarr Doubt it, i bet Nintendo's next console in the next gen (not this gen) will be another wii but with HD. Nintendo needs to make a new model of the Wii this generation called the Wii HD if they want sales increase. Just releasing a new colour isn't going to make people go out and buy a new one. I would gladly spend 200£ on a Wii HD if it upscaled all current and new wii games to 720p. Then i would start buying Wii games.

Glade_Gnarr
Glade_Gnarr

I'm beginning to believe this generation will last the full 10 years and with all the profit made from the wii nintendo will be the first one out the door next gen, maybe then they'll finally have a more technologically capable console.

MrFreshPies
MrFreshPies

I had a Wii for about a year, maybe a bit less. And yeah the novelty of it just got stale real fast plus I couldn't work out how to connect it online wireless. I just didn't have the time to work it out cause I had my final exams that year. So I ended up selling it, sometimes I do regret it cause it's not a bad console at all, in fact it's actually quite fun, but compared to Xbox and PS3, it just doesn't manage well in terms of full-on gaming.

pete_merlin
pete_merlin

Erm, doesn't everyone already own a wii? Mines collecting dust atm

Richardthe3rd
Richardthe3rd

THIS JUST IN: Pre-sliced white bread should make sandwich creation easier!! Oh man! Maybe I should be an analyst too!! @ Pachter: /neverending facepalm

monson21502
monson21502

so 500 k sales a month is slowing down? wish i could get just one months profit that nintendo makes off the wii :lol:

sheah1
sheah1

@hatieshorrer Touche. But these were taken care of pretty quickly (albeit in the stupidest ways possible) and they weren't the main selling point of the consoles like motion plus. Though I suppose the console working might be a selling point...

hatieshorrer
hatieshorrer

@sheah1 Ahem... Five years Killzone 2...Four years Halo 3... Sixaxis...RROD...

sheah1
sheah1

@Megavideogamer Sorry man, no way in hell is that happening. I've said it before nintendo is the single laziest console developer out there, they couldn't be bothered to make the damn thing HD in the first place (so the PS move is going to swallow the movement genre whole), the haven't managed the nintendo games properly (look at the massive gaps between the zelda: the twilight princess and Metroid: other M), hell, they couldn't even be bothered to make the damn thing work properly on release (motion plus). They were lazy and now they're getting what, unfortunately, they deserve.

Quezakolt
Quezakolt

I feel that Nintendo should make the Wii a "cheap" console. The manufacturing price i'm sure is very low compared to other current consoles, and if i remember correctly Nintendo always made sure not to lose money on a system even at launch. There some games i'd like to play but it's not HD, and the Wii is an overclocked Gamecube, which used a modified G4 (it's a 10 years old processor - one I have in my very old Powerbook). Honestly they must be making so much cash out of every sell, I don't want to feel cheated.

Megavideogamer
Megavideogamer

71 million Wii consoles? That is a lot. Nintendo should start working on Wii version 2. How about calling "Wii Advance" and make a HD console with double the PS3/Xbox 360 power and great games for it? People seem to like the motion controls already so give them great games to go with them? How about it Nintendo...

metallic
metallic

I've owned a wii for a couple years now and I hate it. Worst purchase I've ever made. Besides a few phenomenal games, every game is garbage (and I've played every major release). It's basically a $200+ piece of junk I let my 2 year old daughter play with. It's not even close to worth the price they have it in stores. Cut the price in half (including the price of the controllers) and maybe it would be worth it. I think nintendo should put a bit more power under the hood for their next system so developers have something to work with. It would be nice to have some third party games that were actually good.

DaBrainz
DaBrainz

Has Patcher ever been right about anything? Nope. Japanese companies are raising prices across the board because of the currency disparity. Nintendo is effectively cutting prices by adding WM+ and WSR and keeping the sales price the same.

evrdayblues
evrdayblues

Get your facts strait, analyst. Or maybe you have a reason not to be straight, mister analyst.

evrdayblues
evrdayblues

"The holiday Wii sales boost was primarily attributable to a $50 gift card promotion offered by Wal-Mart;" That is a lie. The Wii was sold out everywhere, not just Wal-mart. Wal-mart has nothing to do with Wii success. New Super Mario Bros is the reason for Wii doing well in the holidays, period.

Ronin893
Ronin893

Your real problem is no trophies. lol No, really its the lack of high quality games. There is more than 2 hand full of titles that i am itching to play.

blooky
blooky

They need to sell software - how about a greatest hits program? I'm blown away that so many games that came out years ago are still full price. I would buy a ton of older games if they were in the $20 range (Super Mario Galaxy, Zelda to name a couple).

nocoolnamejim
nocoolnamejim moderator

The Wii, as presently priced and with it's current game lineup, is not a good value in my opinion. I agree with the need for a price cut.

Hvac0120
Hvac0120

The Wii shouldn't be a $200 console right now anyway. Include 2 Wii Motion Plus' and 2 Wii Remotes and Wii Sports Resort. THEN... in order to sell the systems and get momentum going, Nintendo needs games that utilize the Motion Plus adapter to come flooding in this fall. Without the software to support the device a bundle isn't going to help much. _

The_Dude1212
The_Dude1212

@eal-zubieri Metroid Prime 3 Red Steel 2 The Conduit Prime examples of quality FPS's on Wii. (inb4MPisaFPA)

eal-zubieri
eal-zubieri

@coltACP i respect your opinion but wow i mean the multiplatform games on the wii sucks alot and some times don't get any ports for example mw2 and no excelent shooter games and wii games leans towards casual games then hardcore which are for children and old people (70and above lol) even my six years old brother throwed it to collect dust after playing super mario galexy .

zMd113
zMd113

I own a Wii and I never play it. I'll play Super Mario Galaxy 2 then never play it again. I use my PS3 more than anything.

Frequenxy
Frequenxy

I disagree with Michael. I think a new color plus the bundle pack along with the price cut of the Wii to $199.99 will help with Wii sales. I really think different colors can help more than someone might think. Plus, with Wii Sports and Wii Sports Resort is great, plus a Wii Motion Plus, all for $199.99. If you think about it, Wii Sports Resort by itself, and a Wii Motion Plus by itself is $70. Add that with the Wii console price reduction, that's $120 dollars you don't have to pay.

slickvic1990
slickvic1990

theres no need to lower the price. consumers are going to start getting a great deal with the new motionplus and wii sports resort pack in. also, to say that everyone who wanted a wii has one is kind of short-sighted. there are over 300 million people in the US alone, and the Wii has sold 70+ mil worldwide. there's still a market out there. i think we all knew sales would slow, but as long as nintendo makes good games (with new mario, metroid, and possibly zelda), systems will move. the only reason people are making a big deal about slowing sales is because the sales were booming to begin with.

Cruse34
Cruse34

The wii can't be cheaper from the PS3, that being said I don't see either getting a price cut this year

coltACP
coltACP

i would disagree horusalis, i have two ps3's and after battlefield, they seem to be gathering dust. I have been playing alot of monster hunter and just got sin and punishment, so arcade crazy it sends an adrenaline rush that no other game on my ps3's can.While the feature list on the ps3 is great, i enjoy watchin blu rays, downloadin films an buring my albumns onto my 400GB hard drive, for games, the Wii draws you in. As for upcoming games, on Wii i have preordered metroid and no more heroes DS (isn't out europe yet) and super mario galaxy 2 is bound to be great. PS3 wise haven't noticed anything except dead space 2 (loved the first, almost enjoyed it as much as resi 4). Also for downloadable games the Wii seems more potent still, the sheer volume of retro oldies and even some of the Wiiware titles are getting better and better (i must say releasing secret of mana though a year ago was a masterstroke).In comparison PS3's best downloadable game is still burnout from 2008, with a few gems in the form of final fight DI and afterburner recently, others aren't that great. If given a choice of which to live without i'd hand over my ps3.I know that's just my opinion but some other people are bound to feel the same.

Horusalis
Horusalis

I agree with many of the comments that everyone who wanted a wii already has one. Also, I know plenty of people (including myself) who has or wants to sell their wii for either a ps3/xbox 360, hasn't played it in so long, or there's nothing coming out that holds any interest. Even with a price cut I see no big sales in the future for the wii.

ultramalakian
ultramalakian

That's stupid. There's alredy a new good bundle, even thoug anyone who wanted a Wii must already have it. This bundle will be the last move from Nintendo, IMO. And if the sales are slowing down, is because of the fact that ANYONE INTERESTED ALREADY HAS A Wii??

The_Dude1212
The_Dude1212

People, Nintendo learned their lesson about price cuts with the Gamecube. I wish 3rd party devs put the quality back into Nintendo's Seal Of Quality, like they used to be back in the day... Quite frankly, Nintendo is the ONLY dev who know how to make quality casual games anyone can enjoy, even the core gamers.

JacobD1505
JacobD1505

The Wii was alright...but I think the fad is over. Nintendo should start working on their next console. No game on the Wii can match up to the games that the 360 and PS3 can put out. Period.

wwlettsome
wwlettsome

Woohoo, come on PS3 cut that price another $50 and that will give me all the incentive I need to buy!

atopp399
atopp399

I don't see M$ or Sony cutting prices any time soon. Nintendo hates cutting prices so even if the others did it would take Nintendo quite awhile. The fact is they don;t really need to. They are still selling massive amounts of Wiis. Sure their sales may be slower than they have been but market saturation is catching up with them. Nintendo isn't really competing with Sony or M$. People buy a Wii for different reasons than they buy the other two. M$ and Sony need to worry more about each other.

da_chub
da_chub

funny this is that nintendo has been at the top of the gaming community for the last 3+ years with the Wii. It is only a matter of time before they sell 100million and no matter what anyone says, that is better then xbox360 and ps3.

Tauu
Tauu

Instead of a Wii price cut, how about a robust online service with classic games offered up with mutiplayer capability like SNES F-Zero and SNES Mario Kart? I'd be all over that.

1blackone
1blackone

Its so weird that Nintendo thinks that they have dropped off. Don't they realize that they have sold all their Wiis to any feasibly-possible buyer and have no one else to sell to? To take it to its extreme: would they also consider it "flagging momentum" if they sold 6 billion wii consoles one year, and then sold 0 Wiis the next? To hijack that Brian Regan joke; Damn Nintendo, you won, already. Take your salesman trophy and go on vacation.