Price of Wii Goes Up...

[Reddaye]

The Nintendo Wii could be the first console in history that will not only have held its launch price for over two years, but actually increase it.

On Wednesday news emerged that Nintendo will raise the Wii's trade price by around £19 per unit. All eyes are now on the retailers, who will either absorb Nintendo's price hike or spread the burden to customers.

Ed Barton, Games Analyst for Screen Digest, believes that regardless of how retailers will react, Nintendo's reasoning for the price hike is "completely sound".

"If you look at the Yen exchange rate over the Pound in the previous year," he says, "it has changed by thirty to forty percent."

"We looked closely at Nintendo's figures in the last quarter and this exchange rate has absolutely murdered their operating profit."

Barton adds that the raised trade price of the Wii is not only "perfectly justified", but could perhaps be a sign of things to come: "When you look at all the data and financials it wouldn't surprise me if Nintendo raised the price of Wii Fit. The margin on games hardware and peripherals is a serious problem right now."

The games industry has lived through decades and eras, but this is the first time it has faced a deep rupture in the global financial market - one which no one completely knows how many industries it has stretched through, nor how long it will last.

The biggest question right now is standing at the shop floors of the retailers. Edge has contacted all the UK's major specialist and non-specialist outlets affected by the matter, to find out how each will address the Wii's higher trade price. So far the majority have remained silent, with some - quite understandably - admitting they are "still digesting" the announcement and "need more time" to evaluate how to deal with it.

Barton, however, believes that there's a chance the specialist and non-specialist retail outlets will approach the issue differently.

"I suspect that non-specialists, in particular the large supermarkets, will just swallow the margin head, simply to get the footfall."

Yet if the superstores hold the price of the Wii, a big question looms over whether the specialist retail outlets can follow suit. Barton suggests that the UK's superstores are "financially better positioned" to take a hit, yet the specialist chains may not be able to absorb the price hike.

"I think that one thing we need to keep in mind is the practicalities. I mean, games consoles are relatively large items, these aren't the cheapest things to be keeping in store rooms and moving around the country. So I think we're going to see a great deal of pressure on specialists."

"For all the UK retail industry, an £18-19 climb in trade prices will be enough to wipe out the margins completely," Barton adds. "System sales are never usually the best thing for specialist retailers anyway, in terms of margins, but at least the retailer has that icing where customers tend to pick up other products with the consoles."

Yet if the superstores sell the Wii at a markedly lower price than its competition, the specialist retail outlets may be about to lose a key loss-leader.

Computer & Videogames

So, why aren't Sony and Microsoft raising prices because of the economic situation? Aren't Nintendo using last generation technology to build the Wii? You'd almost think that would make it less of a problem for them.

[Matt]

Aren't Sony making almost nothing on the sale of PS3s?

Edit: And Microsoft is US-based so it's not affected by the Yen/Pound exchange rate.

Edited March 14, 2009 by Footjob Fever

[Reddaye]

Aren't Sony making almost nothing on the sale of PS3s?

Edit: And Microsoft is US-based so it's not affected by the Yen/Pound exchange rate.

I'm not sure what Sony is making on PS3s now to be honest.

Good point about Microsoft, should have thought of that myself.

EDIT: Probably should have mentioned this was a UK thing in the topic title.

Edited March 14, 2009 by Drifter_2000

[MalaCloudy Black]

Wii's got almost double the sales of the 360 and the PS3 worldwide. The Wii's shipped 44 million units, the 360 28 million units, and the PS3 21 million units. These numbers are all as of December 31st.

http://en.wikipedia.org/wiki/History_of_vi...Sales_standings

[Captain Kirk]

Total cop-out more likely a reason to make more money.

[Cactus Drags]

You know what Nintendo? Fuck you even more.

[Farmer Reil]

Yeah, lets raise the prices in the one market where everything is already more expensive than almost everywhere else in the world. Cheers, Nintendo.

[Crybaby Bunting]

Couldn't this just be one of those things which forces everyone to go and buy one now rather than later? It seems the only time in which Nintendo can really sell their consoles (see Christmas)

[Herr Matzat]

Yeah, lets raise the prices in the one market where everything is already more expensive than almost everywhere else in the world. Cheers, Nintendo.

Actualy it´s not. The PS3 is about 100€ Cheaper in England (and this dos not even include the amazon offer with gamebundel, free hdmi cable and an extra game for 10bp, thats like 350 Euro including shipping, in Germany this would almost be at 500€). Xbox 360 Arcade 35€, Xbox 360 6gb around 60-70€ cheaper and the Wii around 60-70€ Cheaper aswell. (all german prices, i hear netherland and italy are cheaper than german prices aswell)

Prittymuch eerybody that knows this and is capebell of doing it (creditcard, language bariere) only buys from the UK because the pount is such a joke right now.

Edited March 15, 2009 by Michael Matzat on a Plane

[ChrisSteeleAteMyHamster]

To be fair, the yen is REALLY suffering cos of it's strength.

To put it in perspective....I earn 3,000,000 yen a year in my job which, when I moved out, equated to 15,000 pounds a year.

Last month due to the exchange rate I earnt 25,000 pounds a year.

Still, Nintendo have made enough sales on this console that it's a bit cheeky, especially as they're flogging it off dirt cheap in Japan right now in some places.