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Thread: $99 In September?

  1. Megaman $99 In September?

    NEW YORK (CNN/Money) - Nintendo has never been known as a particularly aggressive company when it comes to pricing. Sure, it follows suit when its competitors lower prices, but traditionally it hasn't been one to start a fight.
    The times could be a changin'.
    Disastrous GameCube sales in the company's first fiscal quarter, combined with the threat of losing retail shelf space, could prompt the company to knock $50 off the $149 console earlier than anyone expects.
    "Nintendo historically hasn't cut prices until there was enough volume to break even on the price cut," said P.J. McNealy, an analyst with American Technology Research. "They may have to change that philosophical position to stay competitive."
    A decision could come as early as Thursday, when Nintendo president Satoru Iwata will discuss the company's business strategy at a news conference. A sudden shift in pricing would be surprising, but would certainly turn heads in Nintendo's direction -- something the company could definitely use.
    Even if no cut is announced this week, you can bet on one coming very soon, say analysts.
    "We're expecting the GameCube price to drop to $99 sometime in September," said Mike Wallace of UBS Warburg. "We're also expecting the Xbox and PlayStation 2 to fall to $149 by the end of September."
    Most industry eyes are on Sony when it comes to price cuts -- and that's logical enough, given the company's gargantuan sales lead over Microsoft (MSFT: Research, Estimates) and Nintendo. Heck, Sony (SNE: Research, Estimates) itself said last month that its games division saw across-the-board declines last quarter, with nearly 2 million fewer PS2s sold. That alone would suggest Sony is giving some hard thought to price reductions.
    Here's the wildcard, though. Nintendo, in May, admitted it had fallen short in this console cycle and needed to become more competitive in the market. Its follow-up to that comment at E3 (the industry's annual trade show) wasn't too spectacular, though. In fact, it was run of the mill -- a few mid-level franchise extensions, some third party games and a prototype of a revamped Pac Man game -- which the company hasn't mentioned since, incidentally.
    Want to see competitive? Watch Nintendo start a price war.
    "At E3 we saw Nintendo take baby steps in that [competitive] direction," said McNealy. "The price cut would be a big adult step."
    "If Sony doesn't [cut prices] by September, I think Nintendo will," agreed Wallace.
    It's going to need to if it hopes to hit its sales goal of 6 million units this fiscal year. Worldwide, only 80,000 GameCubes were sold between April and June. The company has suspended production on the machines until this fall, hoping to clear out the backlog of inventory.
    Nintendo's previous attempts to spark sales -- including bundling free games and hardware with the console -- have run their course. Retailers are starting to pressure the company to lower prices or face the risk of reduced shelf space, which would further dampen sales.
    Meanwhile, third-party software publishers have made it clear in recent conference calls that they, too, would very much like to see hardware prices on all consoles come down soon.
    "In the event there's no price cut or there's no promotional equivalent by the holiday season, then we will have to revisit our hardware projections," said Activision (ATVI: Research, Estimates) president Ron Doornink.
    Perhaps most importantly, consumers have made it clear that they're not willing to pay $199, $179 or, in Nintendo's case, $149 for two- and three-year old technology.
    Traditionally no publisher cuts prices until after Labor Day, since August sales are slow anyway. Nintendo, though, could reinvigorate the market and put it ahead a curve with a surprise announcement this week. Maybe more importantly, it could start to reestablish its reputation as a company willing to take risks.
    hmm...well, i dunno. $99 would sure sell systems. but at the same time, it sorta makes the GameCube look like the budget system, and undercuts its value.
    i mean, imagine walking into a store with $100 and thinking, what should i get? an SP? or a GameCube?

    dropping it to $99 would mean that they'd have to drop the price of the GBA/SP. and im positive that that's something Nintendo doesn't want to do considering it it's bringing in most of its profits now. but then again, they are 2 different markets, so you never know.

    although at the same time, maybe being the budget system probably wouldn't be such a bad thing. if i remember correctly, 50% of homes in the United States have videogame consoles in them, and 30% of them have 2 (although it could be 30% of those 50%). GameCubes at $99 would just have to sell to those homes that don't have a second console yet, or are interested enough in gaming to pick up a third. i mean, it's only $99.

    and like Steven Kent said around E3 of this year. Nintendo at this point shouldn't even try to compete with Sony, just keep their fanbase happy, and start getting ready for the next life cycle.

    $99 GameCube could do a good job at getting them more of a loyal fanbase in time for the next generation, yet, i can't help but think that at the same time, it could fuck their GBA/SP profits big time.

  2. Reuters also ran something like that.

  3. I think it's a good move in the long-run.
    matthewgood fan
    lupin III fan

  4. Argh! It sounds like the Dreamcast's last days all over again!

  5. the DC's price drops were much much quicker in succession..

    150 one month.....then 100....79..............49..

  6. Quote Originally Posted by Zerodash
    Argh! It sounds like the Dreamcast's last days all over again!

    yet, with one huge difference. this company continues to make profit.

  7. Quote Originally Posted by Lucas Barton
    yet, with one huge difference. this company continues to make profit.
    Which, oddly enough, is not how success is measured in this industry.

    I really don't care about Nintendo's bank books. I just want lasting support for the conole.

  8. #8
    At a retail level, I think that Nintendo would sell more units by just dropping the price to 99, instead of giving away $50 games. Of course, the consumer still has to buy the game to play the cube so it comes out the same either way, but the percieved value to the consumer is higher.
    Quote Originally Posted by EvilMog View Post
    Screw being smart. This is TNL.

  9. I think it will be a great move, it forces Sony/MS to lower their price as well, which is something I love. Hehe, I can finally have that PS2 or GCN if they keep dropping prices.

  10. Yesssss, I love price drops cuz it usually means that other console will follow.


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