Wii U Price Cut Won't Be Enough, Analyst Says
Nintendo could lower the price of the Wii U soon, according to Sterne Agee analyst Arvind Bhatia. That may not be enough to spur a comeback for the console, though.
"Nintendo continues to be in a tough spot as sales of Nintendo Wii U remain soft," Bhatia said in his preview of E3 2014. "Nintendo may choose to lower the price of its Wii U console (from $300 to $250) in an attempt to spur sales but until it can get strong IP on the platform, consumers are unlikely to respond."
I'm inclined to agree. The Wii U's already a hundred bucks cheaper than the PS4 and Xbox One. Chopping another $50 off the price would cut into the Wii U's profits without necessarily helping their chances against rival consoles. Furthermore, Nintendo's not going to be able to lower the price far enough to make the Wii U more appealing than the PS3 or Xbox 360 as a budget game system.
If the Wii U's going to stay competitive, it's going to need better games to justify buying the console. Being cheaper than competitors isn't enough. Gamers aren't going to spend $300 or $250 or $200 on a console if the library sucks. That's still a lot of money.
When the Wii U gets a good release, gamers respond. Mario Kart 8's launch last month caused a huge spike in global sales for the console. Nintendo needs to continue that momentum with other big releases.
If Nintendo has other important titles on the way, they'll likely announce them next week during E3. For the second year in a row, the company won't be holding a traditional press conference. Instead, they're going to livestream their latest media briefing on Tuesday. Bhatia says that this non-traditional approach is an error on Nintendo's part.
"We think this is a mistake and suggests capitulation," Bhatia said.
I don't think that there's much difference between a livestreamed event and a press conference held at the Los Angeles Convention Center. The millions of gamers across the world are going to watch both events in the exact same way: through an online stream. I don't think Nintendo's image is taking a hit because they didn't rent an auditorium and hire Usher or Aisha Tyler to reveal their products.
It's going to come down to games. If Nintendo can show off a slate of promising games for Wii U (Legend of Zelda Wii U, please), that would go a long way toward convincing consumers to drop money on the console.
There was some speculation that Nintendo would instead reveal a new console this year. In other words, they would abandon the Wii U and hope that a new system could fare better against the PS4 and Xbox One. As Bhatia notes, though, Nintendo has denied any such announcements, though.
There's an upside to everyone thinking the Wii U is dead or that Nintendo's surrendering by not holding a press conference: low expectations ("very low," in Bhatia's words). Nintendo could really take the world by surprise if they have an amazing presentation. If their presentation's underwhelming, well, no one was expecting much anyway. They can only go up from here.
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