Wii Won’t Budge on Pricing

Wii owner wannabes hoping for a dip in pricing for the holidays will have to wait a while for the Nintendo console to drop below it US$249 retail price, the company said Thursday. George Harrison, Nintendo’s U.S. marketing chief, quashed any hopes for a lower price citing the continued strong demand for the Wii in an interview with Reuters.

Nintendo would keep the price steady for the foreseeable future, he said. The console maker is in an excellent position even with the recent price cuts from competing manufacturers Sony and Microsoft. Even there, aggressive pricing moves have failed to stall Nintendo’s momentum, he continued.

Triple Threat

With the Wii, Nintendo has hit the trifecta in console gaming, with a price point significantly below its competitors, constant demand and short supply, a situation that offers no reasonable incentive for the company to lower the price.

“You can’t find one,” Michael Gartenberg, a JupiterResearch analyst, told TechNewsWorld. “At this point, Nintendo could probably be raising prices, not dropping them, and they would be doing OK.”

The decision comes as no surprise to Van Baker, an analyst at Gartner.

“They have no reason to cut [the] price this Christmas season,” he agreed.

In terms of putting enough Wiis on store shelves to satisfy consumers, the U.S. arm of Nintendo is trying to persuade those at the company’s Japanese headquarters to allot a larger share to supply enough Wiis for the U.S. market, said Harrison, but no decisions have been made. Nintendo has only recently begun making decisions regarding holiday sales in the U.S.; however, he said, American executives have more work to do.

Meeting supply and demand worldwide is a tricky balancing act, said Gartenberg. “Those decisions are not made in the U.S. Nintendo America does not control supply. Those decisions are made in Tokyo and determining how many units the U.S. will get. I’m sure that all those folks in the U.S. are pleading their case and will try and free up more allocation,” he explained.

Set by Thanksgiving

While Microsoft and Sony seem to have been quicker with their holiday plans, Gartenberg said that as long as Nintendo has every item it needs in place by Thanksgiving, consumers have no reason to worry.

For the 12-month period ending in March 2008, Nintendo will have made 16.5 million consoles in all, an 18 percent increase from the 14 million the console maker had initially planned, according to Harrison.

Whether even that will be enough to meet demand remains to be seen, Gartenberg stated. “It depends on what kind of software they release for the fall and how popular those titles are. It may end up that that is a low number.”

Gartenberg does not expect the delay of “Super Smash Bros. Brawl,” a four-player fighting game initially scheduled for a holiday release date and now set for Feb. 10, to hurt console sales for the Wii.

“They are going to have ‘[Super] Mario Galaxy’ available. They have a number of strong third-party titles and of course are moving in the whole ‘Wii Fit’ line,” he pointed out. “And remember, they’re still pretty strong with people who want to play the ‘Wii Sports’ stuff.

“Their product lineup looks good,” he continued. “At this point it’s going to be a question of producing enough units and meeting demand.”

However, Baker believes that Nintendo may have overestimated demand with the additional 2.5 million units.

“I don’t think they will hit 16.5 million [Wiis sold] by March,” he noted.

More Nintendo Executive Changes

In other Nintendo news, Perrin Kaplan, vice president of marketing, announced Thursday that she would leave the company at the end of the year. A 15-year veteran, Kaplan’s decision comes just one month after Harrison announced he would not be with the company after year’s end.

Gartenberg does not expect the loss of Nintendo’s U.S. marketing heads to be a problem, however.

“They are certainly key players, but Nintendo is a good company, and they’ll find talented people [to replace them]. Remember, Nintendo’s core decisions are made in Tokyo, and you’re not seeing a personnel shift there. I’m sure Nintendo has no shortage of candidates who are looking to take those positions,” he concluded.

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