Author Topic: Should Nintendo lower 3DS prices because of the Vita? (Read 39779 times)

nickmitch · « **Reply #75 on:** July 28, 2011, 12:08:34 PM »

I think being on top with Wii and DS put Iwata under a lot of pressure from investors to boost the sales numbers, even if it doesn't directly turn in to an increased net income.

BlackNMild2k1 · « **Reply #76 on:** July 28, 2011, 12:31:43 PM »

I was right and wrong at the same time. I really didn't expect a price drop until after the holiday season. But Nintendo was far overcharging for the 3DS based on both demand and actual cost.
The fact that at the moment it has a very weak line-up of SSFIV & OoT3D only make it more obvious that a price drop was needed.

This price drop is more than I expected and much sooner than expected, but atleast they did do the value added bundle too like I figured they would.... just waaaay more value added than expected.

You gotta love Nintendo sometimes. They always find a way to surprise you.
But I'm really happy they got the message and came to their senses before it was too late.

noname2200 · « **Reply #77 on:** July 28, 2011, 12:41:36 PM »

It's a good move, in light of anemic sales and a software drought that's going to last for several more months, but isn't this the first time that Nintendo sold hardware at a loss?

oohhboy · « **Reply #78 on:** July 28, 2011, 12:47:15 PM »

Read the rest of the thread, Nintendo isn't selling at a loss, even at this price. It a price more in line to what they normally do which is usually at cost or slightly above it. It is expected they are still making some profit, but this is the price it should have come out at or a hair lower.

alegoicoe · « **Reply #79 on:** July 28, 2011, 12:53:00 PM »

I think nintendo just made a smart move to lower the 3ds price to 169.99 to fight off Vita's price which am sure took everyone by surprise, am sure with this move the adoption rate of the 3ds will increment a lot and with the near future releases of mario 3ds and mario kart along with OoT which is already out, is a no brainer for every nintendo and non nintendo fan to get a 3DS.

BlackNMild2k1 · « **Reply #80 on:** July 28, 2011, 12:59:17 PM »

Nintendo is likely making ~$20 profit at this price point. Maybe a little more, maybe a little less, but the estimated cost of parts and manufacturing is a little over $100.
This price drop is definitely more in line with where the system should have launched ($199 would have been acceptable at launch) and is actually a very nice apology to consumers on both sides of the fence.

I plan on straddling the fence and benefiting from both sides. (20 free games and the price drop).

Ceric · « **Reply #81 on:** July 28, 2011, 01:01:59 PM »

$20 Profit is low for hardware for them.

noname2200 · « **Reply #82 on:** July 28, 2011, 01:05:06 PM »

Quote from: oohhboy on July 28, 2011, 12:47:15 PM

Read the rest of the thread, Nintendo isn't selling at a loss, even at this price. It a price more in line to what they normally do which is usually at cost or slightly above it. It is expected they are still making some profit, but this is the price it should have come out at or a hair lower.

Sorry, I'm not seeing what you're referring to. My information about the loss comes from Bloomberg Japan (http://www.andriasang.com/e/blog/2011/07/29/3ds_losses/?utm_medium=twitter&utm_source=twitterfeed).

Ceric · « **Reply #83 on:** July 28, 2011, 01:17:29 PM »

Quote from: noname2200 on July 28, 2011, 01:05:06 PM

Quote from: oohhboy on July 28, 2011, 12:47:15 PM
Read the rest of the thread, Nintendo isn't selling at a loss, even at this price. It a price more in line to what they normally do which is usually at cost or slightly above it. It is expected they are still making some profit, but this is the price it should have come out at or a hair lower.

Sorry, I'm not seeing what you're referring to. My information about the loss comes from Bloomberg Japan (http://www.andriasang.com/e/blog/2011/07/29/3ds_losses/?utm_medium=twitter&utm_source=twitterfeed).

That is weird for Nintendo to be overly aggressive cutting something. A cut to $200 would have been big.

BlackNMild2k1 · « **Reply #84 on:** July 28, 2011, 01:32:15 PM »

Quote from: noname2200 on July 28, 2011, 01:05:06 PM

Quote from: oohhboy on July 28, 2011, 12:47:15 PM
Read the rest of the thread, Nintendo isn't selling at a loss, even at this price. It a price more in line to what they normally do which is usually at cost or slightly above it. It is expected they are still making some profit, but this is the price it should have come out at or a hair lower.

Sorry, I'm not seeing what you're referring to. My information about the loss comes from Bloomberg Japan (http://www.andriasang.com/e/blog/2011/07/29/3ds_losses/?utm_medium=twitter&utm_source=twitterfeed).

page 2 (or you can just read all of my post in this thread, but I'll quote the most relevant one)

Quote from: BlackNMild2k1 on June 22, 2011, 02:07:27 PM

I'm not trying to start another debate, but my ideas were just some minor last-minute things they could have done if they decided they were gonna raise the price based on fanbase enthusiasm and tell us that's what they were gonna do. A little surprise like "Guess what!? We decided to bump the internal flash in addition to the SD card we pack in... but that's not all!! We also added a 3D camera to the inside lid to that you can do 3D video chat with people on your friends list!! Oh you thought we were done!? Nope, we also added that 2nd analog that all you gamers keep crying about!! and all for the same price that we announced a few short months ago!!"
I bet that some of that deflated enthusiasm that they are seeing now could have been minimized even if the majority of it was inevitable because of the price and the lack of games to make most consumers over look it.

And I thought about starting a new thread for this, but I'll just drop it here instead
iSupply 3DS cost vs DSi cost (at release)

click pic for larger image

Estimated cost to manufacture 3DS = $103
Cost to buy 3DS = $250
---------------------------------------
Difference - $147

factor in R&D, shipping & packaging on a per unit basis when multiplyed by the expected sales of 100's of 1000's of units per region per month, and I came up with a generous cost of ~$50.

So that leaves us with a healthy profit margin of ~$100 on 3DS.
factor in the price drop of $80 and that leaves Nintendo with a rough estimate of ~$20 profit margin on 3DS for now, but that number will obviously grow as they manufacturing cost continue to drop.

oohhboy · « **Reply #85 on:** July 28, 2011, 01:33:11 PM »

GameCube was believed to have only made $5 on every unit sold, so it Nintendo has cut is very fine before.

I suspect there has been a mistranslation regarding whether they will be selling the 3DS at an actual loss or whether he is talking about a loss in profit. I would wait for one of our Japanese corespondents to clarify this statement before I concede.

Iwata said in the original article the Bloomberg report is based on

Quote

値下げ後の価格ではハードの販売だけでは赤字になるとした上で「いま手を打っておかないと来年以降の業績に明るいものが見えてこない」と強調した。

GoldenPhoenix · « **Reply #86 on:** July 28, 2011, 02:08:24 PM »

Definately surprised to see such a huge price drop, I worry about the impact of such a drastic cut. IN regards to profit/loss per system used, I'll take Iwata's word in a conference over a 3rd party site, if Iwata was lieing outright that would hurt Nintendo big time, especially to the shareholders unless of course it is a mistranslation.

Anyway, glad Nintendo is rectifying it somewhat with early adopters, I don't recall something like that happened before where a company does something relatively major for early adopters when a price drop hits.

Chozo Ghost · « **Reply #87 on:** July 28, 2011, 02:25:19 PM »

All of those who said Nintendo wasn't going to drop the price anytime soon can all eat crow.

I knew this was going to happen, but I have to say I am really shocked by the severity of the cut. That took even me by surprise.

BlackNMild2k1 · « **Reply #88 on:** July 28, 2011, 02:34:15 PM »

Quote from: oohhboy on July 28, 2011, 01:33:11 PM

Iwata said in the original article the Bloomberg report is based on
Quote
値下げ後の価格ではハードの販売だけでは赤字になるとした上で「いま手を打っておかないと来年以降の業績に明るいものが見えてこない」と強調した。

Google Translation: "drastic measures must be considered substantial," said. Price is only after the price of the hard sell and lose money on a "come see the bright and the performance of the next year or you do not hit your hands now,"

Partial Translation: Following the price cut, sales of the hardware will go into the red.

My re-interpretation: Drastic times call for drastic measures and the price drop is a result of poor 3DS sales which will of course lead to loss revenue/profits.

GoldenPhoenix · « **Reply #89 on:** July 28, 2011, 02:35:06 PM »

Quote from: Chozo Ghost on July 28, 2011, 02:25:19 PM

All of those who said Nintendo wasn't going to drop the price anytime soon can all eat crow.

I knew this was going to happen, but I have to say I am really shocked by the severity of the cut. That took even me by surprise.

Kind of like how you've eaten crow multiple times saying Nintendo is doomed? Seriously let's have some maturity here, there are legitimate business reasons to doubt a price drop, especially since the 3DS game lineup has yet to get strong, heck the best game on the system is a pretty straightforward remake of an N64 game. I still worry about the image issues with this and how it hurts the value of the 3DS in the eyes of people with such a massive price drop. No one said Nintendo won't drop the price, people were arguing whether it was a good idea or not, whether it is a sound business choice or not.

gbuell · « **Reply #90 on:** July 28, 2011, 04:20:39 PM »

Quote from: BlackNMild2k1 on July 28, 2011, 01:32:15 PM

factor in R&D, shipping & packaging on a per unit basis when multiplyed by the expected sales of 100's of 1000's of units per region per month, and I came up with a generous cost of ~$50.

Can you enlighten us with the calculations you used to come up with that?

alegoicoe · « **Reply #91 on:** July 28, 2011, 04:47:29 PM »

People, if you remember the original DS fat didnt do that well in the first year and the launch line up was lackluster as well, DS sell started picking up fast after the DS Lite went into market and nintendo started releasing games, i think although its not the same situation, they do have similarities and i think this price cut is the first step in the right direction for nintendo to start improving 3DS sells before Xmas comes around.

Mop it up · « **Reply #92 on:** July 28, 2011, 06:26:50 PM »

I still think Nintendo should have held off until after the holidays before dropping the price. But that's because I think that the lack of compelling software was the biggest reason for slow 3DS sales rather than the price. Once games like Super Mario 3D hit then it would have taken off. But now we'll never know if that's the case since the price will be a lot lower at that point.

Nintendo's definitely in a tough spot and neither option is really desirable. Though if I'm right about the 3DS needing software, then the possible negative image from cutting the price so heftily shouldn't be much of a factor. People are going to buy a 3DS if it has the games they want to play.

GoldenPhoenix · « **Reply #93 on:** July 28, 2011, 10:43:33 PM »

Quote from: Mop it up on July 28, 2011, 06:26:50 PM

I still think Nintendo should have held off until after the holidays before dropping the price. But that's because I think that the lack of compelling software was the biggest reason for slow 3DS sales rather than the price. Once games like Super Mario 3D hit then it would have taken off. But now we'll never know if that's the case since the price will be a lot lower at that point.

Nintendo's definitely in a tough spot and neither option is really desirable. Though if I'm right about the 3DS needing software, then the possible negative image from cutting the price so heftily shouldn't be much of a factor. People are going to buy a 3DS if it has the games they want to play.

Hope it doesn't adversely affect the sales of 3DS. Such a drastic price drop reminds me of Nintendo's first 3D system, Virtual Boy, they cut the price drastically on that as well within a few months. Kind of eery how the only two systems they had dramatic price drops for are 3D systems, but I still think 3DS will be fine once it gets a decent lineup of quality NEW games aka not remakes.

It still remains to be seen if this was a good business move or not. I still want an official statement in regards to profit or loss on each system they sell.

Chozo Ghost · « **Reply #94 on:** July 28, 2011, 11:54:50 PM »

I think Nintendo did this because the 3DS hasn't been exactly flying off shelves or experiencing shortages or setting any sales records like they probably had hoped it would. With this new price point I'm sure it will do much better sales wise.

alegoicoe · « **Reply #95 on:** July 29, 2011, 12:06:47 AM »

Quote from: GoldenPhoenix on July 28, 2011, 10:43:33 PM

Quote from: Mop it up on July 28, 2011, 06:26:50 PM
I still think Nintendo should have held off until after the holidays before dropping the price. But that's because I think that the lack of compelling software was the biggest reason for slow 3DS sales rather than the price. Once games like Super Mario 3D hit then it would have taken off. But now we'll never know if that's the case since the price will be a lot lower at that point.

Nintendo's definitely in a tough spot and neither option is really desirable. Though if I'm right about the 3DS needing software, then the possible negative image from cutting the price so heftily shouldn't be much of a factor. People are going to buy a 3DS if it has the games they want to play.

Hope it doesn't adversely affect the sales of 3DS. Such a drastic price drop reminds me of Nintendo's first 3D system, Virtual Boy, they cut the price drastically on that as well within a few months. Kind of eery how the only two systems they had dramatic price drops for are 3D systems, but I still think 3DS will be fine once it gets a decent lineup of quality NEW games aka not remakes.

It still remains to be seen if this was a good business move or not. I still want an official statement in regards to profit or loss on each system they sell.

Remember that Virtual Boy messed with people's head and nintendo ended up taking off the market, which the 3ds is something much more different, i think they lowered the price this early for a sale boost before xmas hits and they have their triple A titles in the market.

Adrock · « **Reply #96 on:** July 29, 2011, 12:27:42 AM »

Nothing seemed anywhere near as desperate as dropping Gamecube's price 6 months after launch. It was already the cheapest console and Nintendo made it half the price of the competition despite having more powerful hardware than the market leader. People didn't mind spending more than what Gamecube original cost so the price wasn't the problem. The problem was that outside of the Nintendo faithful, no one gave a **** and it didn't matter what it cost. With 3DS, people seem to want it but the price was too damn high. That's the real difference. With 3DS, they overvalued the hardware. This price drop is likely what Nintendo originally planned to launch at before arrogantly admitting to jacking the price up. We should start seeing 3DS sell the way we all expected it to sell.

People are spelling doom for 3DS but I don't think that's even remotely true. I'm far more worried about Vita. As I've stated before, Nintendo has the luxury of dropping the price. Sony can make no such claim. What sucks especially much for Sony is that not even Nintendo could succeed selling a handheld for $250. The market leader 20+ years running saw the limits of an acceptable price of entry. A good portion of PSP's userbase own the hardware specifically to hack it. If Vita proves less prone to hacking, there goes most of that audience. It's selling at a price that people balked at from the market leader. We're all wowed by the hardware's power, but that doesn't automatically translate into sales. Same thing happened when PSP launched.

Most importantly, will Vita games remain Vita games? I love buying new hardware but Sony burned me big time with these PSP Remaster games. I'm hesitant to even consider buying a Vita since in the back of my mind, I wonder if I'll eventually see ports on home consoles. Sony started porting PSP games to PS2 then continued porting PSP games to PS3. What's to stop them from doing that again?

Back to the original point, I think 3DS is in a great position. I don't see this as desperate because it's finally worth what many felt it's actually worth. Additionally, Nintendo trying to make 3DS a more attractive purchase says more about their faith in the Wii or lack thereof. 3DS is the easier sell since it's new. With only one major release coming up and a new home console announced, Nintendo rightfully sees no future for the Wii and the 3DS has to carry the load until Wii U hits. So no, not desperate, just the natural order of things. Nintendo probably could have waited until next year to drop the price because some big 1st party games are set to launch and ignite sales but the price drop will only help things along and put even more pressure on Sony to figure out some gameplan for Vita.

Mop it up · « **Reply #97 on:** July 29, 2011, 01:37:31 AM »

Quote from: Adrock on July 29, 2011, 12:27:42 AM

Nothing seemed anywhere near as desperate as dropping Gamecube's price 6 months after launch. It was already the cheapest console and Nintendo made it half the price of the competition despite having more powerful hardware than the market leader.

Just a little fact correction, but the price cut to half its launch price wasn't until about two years into its market life. It did drop to $150 before that happened, but I can't find when that first cut happened.

I bought a GameCube at launch and I was fine with the price cut because of Super Smash Brothers Melee, that's the only thing which made me not regret buying a GameCube at launch. Heck, it's the thing that made me not regret buying a GameCube, period. There's nothing like that for me with the 3DS.

TJ Spyke · « **Reply #98 on:** July 29, 2011, 01:52:38 AM »

Nintendo dropped the price of the GameCube to $149.99 on May 21, 2002 (http://www.gamespot.com/news/2866374/e3-2002-nintendo-announces-gamecube-price-drop). This was just after the PlayStation 2 and Xbox were dropped to $199.99, which may have cause Nintendo to drop their price sooner than planned

Mop it up · « **Reply #99 on:** July 29, 2011, 01:58:42 AM »

Ah there it is! I knew it was soon, but not to $100, but I thought it was more like 9 months. 6 months is pretty quick...

News:

Author Topic: Should Nintendo lower 3DS prices because of the Vita? (Read 39779 times)