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Pachter: Nintendo Should Unbundle  Wii Sports , Offer $199 Hardware?
Pachter: Nintendo Should Unbundle Wii Sports, Offer $199 Hardware?
January 30, 2008 | By Staff

January 30, 2008 | By Staff
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    6 comments
More: Console/PC



As part of an in-depth Gamasutra feature analyzing Wii prospects in 2008, Wedbush Morgan's Michael Pachter has suggested a $199 Wii without Wii Sports would give Nintendo its best chance of success this year.

While the full feature asks the analysts from The SimExchange, Wedbush Morgan, and Screen Digest multiple questions about the 'Wii Seal Of Quality' and prospects for 2008, Pachter's response concentrated on the Wii's 2008 chances.

In particular, the analyst commented of initial possibilities:

"The console has a price advantage over the Xbox 360 and PS3 that can be maintained if Nintendo chooses to un-bundle Wii Sports from the console.

I think that if Nintendo were to do so and cut the price to $199, it would still sell a piece of Nintendo software to 80% of new Wii purchasers, and would end up effectively lowering revenues per console by only around $10. At that price point, the Wii should be strong again in 2009."


Continuing, Pachter added pointedly of the longer-term prospects for Nintendo's current market-leading console:

"The long-term health of the Wii should not be impacted until Wii households decide to buy one of the other consoles as a second console.

Because of the high-definition video features offered by the Xbox 360 and PS3, those consoles are more likely to end up in the living room, which could relegate the Wii to the playroom. If the Wii is not at the center of the home entertainment system, software sales could suffer as a result."


The full Gamasutra feature on the subject asks SimExchange, Wedbush Morgan, and Screen Digest analysts both about the prospects for Nintendo's Wii in 2008, and whether Nintendo should enforce more stringent quality standards for the current flood of third-party titles.


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Comments


Henrique Olifiers
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Anyone who has seen the effect Wii Sports have on casual players getting in touch with the platform for the first time knows how powerful it is. This package is probably the best viral marketing tool to hit the game industry in years you play it, you want it. Suggesting it to be dropped to keep a price edge seems nave, especially with the strong sales seen so far.



In my opinion, the way to go for Nintendo is to quickly establish the symbiosis between the Wii and the DS. Considering the size of the DS platform, this could prove to be a winner to channel more players to the Wii.

Brian Burwell
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Wasn't Wii Sport developed to showcase gameplay of the Wii before its launch? That makes the game cost next to nothing, to include with the Wii. So dropping the price by $50 and not including Wii Sports would result in revenue about $50 lower and some of the lure of the Wii is lost because you don't get the game.

Steve Lansing
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Brian, I think what he (Michael Pachter) means is that without a game, they'll be forced to buy a game - so their net purchase is still $250 - but with a game they want. Nintendo takes a slight hit on the profit (someone's making money on the extra game) but more people are inclined to spend $250 and get a wii+[insert awesome game] vs $250 for a wii+sports.



However, that being said, I agree with Henrique - Wii sports is a truely good bundle and everyone's played it. Not only do people viraly play elsewhere then buy it for themselves, but it lays down a common bond across all wii owners - and a high quality, multiplayer one at that.



I don't think Nintendo has anything to worry about, as 3rd party developers become craftier and more experienced, quality will rise - just as it seemed to do with the DS. Anyone remember those DS launch games? Ugh.



I do agree with Michael's last comments in the article - they'll likely come out with a new iteration of the wii - likely a Wii-HD as they will need to compete with people looking down on 480p. The end of the year 08-09 (2-3 year mark) is great timing - that's about how long almost any nintendo hardware lasts before an upgrade or drop in price. (GB, GBA, DS, GC)

Benjamin Hoyt
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Has there been some sort of dramatic drop-off in Wii sales that I haven't heard about? Last time I checked, they couldn't keep the damn thing on store shelves at the current price. Pachter ought to be arguing for a price increase.



If, at some point in the future, Wii sales seem to be suffering due to price competition, and they want to maintain a price advantage, they should just cut the price. The console has been on the market now for 2 holiday seasons without a price cut and they were making money on it when it launched. I'd bet good money that they could EASILY cut price whenever they feel the need and continue to make a healthy profit.



If they're concerned about losing a software sale by including it, then offer bundles and/or some sort of incentive to buy software ($10 of any 2nd game at the time of purchase). As others here have pointed out, Wii Sports has huge perceived value, especially relative to its actual marginal cost. Removing Wii Sports might force new buyers to purchase a game when they buy the system, but it costs Nintendo the viral/evangelist benefit that Wii Sports offers once the system gets home...

Isaac Lanier
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Well I see no reason for Nintendo to unbundle the free game. Until I get me a Wii or go to a store and they have some in stock like say 360 or ps3 then yes. Right now the only thing that will benefit is maybe the add-ons. the gun, wit fit borad, etc. The batch of included games are great for learning the system and company over trying something new. Boxing and bowling alone. What needs to happen is companies putting forth the 2-3 year DESIGN, and development time for the Wii and then 3rd parties will enjoy success on the system. Can't remember the specs but if companies are still making games for the ps2!!!!! They should be spending that time making a full blown Wii game, or XBLA using xna. Not some project that started here and yea lets put it on the Wii. The Question after the project start is "How are we going port this off of the Wii?"

Thank you drive through.

Howard Wen
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Pachter has always been very bullish on the PS3 (and he predicted way back that Blu-ray would win out). So it was quite interesting to hear his prediction of the $199 Wii option.



I take what he meant by that is that this isn't something Nintendo should or needs to do right now. But it's an ace up their sleeve they can pull out in another year or so (in a market in which they've met most consumer demand for the Wii), in order to maintain the Wii's dominance. They could drop Wii Sports and a nunchuck, and sell only the console and one Wiimote for $199 or less in order to snag remaining gamers who were never totally swayed by the hoopla of Wii Sports. For $199 or less, the Wii then becomes a "it's so cheap, why not?" purchase.



And consider this also: It would be a very cheap yet usable Internet-capable console. Maybe there would be lots of people who would buy it just for casual Websurfing, or fans of classic games who would buy and download their favorite games from the Wii store. It is possible to derive substantial use and enjoyment from the Wii without ever buying a game disc.



So when the novelty of Wii Sports inevitably fades, Nintendo has this option to keep the appeal of the Wii strong: Selling it barebones for a can't beat price.


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