I know you’ve been busy with a lot of e-mails and probably a lot about this issue. So I will be brief.
Rumor says Nintendo will drop the Wii price in October. Actually, I partially believe in this because Iwata promised investors a forecast of Wii sales that, until now, seems very hard to achieve.
I think Nintendo is going a little against the Blue Ocean strategy and maybe feeling forced to accept the ‘standard’ business model – after all, they are a public company and Yamauchi is not in charge anymore (if he was, he would just tell everyone to f**, lol).
What troubles me is that in just dropping Wii price, Nintendo would be abandoning everything they build in the last 5 years. My bet, and hope, is that they change the Wii package – new color, Wii Sports Resort with Motion Plus, anything.
But just fight with price is something I didn’t expect Nintendo would be doing.
Price/Packages changes are coming, eventually. What is your opinion on the ways Nintendo should do this?
Nintendo already abandoned everything that made the DS and Wii great when it adopted the mission of ‘user generated content’. While they might be retreating from that direction now, the damage done is incalculable. When everyone buying the Wii in the potential for Nintendo to marry the new way of playing to new content, Nintendo showing they had no interest at all in creating content blew up any sense of ‘potential’.
What is there for the customer to look forward to the Wii now? Aside from sequels to existing Nintendo series (Mario, Zelda, Metroid) as well as ‘new’ Nintendo series (Wii Sports, Wii Fit), there is Yet Even More Controllers to buy.
There is no point to customers buying Nintendo interfaces (Wii-mote, sensors, whatever) if Nintendo is not interested in fleshing out potential for them. The drive behind the Wii phenomenon was largely based on potential of what the system could do. Since customers are aware that Nintendo has no intention on shaping or fulfilling on that potential, the “Wii Madness” has died.
It is one of the most high profile trainwrecks of a business decision of Nintendo that is up there with the Virtual Boy. Once a phenomenon is destroyed, you cannot get it back. This has given the other console companies a major opening for customers desiring content especially Sony in Japan.
What is scary is that I seem to be the only one on the Internet talking about Nintendo’s zig zag into ‘user generated content’ and its “Wii Madness” destroying effect. Everyone else is still talking ‘casual gamez’. Even with Iwata and Miyamoto, very high profile guys at Nintendo, talking about ‘user generated content’ and even to the investors, no one in the press is reporting on it. ‘User Generated Content’ was the great crusade of the “Game Industry” back when Little Big Planet was launching and everyone was hot to trot that it would ‘change everything’. Well, nothing has been changed. And I think stories on ‘User Generated Content’ failing (which, oddly, we are not hearing any stories about) is simply not what the “Game Industry” wants to hear.
People have complained about game journalism, but the real problem is the business side of game journalism. Aside from their ‘analysis’ which is nothing more than ‘percent-syndrome’ (“accessories are up three percent!” “third party software is down eight percent”), the ‘analysts’ that are being quoted have no business being quoted at all. And it is not because they are consistently “wrong”.
Video-game analysts are moonlighting. It is not their job to talk to reporters in the first place and the comments they make is not what they do for their living. However, the comments appear to be designed to influence opinion and the “industry” behind the companies they are moonlighting.
For example, it is not *correct* for a console company to go bankrupt putting out a product in any financial context. However, the analysts will pressure for the console company to subsidize third party companies in taking the blow to the cost purely out of interest to that third party company. No one in their right mind would say it is good for a console company to keep losing money. For an example of this, look at this:
Which brings us to Nintendo, whose Wii has not budged a penny since its November 2006 launch nearly three years ago. After blistering sales in the first quarter of this year, the retail temperature for the system has cooled significantly and its year-to-date sales are down 21% over the same period last year.
It is always percentages. ‘Percentage-syndrome’ I call it. Percentages aren’t useful because they hide the real numbers.
Since the Wii was never going to keep selling out forever, it was going to come down. Since it has come down, everyone seems to insert their ‘favorite reason’ as to why the system is no longer selling out.
What is hilarious is that no one has done any analysis on to why Wii had been selling out for years in the first place. In order to understand why the demand has dropped, it is best to understand the source of the demand in the first place. But this is never done.
In part, that drop has to be attributed to the truly phenomenal sales the system experienced throughout all of 2008. One could easily take the view that sales of the Wii are now normal, and it bears pointing out that the Wii is still outselling each of the PlayStation 3 and Xbox 360 each month.
Whether Wii outsells PS3 and Xbox 360 or undersell it is absolutely irrelevant to Nintendo’s business mission. The HD Twins are not a standard to judge the Wii toward.
What is not being mentioned, perhaps purposefully, is that Wii sales went up in August than what they were on during July. People expected the Wii to keep dropping. But it went back up. Why? It’s still in the heat of summer, in the slowest part of the market. Could it be because of software released? Could it be because of Wii Sports Resort? (No one is mentioning that because analysts declared Wii Sports Resort a failure last month in shifting hardware.)
However, given the scale of consumer demand for the system at $250, it stands to reason that demand would spike again if the price were dropped.
Except that the Wii isn’t using the standard scale of consumer demand at all. Besides, demand behind console sales comes from the demand of software.
The issue isn’t just moving hardware for hardware’s sake, but the fact that hardware sales drive software. According Mr. Pachter of Wedbush Morgan Securities, Wii software sales were down in August 2009 compared to August 2008 and he expects them to remain down year-on-year through November unless Nintendo drops the price of the Wii.
I bolded the above. The bold is putting the cart before the horse. Only an idiot in this “industry” would say that hardware sales drive software. People buy hardware only to get to the software (or potential software). This is Console Sales 101 type stuff.
Pachter is so vocal about a ‘Wii Price Cut’ because he is representing third party company’s interests. Analysts like Pachter are not being objective, but putting out the interest of the companies they represent. Of course third parties want a Wii price cut. Hell, third parties want all the consoles to be practically free so there would be no barrier between the customer and their games.
Quoting interested sources like these ‘analysts’ is, I believe, the equivalent of a ‘yellow journalism’. Journalists, who are so eager to quote and talk to someone with a title, are being played as a Stradivarius. They don’t realized how used and easily manipulated they are.
As for what Nintendo is going to do, I would used to have said ‘no’. But since their ‘user generated content’ adventure, I have no idea what long term direction they will turn next. Hopefully it will be back toward their E3 2006 mission of spreading gaming to the masses (and spreading gaming to the masses means spreading gaming content to the masses).
Nintendo did make the right reaction with making NSMB Wii. And the direction with Zelda Wii (of marrying the unique features of the Wii to content) is why people bought the Wii in the first place (and is fulfilling that potential).
Nintendo, this latter year, seems to be in a transitional stage from the ‘User Generated Content’ phase. What they are transitioning into, we on the outside can’t tell yet.
Iwata did tell investors recently that there were not many discussions about lowering the Wii price. However, Iwata also told investors he had no interest in making sequels or Wii Sports 2. So based on their recent performance, I have no prediction what Nintendo will do on this subject. There is not enough consistency for a prediction to be made.
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