During an analyst meeting to discuss the company’s financial results, Nintendo president Satoru Iwata said the company has no plans to cut prices on its Wii and Nintendo DS video game systems during the coming fiscal year. The tactic flies in the face of conventional wisdom, which holds that cutting prices on video game systems during their main life cycle is the best long-term revenue strategy, sacrificing some immediate profit for the sake of producing a larger market. Although Nintendo expects DS sales to fall slightly next year—the company expects to sell 28 million units in comparison to 30.3 million units this year—the Nintendo Wii game console is still supply constrained. Nintendo says it is deeply upset that in many cases consumers still can’t reliably set hands on a Wii, and the company is considering ramping up production even further to 2.4 million units a month.
Nintendo has kept the price of the Wii constant since its launch in November 2006. Conversely, Sony has twice dropped the price of its PlayStation 3 consoles (and reconfigured the lineup considerably) to drive demand for the system. Microsoft’s Xbox 360 system has also seen price cuts since its introduction, although it has been on the market a year longer than either the Wii or the PS3.
NIntendo currently holds the top sales position among both game consoles and portable gaming systems.
