Thursday, 18 February 2010

Wii Needs A Price Cut Say Analysts

Apparently the family console needs another cut in the margin to compete with the pending release of the motion control systems being developed by Microsoft (Natal) and Sony (Arc). This is the conjecture of Janco partners analyst Mike Hickey who believes Nintendo have a limited amount of time if they are to remain competitive:
"Importantly, Nintendo built the majority of their casual mass market oriented installed base from a $250 price point."

"We believe Nintendo needs to cut the price of their console from $200 to $150 immediately, as they should establish as meaningful of an installed base as possible before the Natal and Arc are introduced."

"We believe they also need to generate strong hardware sales momentum into their competitors release or face the draconian consumer perception of the Wii having a dramatically reduced entertainment value proposition over a faded technology innovation; Rock Band anyone?"
What this price cut is supposed to remedy we don’t know; we strongly doubt that Natal and Arc will be competing on a price level. These new devices will be priced at rather premium rates and appealing to quite different markets. It seems the Wii will soon lose what little competitive edge it still holds.

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