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Nintendo comments on Wii manufacturing costs, not planning price cut
Following Credit Suisse analyst Koya Tabata's estimation that Wii manufacturing costs are down 45 percent, Nintendo has come out from its corner swinging, ready to put down any and all speculation that a price cut for the console is due soon. In speaking to Edge, Nintendo said the depreciation of the U.S. dollar and British pound is also a factor, as from "launch in December 2006 to December 2008, the value of the pound fell by 43 percent against the yen," and, in the same period of time, the U.S. dollar and euro fell against the pound 22 and 18 percent, respectively.Ed Barton, analyst for Screen Digest, thinks that if Nintendo is to cut the console's price, it could first happen in Japan if "supply has truly equaled demand." Barton points to Nintendo's next financial earnings report, where any and all reduction in manufacturing costs should be evidenced in the company's operating profits. Though trying to gauge an improvement in Nintendo profits is kind of like finding a giant needle in a stack full of giant needles.
Wii Warm Up: When's the right time to drop price?
Yesterday's story about Iwata and his love for money (he is a businessman, after all) got us to thinking about when a price cut is justified. Do you believe that one should use price cuts to stay competitive with competition, much like Sony was forced to do with the PS3 this generation? Or, do you fall more in line with the traditional drop over a predetermined amount of time? When is the time right for a hardware price drop? Do you think manufacturers are obligated to pass the savings that come from making the product over its lifespan on to the consumers?
