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UK Wii market price may have to go up News
Wii News by Tom Bramwell
Nintendo's decision to increase the UK trade price of the Wii may result in an unprecedented console price increase for consumers, retailers have told our sister site GamesIndustry.biz.
Yesterday, Nintendo reluctantly announced that it would be raising the trade price by GBP 18 - 20, putting pressure on retail margins.
"I don't think any retailer has got the ability to soak up that sort of margin change," Don McCabe, managing director of UK retailer Chips, told GamesIndustry.biz.
"I think I saw one story that said the supermarkets wouldn't be passing the price point on but I think they will. I don't think any retailer can take that sort of squeeze."
ShopTo.net's Igor Cipolletta said the move would leave "no margin for us at all".
The two men voiced differing views on Nintendo's justification. The platform holder blamed currency fluctuations for the increased price - the company traditionally won't sell its consoles as loss-leaders, as Sony and Microsoft do.
"I can see their reasons why and there are reasons which are perfectly valid in today's market place - the Pound has been dropping against the Euro for a while now and it shows no sign of bouncing back," McCabe said, suggesting Nintendo should have chosen a GBP 199 price point originally rather than the current GBP 179.
But Cipolletta disagreed. "If you look at the history, the pound was higher [against the Euro] and they've been making quite a percentage more of money, so now they can take the loss rather than increase the price."
Meanwhile, Nintendo hasn't ruled out the possibility of software prices rising as well.
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alimokrane
12/03/09 @ 08:47
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"But Cipolletta disagreed. "If you look at the history, the pound was higher [against the Euro] and they've been making quite a percentage more of money, so now they can take the loss rather than increase the price."
Ah Someone with a brain. |
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>/ Waits for Smelly
Well as i said in the other thread - this is simple math: When the wii launched in dec 1st 2006: 1 pound = 228.284 yen Today: 1 pound = 135.44 yen And this is just the start! If things keep going the way they are, we'll go down to 50 to 100 yen in no time at all... So you'd want to run a company where the product is selling for 70 quid less than what you put it on the market for? If so, remind me never to go into business with you! Sometimes I wonder about gamers.. If it was a television which had gone up in price.. none of this fanboy shit.. that's just the way it is... This is the way GLOBAL economics work.. But gamers seem to be too stupid to figure this out. - It always AMAZES me how whenever a new games chonsole gets released they compare the UK price to the US one and declare the uk is being "ripped off". |
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>waits for Sony to follow
Wont happen.. Sony have priced the machine high in the first place, and kept it up high.. So they dont need to go through this PR disaster of idiots who dont understand the UK pound is fucked trying to figure out why they need to pay more for stuff... I cant see sony needing to lower the price of the ps3.. The UK price was sky high to start with. |
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Oh.. im sorry.. i forgot that it's now the "done thing" to slag off nintendo on game forums.. I want to "Fit in" so i'll post something like:
"Wii sucks! It's not even in hi-def.. just like halo 3 wasnt.. and it only has on rails shooters.. Just like my 360 only has grey and brown fps games which force me along corridors.. like a on rail shooter.. and the highest rated game ever - mario galaxy sucks too! So therefor it's not fair its selling more than the machine i bought.. boo fucking hoo" |
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antony_williams
12/03/09 @ 09:25
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Heh you kinda blew it with the last post Smelly but your first made perfect sense and was well put
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@smelly
Whilst Nintendo have no control over global market conditions, they are not entirely with out blame for this price increase. Firstly electronic components should drop in price as they increase in age which should decrease the manufacturing costs. This clearly hasn't happend which most likely means Nintendo have made some very bad desicions in this area (like MS did last generation). Secondly there are steps you can take to minimise the effects of changes in global markets, for example use more than one factory, ideally at least one in each major territory. That way if the value of one territory's currency drops or rises your costs will drop and rise roughly in line. It also means that you are less likley to have your super selling product out of stock. So whilst you may deride your fellow forumites for not having a good understanding of global economics, you should perhaps save some of your bile for your beloved Nintendo that don't seem to either (or at least made all their descions regarding the Wii on a purely short-term basis). |
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No idea why anyone is defending Nintendo. In a global recession there isn't a single company that is somehow maintaining it's profit levels. The fact that Nintendo are arrogant enough to try price increases is amazing. Prices are actually falling across the board to try to get consumers to spend money. Are they trying reverse psychology or something?
Are they next going to announce that the price of the DS and DSi needs to rise in england too? When the exchange rates are good, we see zero benefits and when they are bad we get price increases. If I didn't already own a Wii I would have told Nintendo to frak right off! |
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Britesparc
12/03/09 @ 10:13
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Considering how cheap it already is, I don't think a minor Wii price increase is a big deal, but given how long it's been out and all all that, I'm surprised Nintendo haven't made manufacture and distribution significantly cheaper to offset the weaker pound...
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"If you look at the history, the pound was higher [against the Euro] and they've been making quite a percentage more of money, so now they can take the loss rather than increase the price."
A grain of truth to that..but not that much.Looking at the history of the pound/euro- the Wii was around £11 more in the UK for the first year. Since April 08 we've be paying around £17 less than the rest Europe Since December we've been paying around £45 less than the rest of Europe. I do think it's a bad move to put the price up...but £45 less per unit is a big hit.
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most recently on 12/03/09 @ 10:16
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@Penhalion: "No idea why anyone is defending Nintendo. In a global recession there isn't a single company that is somehow maintaining it's profit levels. The fact that Nintendo are arrogant enough to try price increases is amazing. Prices are actually falling across the board to try to get consumers to spend money. Are they trying reverse psychology or something? "
There isn't a single company? Prices falling across the board? You are not a photographer, are you? No companies increase their prices? Same thing is happening with Japanese camera manufacturers (Canon, Nikon, Sigma, ...). Camera body and lens prices are currently significantly increasing for the same reasons. You guys can rant all you want but it's a fact now that Japanese manufacturers are hurting and increasing prices, and not just for game consoles. Gamers can have a blinkered view of economic realities... Wendelius |
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"Prices are actually falling across the board to try to get consumers to spend money"
Is not true. It didn't take a whole lot of research to find the following http://www.ephotozine.com/article/Nikon-... http://www.amateurphotographer.co.uk/new... Prices are crazy at the moment. Even though honda are suffering - they are having to increase their car prices in some markets. |
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canIdoyabombsforya
12/03/09 @ 10:33
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Woolworths and Zavvi recently reduced their prices so why can't Nintendo...err hold on.
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Nintendo really are taking the piss even taking global currency changes into account. The Wii IS practically a Gamecube in a different shape box (this is not a fanbois statement - i have programmed for the hardware) and Nintendo were selling those for 99 pounds in the end. So, if it's right that Nintendo don't make losses on hardware then unless the Wii Remotes are made of diamonds and gold they've been making huge profits on each Wii since launch and they should still be able to handle these currency fluctuations with ease!
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This is the first time I've ever heard of a console manufacturer actually INCREASING the price of their hardware over 2 years after its launch. The simple fact is that Nintendo are arrogantly trying to maintain their enormous profit margins from Wii console sales regardless of the state of the economy. True, there are electronics products out there which have seen price increases, but Nikon SLR cameras aren't exactly selling in anything like the volumes that the Wii is, are they? Nintendo could make a few quid on every Wii and they'd still be raking it in but they'd rather keep the profit level the same and pass the extra market expense onto the consumer knowing full well that people will STILL buy a Wii despite it being overpriced to begin with (for the record, I've had a Wii since launch). I mean, I have no doubt that a Wii will cost less to manufacture now than it did back in 2006 so there really is no reason for this price increase at all.
Hopefully, this move will backfire on them. You don't see Microsoft or Sony increasing their console prices despite the fact that, unlike Nintendo, neither make a profit on them to begin with. |
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"Considering how cheap it already is, I don't think a minor Wii price increase is a big deal, but given how long it's been out and all all that, I'm surprised Nintendo haven't made manufacture and distribution significantly cheaper to offset the weaker pound..."
Cheap? You what? I love Nintendo, I love my Wii. I got it on the release day. It was a ripoff. £180 was too much for the Wii two years ago, and it's even more too mucher now, regardless of the shitty pound. |
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35% depreciation against the Yen in a year, I'd say an £18 increase is pretty generous. You kiddies better get used to imported goods becoming more expensive and higher taxes. There are a hell of a lot of other goods that have seen rises of over 10% in the last year including my food bill, energy bill, monthly bus ticket, cineworld pass ... this is what happens when you live in a bankrupt nation that produces fuck all wealth.
And remember Nintendo is a moderately run company that makes a large chunk of it's revenue from hardware. You can't compare it to Microsoft, who have followed an 'expand and achieve market share at all costs' strategy, in fact there's hardly any other companies in the world that could afford to do this. |
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canIdoyabombsforya
12/03/09 @ 11:25
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@AgentCool
I'm looking for links about Nintendo's manufacture costs, prices of components are of particualr interest, can you post them please? IIRC the PS3 was about $800 dollars to build, so presumably the cost of electronics has come down in that too? |
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dubdivision
12/03/09 @ 11:34
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I can't stand nintendo ( I did love my snes though)
and yet I have a Wii with about 10 games, 2 wiimotes, 2 nunchucks, Wii fit (never use) and am about to go get hotd overkill. I must need my head looking at. Hopefully they will increase the price by loads so that I can sell mine for a profit and finally feel good about my Wii purchase. |
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Can you see Sony and MS doing the same thing? I'd seriously doubt it. Nintendo know they'll sell them at an increased price so they're just chancing the arm. They aren't helping the current crisis much with these tactics. Every other company has to suck it up, but Nintendo once again treat the consumer (and don't doubt this will be passed onto the consumer) with the new lack of respect that has come to be associated with their new grey logo.
The Wii is a ripoff at the minute anyway, I mean seriously, it must be the worst value console in the history of gaming already. Glad I sold mine, they won't be getting any of my money, I'll save that for companies that at least seem to have a little more respect for their consumers. /ends over-reacting
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Can you see Sony and MS doing the same thing? I'd seriously doubt it. Nintendo know they'll sell them at an increased price so they're just chancing the arm. They aren't helping the current crisis much with these tactics. Every other company has to suck it up
Gaming is the core business of Nintendo, it’s pretty much all the do. Microsoft (and to a lesser extent – Sony) subsidise their gaming divisions. No other company in the world could have afforded the strategy employed by Microsoft to bring the Xbox brand to the market. As has been pointed out time and time again, every other company is not ‘sucking it up’, everything from cameras, to cars, white goods, home entertainment etc are all experiencing increases, despite the general view that everything at retail is cheaper. |
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canIdoyabombsforya
12/03/09 @ 12:40
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$199.00 (NINTENDO ENTERTAINMENT SYSTEM) from 1985 is worth today:
$341.97 using the GDP deflator $420.52 using the value of consumer bundle $379.17 using the unskilled wage $514.62 using the nominal GDP per capita $651.07 using the relative share of GDP I still think we're getting a good f#cking deal. Were kids such whiny brats in those days? |
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canIdoyabombsforya
12/03/09 @ 12:57
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"Nintendo Wii Costs About $160 to Manufacture
In December 2006" And they sold at $249, which is only $89 left to pay off the R&D costs, marketing and logistics etc etc. Sounds like quite a fair business risk to me. A business risk that anyone here could have taken on. Look at the Pandora console for example. Also note that Nintendo have recently invested in Video gaming R&D, as opposed to ripping of other peoples ideas and simply asking Nvidia and Ati for their best GPU to sell us the same FPS games only prettier than before. |
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Well the price of all electronic products is set to rise due to the extremely weak pound so this is just the start of it all really. However Ninty must have a fair amount of breathing space with the fact that they have never sold the Wii for a loss and also never reduced the price of it so it is quite surprising really.
If anyone is planning a major electronic purchase then do it now as over the next few months the price of all electronic products is set to rise. |
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canIdoyabombsforya
12/03/09 @ 17:40
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DrDamn
" All these arguments defending Nintendo would hold if they reduced prices when the pound was growing in strength. Did they? Did they f***. " Another cry baby Nintendo have launched consoles cheaper than ever as the YEN has weakened. We've never had it so good with electronic goods, and now the spoilt kiddies think they're owed a f#cking living. Hopefully the next generation will launch at £900 and we can have some peace and quiet. |
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The fact that Nintendo are arrogant enough to try price increases is amazing. Prices are actually falling across the board to try to get consumers to spend money.
I posted this in the forum, but thought it was worth sharing again... Sony Price Increase Nikon Price Increase Sigma Price Increase Canon Price Increase Panasonic Price Increase Ford Price Increase Vauxhall Price Increase Nokia Price Increase |
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cyber_nicco
12/03/09 @ 18:10
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What really irks me is that they are raising the cost to distributors, but not the suggested retail price. Making it somehow look no more expensive to the consumer, even though some retailers will be forced to resort to selling it above msrp or as part of big bundles.
Maybe the shops will have to resort to "steering" consumers to a different console just to make money. |
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