Welp, all I can say is this isn't surprising in the least, although-to be fair-I was *somewhat* expecting a new line of colors before a price drop. Then again, the only times Nintendo did that in the past was when console sales were actually quite desperate, and the Wii has not struggled for sales since it came out tbh.

However, as for what this price cut could mean for the 360 and-in particular-the PS3, I honestly don't feel as though it might do *that* much to stagnate their sales. I could be wrong about that, but it's just a general human instinct I have. The market of 2009 is quite different than that of 2006, 2007 and even 2008; non gamers could be looking for things beyond what the Wii is able to provide, so in their case, I don't think they'd mind paying an extra hundred dollars for a PS3 or 360.

Of course, I speak of non-gamers who may be more into the fair those two consoles provide (there's actually a lot of them) and not the stuff the Wii offers, but even the ones that are more of the Wii's target audience might skid over to the other side, for a multitude of reasons. So again, while the Wii's price cut might cause an issue w/ the other two console's price cuts, I don't think it's going to completely ruin their chances at great sales this holiday season like so many others are thinking.

And I say none of this as an "analyst", just as a gamer who's looking though the glass w/ the "common sense and logic" filters set to 'ON'.

@John: My friends have been customizing their wiis like it was just another PC. In addition, I may be right or wrong here, but they did come out with custom covers, did they? Someone did, whether it was by Nintendo themselves or someone else.

@Cordero

Those custom decals have been around for ages. They were around for the PS2 and consoles before them. I never used them though.

@John

I don't see the Wii price cut hurting the PS3 or 360 sales in any major way. It will however make Microsoft uncomfortable with the Arcade. I am not sure if Microsoft can afford a price drop on the arcade but it does make me wish they dropped the arcade and lowered the Pro's price point to the $200 mark. That would have been a better strategy in the long run.

"I was *somewhat* expecting a new line of colors before a price drop."

Me too.

The price cut, if it's real, doesn't make sense. It doesn't follow the Blue Ocean Strategy, something Nintendo says it's clinging to. Also, at $199.99 the Wii is just above the DSi, and remember, Nintendo RAISED the DS price when it released the DSi.

This is all very strange.

Nintendo responded and denied a price cut:

http://computerandvideogames.com/article.php?id=223308

@ Ephriam Knight
:"It will however make Microsoft uncomfortable with the Arcade."

No.
Most gamers that buy a 360, are not interested in the kind of games that are predominant on the Wii. Unless you are gonna get Halo 3 ODST, Gears, Assasin's Creed, Modern Warfare 2, etc on the Wii, they are not buying Wii's instead of an Arcade.

Ephriam Knight
:" I am not sure if Microsoft can afford a price drop on the arcade but it does make me wish they dropped the arcade "

The Arcade at $200 is a far better deal than a Wii at $200.
The 360 Arcade is at least 10 times as powerful as the Wii, has a much better games line up, can do your instant on 1080P HD streaming of movies, Netflix, is a great Windows Media Center Extender, and do whole host of things the Wii can't do.
The Wii is but a slightly souped up Gamecube. Given that the Gamecube was selling for as low as $99 way back in 2003, the Wii at $200(twice the price of the Gamecube), it's still way overpriced.
However, one can't blame Nintendo for these high prices. There was strong demand for the Wii before after all, and everyone wants to maximmize profits if they can.
Overall, I am going to expect only temporary, middling rise in Wii sales from this price cut. A price cut from $250 to $200 will never have as much effect on sales as the price cut from $400 to $300 which the PS3 had.

@ John Giordano
It's a non-denial denial. Pretty standard practice.
Given the leaked fliers, it's virtually certain they are going to have a price cut by the end of this month.

@ Mike Siciliano
"The price cut, if it's real, doesn't make sense."

Makes sense to me.
In their earnings report at the start of the financial year, Nintendo predicted 25 million Wii sales this fiscal year, just like they sold last year.
However, in the months since then, their Wii sales are down by 50% year on year.
How do you suppose they are going to meet their guidance to investors, when they predicted 25 million sold, and have been running at a rate that will amount to approx 12 million sold for the fiscal year?
To even come close to meeting their own expectations that they gave investors, they are now gonna have to sell at least 25% more than they did last year, for the rest of their fiscal year. That means, they are gonna have to be selling approx 1 million Wii's in Oct, and over 2.5 million Wii's in Nov and Dec. That is just not gonna happen, price cut or not.
They are not gonna be meeting their own expectations. Period.


@ Mike Siciliano:" It doesn't follow the Blue Ocean Strategy, something Nintendo says it's clinging to. "

Blue Ocean huh?
I always thought that was a load of crap.
Nintendo themselves never expected the Wii to be anywhere near as successful as it was.
This is why there were massive shortages for nearly 2 years. They sold a product that caught the public's imagination..for a while.
Now the public's interest in the Wii has gone down considerably, and their rivals are coming up with new products(Natal and the Sony wand), that threaten to out-Wii the Wii.

@Mike Jones - I think interest in the Wii isn't at fever pitch because there hasn't been much compelling software to drive sales. Nintendo admitted this in their shareholders briefing a couple months back. I don't think Microsoft's and Sony's attempts at motion control will effect the Wii at all. If anything, it substantiates the Wii and shows that Nintendo's direction was the right direction all along.

As for the price cut, I only think of it as an unsubstantiated rumor until Nintendo officially makes an announcement. The TRU ad seems to be a promotion, but we'll know soon enough.

Also folks, let's not forget that the Wii is still selling at PS2 levels, even if it's not as dominant as it used to be. It's still outselling the HD consoles, albeit not combined.

@ Ken Masters
:"It's still outselling the HD consoles, albeit not combined"

The Wii is not even outselling the PS3 alone since the PS3 Slim launched at $300, let alone outselling the PS3 and 360 combined.
In every country we have had the figures for since the PS3 Slim launched, the PS3 has vastly outsold the Wii.
In Japan, the PS3 slim sold 150,000 to only 20,000 for the Wii, that is a ratio of over 7:1 of PS3 over the Wii.
In the UK and France, the PS3 oustold the Wii by 3 to 1 after the Slim was launched.
In the US, when NPD figures come out for September (the PS3 Slim launched on September the 1st), the PS3 would have easily outsold the Wii too, unless America is totally different from every other country.

@Kevin Jones: I think Ken is referring to total install base, not sales since Slim launch.

@ Kevin - What you say is true, but I was going by the recently released NPD data. And yes, the PS3 Slim has done very well for Sony. But a hardware redesign/price cut is hardly anything more than a short-term sales spike. Sales will settle down to normal eventually though I expect PS3 to settle higher than it did before the Slim's introduction.

"Blue Ocean huh?
I always thought that was a load of crap."

Oh not this crap. I love it when every genius on Gamasutra attempts to dismiss Harvard and other academic-based studies without any analysis whatsoever. Load of crap huh?

Then explain the Wii's sales over the other systems.

"Nintendo themselves never expected the Wii to be anywhere near as successful as it was.
This is why there were massive shortages for nearly 2 years. They sold a product that caught the public's imagination..for a while."

This is a just a dumb argument. Sales of any kind cannot increase year-over-year exponentially with no cooldown in sight. This is the absurd logic that led to the collapse of the U.S. housing market. Everyone thought housing prices would go up and up continuously. It can't continue forever and it didn't.

I love how you try to say that the public interest in the Wii has gone down, but yet you draw no correlation to software releases. Is is simply coincidence that Wii sales dropped around the release dates of Wii Music and Animal Crossing?

Guess what. Wii sales increased in August this year over July (this year). Wii Sports Resort was released in July. Care to take a wild guess?

"Now the public's interest in the Wii has gone down considerably, and their rivals are coming up with new products(Natal and the Sony wand), that threaten to out-Wii the Wii."

http://malstrom.50webs.com/birdman.html

That is my response to that.

@ Mike Siciliano
:"I love it when every genius on Gamasutra attempts to dismiss Harvard and other academic-based studies without any analysis whatsoever. Load of crap huh?"

Yup.
The fact that "Blue Ocean" is from Harvard doesn't necesssarily make it gospel, nor does it makes it applicable in every business or most businesses.
Last year we had top Wall street firms, stocked full of top Harvard business grads, run into the ground, collapsed and needed the over taxed American tax payer to come rescue them yet again.
You don't have to drink Kool Aid just because it's from Harvard. They have as many crazies and cranks there as anywhere else.

Mike Siciliano":
"Then explain the Wii's sales over the other systems. "

I'll turn that round and say explain the relative failure of the Gamecube from the same Nintendo.
I'll go further and say the PS3 is probably easily going to outsell the Wii every single month in Japan for the rest of this year at least, Wii "Blue Ocean" or not. And it's exactly the same PS3 they have been selling all along, only it's now smaller, and at a lower price. Turns out all the PS3 needed was a lower price, in order for the Japanese to start buying PS3's in volume again.

Mike Siciliano
" Sales of any kind cannot increase year-over-year exponentially with no cooldown in sight. "

# 1. Wii sales never went up exponentially in any year since it was launched. Do you even know what exponential growth is at all?
# 2. The Wii has so far sold approx 50 milion units worldwide. That is like one third the number that the PS2 has sold. So it's not like the Wii has finished selling to the established console base already, let alone the expanded market of old ladies, soccer moms etc that Nintendo keeps bosatin about bringing into gaming.
# 3. Your entire reply is off point. Why? Because my post was about Nintendo being so overwhelmed by intital demand that they were not able to meet demand fully in the US for over 2 years. The point I was making, was that Nintendo was as surprised as anyone by how successeful the Wii turned out to be, so much so that they never made enough intitial provisions to produce as many Wii's as the market demanded, which is all true.

@Mike Siciliano: I read the birdman article and found it very informative. The one thing that stood out in it for me was:

"The Wii is advancing in the same way. Nintendo focused on the downmarket with games such as Wii Sports, Wii Play, and Wii Fit which all became hits. Third parties become confused and made mini-game compilations. After a year, slightly higher tier Nintendo games come out such as Mario Kart Wii and Super Smash Brothers Brawl and Super Mario Galaxy. These games will become bigger hits because of the success of lower tier games such as Wii Sports sending new consumers upstream. Just as the DS has become the darling of hardcore gamers, so too will the Wii as the system moves upstream."

One day at my campus, a guy was outside playing Super Smash Brothers Melee, open for anyone to come and join. He had speakers out and told me that it was a social experiment. As we played, a few more people started to join. Then we started to get a lot of shout outs from people saying 'Woooo, Super Smash Brothers!." I couldn't believe it. It definitely made me smile, mainly because you were seeing guys and girls say this stuff, especially the ones you wouldn't expect. Hell, even at my dorm, girls were using Wii to play games like Wii Sports and Rock Band because it they were fun party games. Nintendo really made a smart business and game move, and I'm sure they'll continue to do so due using smart analysis. In addition, they have a loyalty base big enough to allow them a few mistakes and keep trucking on, much like Blizzard.

"The fact that "Blue Ocean" is from Harvard doesn't necesssarily make it gospel, nor does it makes it applicable in every business or most businesses."

You sidestep the issue. You label Blue Ocean Strategy as a load of crap. But that is a conclusory allegation. I can do the same. I can say your arguments are a load of crap. But conclusions prove nothing. It's reasoning and substantiation that prove a point.

I will trust a book that analyzes specific examples with thorough reasoning rather than a conclusory Gamasutra dweller.

"Let’s return to the example of Cirque du Soleil. Pursuing differentiation and low cost simultaneously lies at the heart of the entertainment experience it created. AT the time of its debut, other circuses focused on benchmarking one another and maximizing their share of already shrinking demand by tweaking traditional circus acts. This included trying to secure more famous clowns and lion tamers, a strategy that raised circuses’ cost structure without substantially altering the circus experience. The result was rising costs without rising revenues, and a downward spiral of overall circus demand.

These efforts were made irrelevant when Cirque du Soleil appeared. Neither an ordinary circus nor a classic theater production, Cirque du Soleil paid no heed to what the competition did. Instead of following the conventional logic of outpacing the competition by offering a better solution to the given problem- creating a circus with even greater fun and thrills- it sought to offer people the fun and thrill of the circus and the intellectual sophistication and artistic richness of the theater at the same time; hence, it redefined the problem, itself. By breaking the market boundaries of theater and circus, Cirque du Soleil gained a new understanding not only of circus customers but also of circus noncustomers: adult theater customers."

Blue Ocean Strategy, pages 14-15

"I'll turn that round and say explain the relative failure of the Gamecube from the same Nintendo."

That doesn't turn anything around, but sure attempts to sidestep the issue once again. Funny thing though, Blue Ocean Strategy does explain the GameCube. Nintendo went red ocean with GameCube. It featured more horsepower, more storage capacity, some online capabilities (limited as they were) and an all around improvement over the "traditional" values present in the Nintendo 64. It was even graphically more powerful than the PS2. Yet it sold less.

"When teaching a complicated subject, say law, math, or Shakespeare, it is not uncommon for students, who are unable to raise themselves up to understand the concepts, to only seek to tear them down. “Law is gay.” “Math is stupid.” “Shakespeare is dumb.” People don’t like to admit they have difficulty understanding something. But education can only begin when one admits he doesn’t understand something. Business is just as complicated and difficult to absorb as law, math, and Shakespeare.

Attacking and trying to tear down the “Blue Ocean Strategy” only reveals the failure of the attacker in understanding it. It is not like any of the attackers of “Blue Ocean Strategy” can coherently quote or explain what Blue Ocean is about in the first place."

- http://seanmalstrom.wordpress.com/2009/09/12/blue-ocean-strategy-stupidity-aboun
ds/

Response to your #1: You complain that the Wii is decreasing in sales based upon percentages compared to previous years, yet you think it's absurd I ask how any product can continuously increase in sales without dropping?

Response to your #2: This is just dumb. PS2 has been out for nine years. Wii has been out for three (almost). Did you really think I would not notice that little fact? What was it that Anita Frazier said about the August 2009 NPD data? Oh yeah, it was this:

"I do think it’s interesting to note that the Wii is still selling at levels comparable to what the PS2 was doing at about this point in its lifecycle."

Response to your #3: Your reply is off point. What does the Wii selling out in stores have to do with anything except showcasing its demand? Nintendo was surprised by its sales? Possibly. It's not easy to predict sales. What do you want to show with that?

@ Mike Siciliano
:"I love how you try to say that the public interest in the Wii has gone down, but yet you draw no correlation to software releases. Is is simply coincidence that Wii sales dropped around the release dates of Wii Music and Animal Crossing?"

Nice try, but no can do.
These are the facts and figures:
Wii Muisc launch: October 2008.
Wii monthly sales in October 2008 : 803,000 a RECORD for console monthly sales outside the Nov/Dec holiday months.

Animal Crossing launch: November 2008
Wii hardware sales in November 2008: 2.04 million another RECORD for November console sales

The Wii then went on to sell a massive 2.15 millionn in December 2008, and a huge 679,200 in Januray 2009.
So far from you assertion that "coincidence that Wii sales dropped around the release dates of Wii Music and Animal Crossing?", the Wii in fact recorded its highest 4 month sales ever, and the highest 4 months sales ever registered by any game console in game console history in America, after Wii Music and Animal Crossing were launched.
Your little theory has been blown out of the water I am afraid.


@ Mike Siciliano
:"Wii sales increased in August this year over July (this year). Wii Sports Resort was released in July. Care to take a wild guess?"

Wild guess of how every single console/handheld(apart from the 10 year old PS2) had a sales increase from July to August?
Plus wii sales DROPPED DOWN 39% year on year in August.
So instead of Wii Sports Reosort being able to lift Wii sales above last year's August sales levels, WSR couldn't even lift Wii hardware sales to last year August levels, especially given that there was no big game release in August last year, and WSR is the Wii's biggest release this year.
Sure, the Wii managed to get a small sales increase of 10% from July to August, but then every single console(outside the PS2) got a sales increase from July to August as well, so you can't really make make too much noise about the Wii's July/Aug sales increase can you?

July to August weekly sales increase
PS2 : 0%
PS3 :71%
PSP :13%
NDS :2%
360 :6%
Wii :10%

Yeah the PS3 had a price cut, but then the PSP and the DS didn't have any price cuts, and the 360 had price cuts for just 2 days in August NPD, yet all of them increased sales..and they didn't need Wii Sports Resort to do it either did they?

@ Mike Siciliano
:"Response to your #1: You complain that the Wii is decreasing in sales based upon percentages compared to previous years, yet you think it's absurd I ask how any product can continuously increase in sales without dropping?"

Nope.
What you said was, and I quote "year-over-year exponentially".
At no time has the Wii ever increased sales exponentially..ever, unless you don't undertand what exponentially" means.
Furthermore, it's not so much about the Wii increasing in sales for ever. No one said that. It's about the Wii dropping very sharply in sales in every country round the world, inlcuding Nintendo's home country Japan, after selling only 50 million units. We are talking 50% year on year drops here.

@ Mike Siciliano
:"PS2 has been out for nine years. Wii has been out for three (almost)."

Correct.
But then the PS2 has already done the trailblaizing, so that we now have 140 million homes with PS2 consoles out there already(plus another 50 million with XBOX and Gamecube). So therefore, for the Wii to suddenly drop 50% in monthly sales, month after month, after only hitting 50 million units( about one quarter of the install base of teh last generation of consoles), is not a good sign, especiually since Nintendo keeps boasting that they have brought in millions of non-gamers into gaming with the Wii. They shouldn't be hitting a wall at 50 million.

"Your little theory has been blown out of the water I am afraid."

Not at all. I didn't say "on" those games' release dates. I said around.

Sales spiked in the multi millions during the Nov./Dec. 2008 months. Pretty much to be expected (to an extent) during holiday season.

But as soon as January 2009 sales drop sharply to 679,000, go up a little, then continue to plunge.

Wii Music sold approximately 2.6 million units. Animal Crossing sold 3.3 million units. Neither game did anything to drive up Wii sales noticeably. In fact, sales flatlined shortly after because of no software major software along the lines of Wii Fit or Mario Kart was released.

It's not a coincidence.

"So instead of Wii Sports Reosort being able to lift Wii sales above last year's August sales levels, WSR couldn't even lift Wii hardware sales to last year August levels, especially given that there was no big game release in August last year, and WSR is the Wii's biggest release this year."

Nintendo titles have a tendency to start out slow or mediocre, then pick up speed and hang out in the top 10/20 list for quite a while, waving at us. Don't you think that maybe, just maybe, Mario Kart Wii, Wii Fit and perhaps even Super Smash Bros. drove up holiday sales despite their early year releases?

So then don't you think that perhaps Wii Sports Resort will follow the same trend? There was no amazing lift in August sales (not that I said there was), yet they didn't continue to plummet.

With New Super Mario Bros. Wii and Wii Fit Plus coming out this year, what do you think is going to happen?

@ Mike Siciliano
:"Not at all. I didn't say "on" those games' release dates. I said around."

Around, on, the same thing.
The Wii registered by far it's highest 4 months of sales around the launches of Wii Music and Animal Crossing.
Not just that, those Oct, Nov, Dec, Jan Wii sales shattered all console records for 4 months sales in any 4 month period in US gaming history. Not even the PS2 ever had any 4 months like that.
So your theory that Wii sales started going down "around" the launch of Wii Music and Animal Crossing, is just not supported by the facts.

@ Mike Siciliano
:"Sales spiked in the multi millions during the Nov./Dec. 2008 months. Pretty much to be expected (to an extent) during holiday season."

Ummm.. NO console has EVER sold 2 million in ANY November before..EVER. Not even the PS2.
That was a record November for the Wii, so you can't claim that Wii Music and Animal Crossing caused Wii sales to go down. They shot UP.

@ Mike Siciliano
:"But as soon as January 2009 sales drop sharply to 679,000, go up a little,"

I think you'd better have another look at the figures buddy.
That 679,000 Wii sales in January 2008, was not only the highest Wii sales in any January ever, it was also the highest number of consoles ever sold by ANY console in Januray. It was a new RECORD for January console sales. You can't very well turn round and try and claim that somehow, Wii Music caused Wii sales to go down when the Wii shattered all January console sales records can you?

@ Mike Siciliano
"then continue to plunge"

There was no "plunging" after January.
There was a solid 753,000 Wii's sold in Feb, then another buffo month of Wii sales n March, when the Wii sold 601,000 units.
It was in April that Wii sales started falling..that is a full SIX months after Wii Music launched.
I'd be quite happy to see your explanation about how a game that was launched in October, managed to get massive Wii sales in Oct, Nov, Dec, Jan, Feb, March, but somehow, that same game from as long ago as October, turned round, and caused Wii sales to fall in April, a good 6 months after launch.

@ Mike Siciliano
:"With New Super Mario Bros. Wii and Wii Fit Plus coming out this year, what do you think is going to happen? "

I think the Wii is going to get a big lift in sales from October onwards(as compared to the last 5 months), from the price cut in October, and from New Super Mario Bros in November. NSMB will be a syetem seller. No question about that.
Wii Fit Plus will give Wii sales small bump, but most Wii Fit Plus sales willl go to those who own Wii's and wii fit already

Look, I agree with you that Wii sales went down because Nintendo did not keep the supply of new hot 1st party games coming after November 2008. It's quite possible that with NSMB in November, Metroid other M and Galxzy 2 and Zelda next year, plus new games that use all these new new Wii motion controller devices that we have seen Nintendo patents of, Nintebdo can put a rocket under Wii sales again. Should be an interesting year next year.

"It was a new RECORD for January console sales."

The Wii can't be appropriately measured against other consoles. It doesn't follow their strategy or their path. The question is how it compared to the previous month. Sales went way down. Remember, Wii was still riding high in holiday '08 from earlier releases of Super Smash Bros., Mario Kart and Wii Fit.

I gave you the numbers for Animal Crossing and Wii Music. You didn't touch those. 2 and 3 million units each. You really think those somehow drove those holiday sales numbers? They didn't. Remember what I said? Nintendo titles that are really successful start out slow or average, then have a huge tail on them. Mario Kart still shows up in the top 20 every month. Of course Animal Crossing and Wii Music didn't cause much Wii momentum, much less carry it.

The rest of what you say, you're agreeing with my points, except you want to pin the date later at November 2008. I say it was earlier. Animal Crossing and Wii Music were mistakes that didn't drive hardware the way Mario Kart or Wii Fit did.