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UK Wii market price may have to go up

Margin may be too small for GBP 179.

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.