Nintendo 3DS Announced

Hhhmmm well my global view must've prevented me from seeing the US go from the world's leading and richest economy to somewhere dangerously close to 3rd world.

Anyhow, my whole point to responding here has been the attitude of the last 4-5 pages that of course it will be alot cheaper in the US. But also of course, somewhere on the internet there are/were Japanese posters who thought that no way would Nintendo charge them 25000 Yen for a handheld, are they crazy!!

 

I don't think that view is based on any sense of superiority or being more deserving, but an assessment of the buying power of $300 and how 3DS would compare with similar priced commodities. Relative to what else you can buy for $300, it looks like a 3DS doesn't get you as much for your money, suggesting it'd be a price without too much demand. That's the thinknig anyway. Personally I can see Nintendo selling that high to a smaller amrket and then dropping the price. I said XB360 could have released at a higher price. Basically you want a price that's high enough that you sell without anyone selling on eBay at an insane markup. If they are selling on eBay at a huge markup, you got your demand estimation wrong and were priced too low, meaning missed profits.

 

When comparing prices across different territories and countries, people really need to stop using exchange rates.

25,000 Yen in Japan is still 25,000 Yen in Japan. Peoples wages, cost of living, etc. all haven't changed despite the rising value of the Yen versus the dollar.

So while 25,000 Yen is now worth a lot more dollars than it was say 4 years ago. None of that impacts anyone in Japan directly because dollars are irrelevant in the local economy. A 2,500 Yen steak is still a 2,500 Yen steak and not a 30 USD steak.

So the question of "But why is $300 considered affordable in Japan but too high in the US?" is irrelevant as USD isn't used in the Japanese local economy. People aren't paid a variable wage based on the current exchange with the dollar.

Once you move outside of Japan, then you have to look at each of the markets you want to enter and determine what each individual local economy can and will support.

For most of the top tier economies you'll usually not have a problem. But go to countries where the exchange rate makes it impossible to price your product such that it is attractive in that local economy (say Peru or Vietnam as examples) and profitable for your company, then you just don't sell your product there. Just like I believe neither the X360 nor PS3 launched in most of S. America and the PS2 possibly remains a hot selling item.

So when the DS comes to America, Nintendo have to determine not only what would be an attractive price point in USD (determined by local economy) but as well if that price is profitable in their native currency (determined by exchange rate). If they can get both of those where they like it, then it'll sell in the US. If not, then it won't.

Regards,
SB

 

Yes 25000 Yen is still 25000 Yen which is still 10000 Yen more than the 15000 Yen that the DS went for.

And it still doesn't mean that americans should expect Nintendo to take 20% less just to sell to them.

If I'm selling that steak for $30 here in Chicago, people in Northern Wisconsin shouldn't expect me to sell it to them for $24 just because people on avg make more money in Chicago.

 

Except local economies do work like that! I can eat for a lot less outside of London than in London, because the cost of living in London is more such that businesses there ahve to charge more, but then those working there tend to get paid more. We even have a London Weighting allowance directed specifically at that. The cost of everything is typically cheaper up north because people earn less - there's no point trying to sell them a £30 steak dinner as they just plain can't afford it. Petrol costs typically 10% less in the less built up parts of the UK, because people earn less. Regional economies, both big and small, come into affect wherever you want to sell stuff.

 

I don't think its the price as much as the software.


Someone is claiming that this is the most impressive software line up , but most of the games have no release date and here in the states the biggest game seems to be zelda which is what a 12 year old port in 3d ?

Japan will eat it up more because they have been hotter on the ds in general and with new games targeted to them it will sell very well. New pokemon or monster hunter or dragon quest is all they need to sell it in japan. In the states they will need more software than that

 

If I'm selling it for $30 then the price is $30, they shouldn't expect it for less because of their location. If they can't afford it then they can't afford it, they can either buy something they can afford, buy nothing, or wait until I want to sell it to them for less.

My point has always been that people shouldn't just assume they are going to get it for less just because they think the price is too high, people in Japan may also think the price is too high but they'll be paying 25000 Yen if they want it and people in the US should also expect to pay 25000 Yen (or its $ equivalent) if they want it.

 

And if no-one can afford your product, you sell none. What's in it for you then? the whole point to any product is to make money off it! Alternative you can drop the price and make less profit per unit than you'd like, but at least make some profit.

In this case, *if* $300 is too much for the US market to stomach, Nintendo can either ignore that market and lose many millions in profit, or drop the price to something more palatable and make millions in profit. Not as much as if they had sold those units for $300, but if no-one's going to buy at that price, infinitely more than selling no units!

If it's too high, they won't buy. Too high is the price which turns people off, and not the price that they grumble at but still pay. Regional differences could mean that in Japan, the value of 3DS is $300 going by current exchange rates and they're willing to pay that, while in the US, and Slovakia, and Romania, it's considered too expensive and they won't pay. At which point Nintendo either accept the lost revenue, or price lower in those markets to secure some revenue, keeping the price higher in more receptive markets where they can make more profit. And if the price a market is willing to pay is too low, it makes more sense not to sell there. It's a balancing act.

 

25000 yen is 2.7 times more than what Final Fantasy 13 cost when it was released in Japan. Some things clearly are more expensive in Japan. 3DS will be 250$ at most in US.

 

Of course and of course. I'm not making a judgement call on Nintendo's sales strategy, if I were doing that I'd say their asking price is too high no matter where they're trying to sell it. But they either a) think they can get that price, or b) have no choice but ask that price to keep from losing money.

 

If you go into business with this attitude then you're not going to last very long. Good luck opening a £50 a plate fine dining restaurant in one of the old pit villages/towns here in the north east. The locals will stick to their <£5 pub lunches. Similarly if you open an outlet selling quality meals for <£5 in the heart of London then good luck meeting your running costs. Pricing always has to be tailored to the local market.

 

It's not a matter of the 3DS selling at all, it's a matter of who 3DS is going to sell to. Even at $249 it seems to lock out a significant part of traditionally strong Nintendo handheld audiences. For kids it's significantly more than GBA's $99 and that might be a huge barrier not possible to overcome. While adults who are more casual about gaming maybe satisfied to play on their iPhones/other mobile phones.

Yes, Wii was also $249 and was selling like crazy, but it was considered family entertainment, therefore easier to justify than a device for a single person. Why should it be a concern for us? I'm afraid if 3DS will be bought by the same audience that buys PS360. genre variety might be hurt a wee bit.

 

Good point about the family entertainment, but it's not even that far, often it's shared between the kids where the handheld is mine mine mine. That's not a pretty prospect for lots of parents.

 

Ok, first of all I'm from the UK. Yes Nintendo has never released a 25000 yen handheld in Japan, but they also haven't even released a $250 handheld in the US, never mind $300. Its a matter of what the market will support, they may be able to sell at $300 but its a risky move IMO. Like I said the way people think about the money in their hands doesn't change simply because the exchange rate has changed in the last year or so. Too a Japanese person 25000 Yen is still what they paid for a Wii a few years ago while to an American $300 is still $50 more then they paid for a Wii a few years ago.

They might stick strictly to exchange rates and sell 3DS for $300, I just doubt it.

 

I'm still not sure what Nov japanese prices have to do with Spring 2011 USA / Europe pricing .

I don't see them selling the 3ds at $300 in the states. In fact $250 is pushing it here. I would think they would move the unit to $225 or less. The dsi will go from $150 to $125 and the xl will go to $150.

Thats imo of course. I want a 3DS but I'm not buying it at $300.

 

With the way all active platform holders have recently priced their hardware in the US vs anywhere else, US operations seem to be mostly developer outreach programs.

 

Rein: 3DS likely below minimum specifications for Unreal Engine

http://www.joystiq.com/2010/10/06/rein-3ds-likely-below-minimum-specifications-for-unreal-engine/

I think this is unfortunate. They are basically ignoring the device at this point.

 

I think it's unfortunate that Nintendo is selling such an underpowered machine for such a high price.

I completely understand their point of view. It isn't worth their time/effort.

 

I wonder how many £30 UE3 games will be sold on Iphone?