Nintendo President Iwata attacks retail pricing model

[Zenien]

Nintendo president Satoru Iwata has attacked the current pricing model used by the videogames industry, saying that software should be priced appropriately at launch rather than being reduced rapidly by retailers.

Speaking in a corporate management policy briefing, the full text of which was released by Nintendo this week, Iwata described the model whereby retailers drop the prices of software in the months after launch as an "unhealthy product cycle."

"We believe that each software should have its own price point depending on its volume, theme, contents or energies and time spent for the development, namely, the development costs," he commented, continuing by saying that "once the suggested retail price is announced, we should stick to it."

"If the suggested retail price of any and all software is marked down in 6 months or 9 months, the customers will learn the cycle and wait for the discounting," he explained, "which will simply aggravate the decreasing sales of new software."

http://www.gamesindustry.biz/content_page.php?aid=17848

 

[imdaly]

He does have a point. But I can see both sides.

I mean, what technology DOESN'T get cheaper year-by-year?

TVs? Media Players? MP3 Players? Computers? Blank Media?

Why should video games be any different?

As technology gets older, it becomes much cheaper to produce, therefore allowing for cheaper selling price. Don't see what's so wrong about it. People who know the pattern already use it, and have for a long time.

 

[Kipobe]

So each piece of software will be individually priced? Also, does this mean a less than $50 launch price tag as the standard?

I don't think it's really that bad a cycle. If the consumer knows what they want, they'll get the game on launch. If it's not that great, they'll get it when the price drops, because so does the value considering people sell off what they don't want and the quantity will be in abundance.

Not sure if I see the whole logic here, but if it means a price tag is lower, I'm on board.

 

[h2olover]

i concur.

 

[Spidey-Bat]

If it means cheaper prices for software that don't change, I'm on board. I'd like not having to wait out for the prices to drop.

 

[Kipobe]

Also, I can get on board with price appropriate software. That means if a company drops a brick of ****, they don't get the standard $50 price tag. That, I like.

 

[Horrorfan]

But if the development costs are high, what if they bring the price up drastically to ensure a profit?

 

[Kipobe]

Wii's development costs are gonna be lower than any other system... so chances are their software will be cheaper. Besides, that concern doesn't even directly apply to this thread

 

[WhatsHisFace]

Here come $2 Mario Parties!

 

[KingOfKings]

I didn't really read the whole thing, just skimmed the post and read the bold part, but I took that to mean "game development costs more money than $50 can really make back for a lot of companies, games need to be individually priced to better meet the publishers expectations, ie they need to be higher", not "we will lower price tags". With this model, if a game costs a lot to develop, they'll happily charge upwards of $70 or more for it, and if it costs virtually nothing to develop, they'll happily charge the "standard price" of $50 for it and make more of a profit that usually. Publishers aren't going to say "well we only spent about $50,000 shoving this thing out of the door, so it's only fair to the consumer that we only ask for $15 per copy", they're going to say "wow, we only spent about $50,000 on this and we know we can get away with asking for $50 for it". I'd rather keep the "games will be $49.99" model.

 

[Horrorfan]

I didn't really read the whole thing, just skimmed the post and read the bold part, but I took that to mean "game development costs more money than $50 can really make back for a lot of companies, games need to be individually priced to better meet the publishers expectations, ie they need to be higher", not "we will lower price tags". With this model, if a game costs a lot to develop, they'll happily charge upwards of $70 or more for it, and if it costs virtually nothing to develop, they'll happily charge the "standard price" of $50 for it and make more of a profit that usually. Publishers aren't going to say "well we only spent about $50,000 shoving this thing out of the door, so it's only fair to the consumer that we only ask for $15 per copy", they're going to say "wow, we only spent about $50,000 on this and we know we can get away with asking for $50 for it". I'd rather keep the "games will be $49.99" model.

Exactly.

 

[Zenien]

Good point.

Though I do think that Nintendo will try to get lower retail prices overall compared to Microsoft and Sony, I don't have too much of a problem with people waiting for a price drop, and dislike people who wait to get the game used, becuase the publisher and developers get not money from that.

 

[KingOfKings]

I'm sure nintendo wants that too, but if they give out an open pricing model and let publishers charge whatever the heck they want, they'll gouge the consumer as much as they can possibly get away with. An open pricing model wouldn't let nintendo do much about it.

 

[Benstamania]

Good point.

Though I do think that Nintendo will try to get lower retail prices overall compared to Microsoft and Sony, I don't have too much of a problem with people waiting for a price drop, and dislike people who wait to get the game used, becuase the publisher and developers get not money from that.

No, they don't but GameStop, EB, ect get ALL of their money from used games. Nintendo, Microsoft and Sony will be around forever, don't let this "the used game market id killing video games" crap fool you.

I don't know about anyone else, but I'd rather get my gaming needs from a game store rather then Wal-Mart. If the used market is shut down, GameStop and EB will go with it.

I have no problem with people picking up used games, I do it myself from time to time, more so if it's something rare.

 

[Horrorfan]

People need to realise that Nintendo, or any other games company, are not your pals. They want your money. If anything, like King said, they would probably raise price if they could. Wii is inexpensive because they know they couldn't compete with current gen consoles from the big two, so go for a different route. If they could, they would. Dont let the cutesty little characters fool you. I'm not saying they don't care at all about customers or quality, I'm sure they do, but they probably wouldn't be any different to any other company when it comes to cash.

 

[Zenien]

No, they don't but GameStop, EB, ect get ALL of their money from used games. Nintendo, Microsoft and Sony will be around forever, don't let this "the used game market id killing video games" crap fool you.

I don't know about anyone else, but I'd rather get my gaming needs from a game store rather then Wal-Mart. If the used market is shut down, GameStop and EB will go with it.

I have no problem with people picking up used games, I do it myself from time to time, more so if it's something rare.

I'm of the mindset that if the company and developers spent all the money to make the game, they should get a return period whenever the game is sold. I'd rather pay back the company and developers then buy it used for a few dollars less so all of that money can go directly the useless EB and Gamestop who invested nothing into the game.

 

[THWIP*]

I'm of the mindset that if the company and developers spent all the money to make the game, they should get a return period whenever the game is sold. I'd rather pay back the company and developers then buy it used so all of that money can go directly the useless EB and Gamestop who invested nothing into the game.

LOL.......'NINTENDO' PROBABLY HAS MORE "CASH" IN THEIR COFFERS THAN 'MS' AND 'SONY' COMBINED.

 

[Zenien]

Not more cash in their coffers, but they make more money in the video game business then Microsoft and Sony combined. Though Microsoft is fairly useless at actually MAKING money in video games and drags poor Sony down by a couple BILLION :0 So I think that the more fair comparison is to that Nintendo makes more then Sony in the video game market and Microsoft got bored one day and decided to throw away 5-6 billion dollars over the course of 6 years.

Not to say that the product they put all that moeny into isn't a good one.

 

[Benstamania]

I'm of the mindset that if the company and developers spent all the money to make the game, they should get a return period whenever the game is sold. I'd rather pay back the company and developers then buy it used for a few dollars less so all of that money can go directly the useless EB and Gamestop who invested nothing into the game.

But GameStop employs a truckload of people. If they close down, those people don't have a cash income. If Nintendo, Microsoft or Sony miss out on the profits from a used game....oh well, it's not going to hurt them.

 

[THWIP*]

Not more cash in their coffers, but they make more money in the video game business then Microsoft and Sony combined. Though Microsoft is fairly useless at actually MAKING money in video games and drags poor Sony down by a couple BILLION :0 So I think that the more fair comparison is to that Nintendo makes more then Sony in the video game market and Microsoft got bored one day and decided to throw away 5-6 billion dollars over the course of 6 years.

Not to say that the product they put all that moeny into isn't a good one.

THAT'S THE THING......'SONY' AN 'MS' DUMP BILLIONS INTO LONG-TERM "PROJECTS", THAT DON'T ALWAYS (OR DARE I SAY RARELY) MAKE A PROFIT. 'NINTENDO' HAS A PRETTY GREAT TRACK RECORD AT MAKING A PROFIT, EVEN IF OFF A MINIMAL INVESTMENT.

 

[Zenien]

Remind me to invest in Nintendo.

 

[THWIP*]

Remind me to invest in Nintendo.

I'VE NEVER CHECKED, BUT I'D SAY THEIR STOCK IS UNTOUCHABLE BY MERE MORTALS.

 

[Zenien]

It does for smaller developers both in sales and that I'm thinking about in this situation.

Here's an example, Rockman X8 sold about 200-250k worldwide and it's an AWESOME game. However itterations fo MegaMan X make meager profits. If not having the used games market means MegaMan X9 is a reality and MegaMan X8 sells 250k-300k, I'm all for it.

 

[GoldenAgeHero]

i buy used games all the time. the only time i buy new games is when i first buy a console, everything afterwards i buy used. metroid, pandora's tomorrow, xmen legends 1 and 2 are all used. if i dont have the money to buy them new, then i go used, dont see a problem with that. and like vader says its not gonna hurt either company. people are still gonna use the virtual console although roms and emulaters are out there.

 

[Zenien]

It doesn't when it's just one person, but it does totally hurt and have an effect when it's millions of gamers.