Iwata on Wii Game pricing

[TheChefO]

"Once the suggested retail price is announced, we should stick to it,"

Interesting concept he discusses in this interview. He seems to lean on the concept of significantly lower pricepoint initially for Wii games and hold the same price. By doing so it will push sales initially and maintain sales based on the quality of the game.

He did not discuss the specific game prices though.

Hopefully a $29.99 standard is set with this new scheme. I could see it being very successful with that kind of price discrepency against $60 games for 360/ps3.


http://www.eurogamer.net/article.php?article_id=65647

 

[fearsomepirate]

Actually, I think this is better reflected in the fact that Advance Wars, Geist, Fire Emblem, and Mario Baseball are still priced at $49.99. Almost all the DS titles are still at full price as well. Nintendo's been extremely sluggish about price drops compared to other game companies. Expect lots of $49.99 games that never drop in price rather than games that launch at a lower price.

 

[Bobbler]

While I can agree with him looking at it from a business perspective (that idea hes talking about is a bad stigma for any market to have really), as a consumer I rather like the fact that prices drop ... although it doesn't matter to me all that much (but I know it does for some).

I didn't read the whole interview, so I didn't catch any hints about cheaper prices, but what I saw was him not wanting to drop prices on games over time because it creates a pattern and people just start waiting for the 20 dollar games instead of buying them earlier because they know it will happen (which is what Nintendo already does the worst of the three at -- GC game prices rarely seem to go down over time, especially first party ones).

I'll have to read the rest of the interview after I get home, but it was curious to see Iwata saying something like that.

 

[Blade]

Expect lots of $49.99 games that never drop in price rather than games that launch at a lower price.

Based on Nintendo's tactics with the DS, like the $20 Brain Training games... this makes no sense.

It'll likely be more like consistent $40 with no price drops.

 

[Bobbler]

Based on Nintendo's tactics with the DS, like the $20 Brain Training games... this makes no sense.

It'll likely be more like consistent $40 with no price drops.

I wouldn't bet on Rev games being cheaper than GC games on average -- DS games are about the same price as GBA games were, so if anything, we should be expecting 49.99 Rev games with possibly even less price drops (of course there will be the occasional budget title, but those aren't the norm anywhere).

 

[sonyps35]

Yeah it wont be less than 50 bucks. It just wont.

 

[TheChefO]

I wouldn't bet on Rev games being cheaper than GC games on average -- DS games are about the same price as GBA games were, so if anything, we should be expecting 49.99 Rev games with possibly even less price drops (of course there will be the occasional budget title, but those aren't the norm anywhere).

I'd agree if Nintendo had no intention of outdoing gc with Wii. However they seem to be well aware of the shortfalls of the platform and intent on capturing marketshare. By stating "games shouldn't drop in price" and criticizing publishers for their high price games, one would assume he is aiming to have a lower price bracket in mind.

 

[Bobbler]

I'd agree if Nintendo had no intention of outdoing gc with Wii. However they seem to be well aware of the shortfalls of the platform and intent on capturing marketshare. By stating "games shouldn't drop in price" and criticizing publishers for their high price games, one would assume he is aiming to have a lower price bracket in mind.

What makes you think 49.99 isn't the "lower price"?

 

[TheChefO]

What makes you think 49.99 isn't the "lower price"?

Thats what ms is charging for 1st party 360 games. Not that I think it is or isn't going to be the price But I'd imagine they could be more successful in Iwata's "flat rate scheme" with a lower pricepoint than $50.

 

[pc999]

If I am not mystaken DS games are cheaper than GBA here.

Anyway this make sense from a art and business (if they really plan new gamers) prespective, but depending of the price standard it may be very bad for many users like me who barely buy games above 30 euros and I even buy many at 1/2-1/3 of that so if they plan to put they above it they will lost me as a costumer.

But I always had hope that this will also bring cheaper games and some of they comments make me have more hope for that

What is notable today is, people are actively purchasing a 15000 yen DS or a 16800 yen Lite just because they want to play 2800 yen software.

Other people in the industry also said this (Clyff B. from GoW) and each time there is more cheaper games.

Plus this only make sense for new gamers from the mass market who would not pay for games so I realy I have hope for cheap (20-30euros max) games (althought I will not be able to buy 10 euros games , I would still prefer this way).

 

[Bobbler]

Thats what ms is charging for 1st party 360 games. Not that I think it is or isn't going to be the price But I'd imagine they could be more successful in Iwata's "flat rate scheme" with a lower pricepoint than $50.

It wouldn't actually surprise me to see Nintendo produce a lot more reduced cost games (20-40 dollar) compared to last generation (honestly, Rev seems quite suitable for cheaper games -- most of the games they showed at E3 looked like $20-40 dollar games in substance), but I think Rev will have a 49.99 as it's "normal" price (for the average title compared to 59.99 for X360/PS3's).

I think Iwata's comments were likely made as a relative argument comparing the expensive competitors to what they were aiming at... since all Nintendo would have to do is stay put in their pricing to seem cheaper, I'm not sure they'll really want/need to do a whole lot outside of that to justify such comments.

 

[TheChefO]

It wouldn't actually surprise me to see Nintendo produce a lot more reduced cost games (20-40 dollar) compared to last generation (honestly, Rev seems quite suitable for cheaper games -- most of the games they showed at E3 looked like $20-40 dollar games in substance), but I think Rev will have a 49.99 as it's "normal" price (for the average title compared to 59.99 for X360/PS3's).

I think Iwata's comments were likely made as a relative argument comparing the expensive competitors to what they were aiming at... since all Nintendo would have to do is stay put in their pricing to seem cheaper, I'm not sure they'll really want/need to do a whole lot outside of that to justify such comments.

Agreed they wouldn't "have to" and they would still be "successful" but while they may initially be cheap comparing $49 to $59 games, the $59 games will be coming down in price over time, while according to Iwata's statements, the Wii $49 games will always be $49. That's where the argument falls apart. I'm not saying they will be cheaper than $49, just that they would be more successful with a <$49 flat rate scheme in this upcoming market.

 

[Sonic]

It is a bad idea to have a flat fee for a game through its lifecycle. A lot of games are sold at their initial price for their first few months and that's when most people will buy them. What's going to happen when games stay at a flat rate and they are no longer selling because budge minded gamers will not purchase them? It will be lost sales because those consumers will not purchase the game at the original price. By lowering the price a company can eke out more sales and get additional revenue. By keeping the price the same they will lose those sales and not make additional money off of the game.

 

[Fox5]

Yeah it wont be less than 50 bucks. It just wont.

Dreamcast games always launched at $40 or $50, maybe Nintendo could do the same.

Anyhow, isn't it a basic facet of economics that to maximize profit, you do have to drop price at some point in time? For him to say dropping price is a bad idea, he either hasn't taken an economics course, or he better be prepared to follow the movie and music route where the game is launched at a low enough price that even if it eventually does drop price in a few years, it's by such a small amount that it wasn't worth waiting for, which will in turn drive sales of newer software which is only a few bucks more.

 

[TheChefO]

where the game is launched at a low enough price that even if it eventually does drop price in a few years, it's by such a small amount that it wasn't worth waiting for, which will in turn drive sales of newer software which is only a few bucks more.

Exactly, this is what I think he was thinking. Where this pricepoint is, is in question and I wouldn't be surprised if they weren't currently researching this "sweetspot" price point.

 

[Blade]

Some GCN games released at $40.

My logic was that instead of starting at $50 or $60 and eventually dropping to $20-30... they'd start and stay at $40.

I haven't done a lot of research, but supposedly Wii dev kits are around $1700, and it's much easier to develop for than PS3.

It wouldn't surprise me if the games were $40, or $50. I don't mind either price.

 

[StefanS]

Some GCN games released at $40.

My logic was that instead of starting at $50 or $60 and eventually dropping to $20-30... they'd start and stay at $40.

I haven't done a lot of research, but supposedly Wii dev kits are around $1700, and it's much easier to develop for than PS3.

It wouldn't surprise me if the games were $40, or $50. I don't mind either price.

There's a real flaw in that logic: While the costs for developing a Wii game is certainly lower than for a PS3 game, the costs are likely higher than for developing a GCN game due to the, though only slightly, increased capabilities of the hardware. So there's zero chance of seeing Wii games in general being a lot cheaper, i.e. $10, than the GCN software. Also keep in mind that devkits costs are a small factor in the budget of software titles.
Moreover, using fixed prices would create a lot of problems. Older software would not sell, as you could get the new ones for the same price. That would mean there'd be a lot more software rotting on the shelves. Why buy Madden 2006 for $40 when you can have Madden 2007 for the same price?

 

[Fox5]

There's a real flaw in that logic: While the costs for developing a Wii game is certainly lower than for a PS3 game, the costs are likely higher than for developing a GCN game due to the, though only slightly, increased capabilities of the hardware. So there's zero chance of seeing Wii games in general being a lot cheaper, i.e. $10, than the GCN software. Also keep in mind that devkits costs are a small factor in the budget of software titles.
Moreover, using fixed prices would create a lot of problems. Older software would not sell, as you could get the new ones for the same price. That would mean there'd be a lot more software rotting on the shelves. Why buy Madden 2006 for $40 when you can have Madden 2007 for the same price?

I hate hearing that more powerful hardware requires bigger budgets.
1. The devs are free to produce on the same budget as always, and even use that extra power for something like antialiasing or post processing effects that don't require as much effort to add in. If their game is quality, it will still sell, regardless of how much money was bumped into it.
2. Dev tools get better too. With the Wii, it's possible the dev tools improved enough over gamecube to actually make it cheaper to produce games, like the transition from gameboy color to gameboy advance.

 

[pc999]

There's a real flaw in that logic: While the costs for developing a Wii game is certainly lower than for a PS3 game, the costs are likely higher than for developing a GCN game due to the, though only slightly, increased capabilities of the hardware. So there's zero chance of seeing Wii games in general being a lot cheaper, i.e. $10, than the GCN software. Also keep in mind that devkits costs are a small factor in the budget of software titles.
Moreover, using fixed prices would create a lot of problems. Older software would not sell, as you could get the new ones for the same price. That would mean there'd be a lot more software rotting on the shelves. Why buy Madden 2006 for $40 when you can have Madden 2007 for the same price?

They would probably prefer sell 3x more games at 1/2 of the price or even 4x at 1/3 of the price.

Althought if games like Madden keep being like the XB/PS versions then you do have a good point, a very good one. Althought I would guess that companys will have control about their pricing.

Still for high (near GC) prices it will be bad for them, for lower prices it would only be possible for mass market in Brain Traning like sells.

 

[Sonic]

Fox5, dev costs will naturally be much higher for new generation consoles than for the previous generation. Sure the same budget could be used but then there is a lot of stuff that will have to be cut out of these games. The same game on a new console comapred to an older console cannot be done on the same budget, because there is still a certain level of research that has to be done on these new consoles to even come to grips with the hardware. But this is off topic, if you would liek to continue this discussion we will make a new thread.