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Topic: PRICE CUT: Nintendo to lose money on each system sold?

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Raptor78

21. Posted:

The casual market really sees the 3DS as just a DS with 3D caperbilities whereas people who own one and regulars to sites like this know that it is so much more. It didnt really help with its name because it just sounds like a minor update. But now that Ninty is selling it at a similar price point to the DSiXL consumers may think what the heck and get the 3DS rather than a DSi / DSiXL and hopefully word of mouth will sell the rest.
Im sure that even if they do make a loss on the system as more systems sell, more games will be developed for it generating more revenue, and with the Vita just around the corner and im sure Sony cant trim much more from the price, it will be good to get a decent headstart. In regards to the Vita, just as Joe public thought the 3DS was just a DS with 3D casual gamers just see the Vita as being a PSP with better graphics but now there will be a big price difference again Nintendo will have the advantage.

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iphys

22. Posted:

They might be taking a small loss, but it will be worth it in the long run when the cost of the components goes down and they can still keep selling it for $170. They'll make up for it with software sales in the mean time. I really don't think they planned this from the start. I assumed the system would sell no problem at $250 because it's the most awesome Nintendo system ever, but it seems like most people are clueless about the system, so I think maybe they just released it at the wrong time of year. After the massive hysteria they got for the Wii by releasing it in November with a shortage of systems, I would have thought they'd plan to do the same for every release.

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OverlordMao

23. Posted:

Nintendo is very good at price-dropping around the holiday season, It's great for consumers and has proved well for them in the past as well.
For the moment, I have faith in Nintendo and think they're making the right decision for the moment.

I'm still not getting a 3DS anytime soon though :P

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SunnySnivy

24. Posted:

I think this is a smart move by Nintendo. With the holiday season coming, and the competition of the PS Vita. Plus people will see it's a similar price to the DSi/XL and say "What the heck?" and buy a 3DS instead. I agree with the posts here saying that normal consumers may see it as just a reboot of the DS with 3D, but hardcore Nintendo fans know it's much, much more.

Nintendo might take a loss on this price cut, but they will make it back and more with the sales of upcoming games like Super Mario and Mario Kart.

It is true that games sell systems! The more great games that come out, the more consoles will sell!

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lockelocke

25. Posted:

I never wanted to admit that the handheld market was changing in favor of mobile gaming, but alas, here we are. Out of the 146 million worldwide who own a DS, only 700,000 jumped on the 3DS bandwagon, and DS software sales continue to decline. The price cut was an absolutely necessary defensive strategy, IMO; Nintendo needs to protect their market from the Vita, because they've already lost a part of the market to mobile gaming. Whether a substantial handheld market even exists in the post iPhone world remains to be seen. The launch of the Vita will be an extremely telling event, and will pretty much illustrate wether the handheld console will be a viable product of the future.

I, for one, PRAY that people buy the Vita if they aren't planning on buying a 3DS, because I cannot stand touchscreen gaming, and the App Store, however full of content, is extremely lacking in original and quality games.

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Bankai

26. Posted:

lockelocke: it actually isn't, you just need to shop around to find the good original stuff.

Nintendo's played it smart with this 3DS price cut. If it wants to attract 3rd parties, and have good games on the console, it needs to get the console into people's hands. To do that, it needed to make this price cut.

I see a much brighter future for the 3DS now.

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KaiserGX

27. Posted:

Sorry to go off topic Waltz but I herd you like Samurai Warriors 3 (there doesn't seem to be much good things being said from other places and since you loved Chocobo Dungeon as did I, I would think I could trust your opinion on it. So would to be so kind to do so? (Wii recommendations thread).

Kachou on!

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Bankai

28. Posted:

KaiserGX wrote:

Sorry to go off topic Waltz but I herd you like Samurai Warriors 3 (there doesn't seem to be much good things being said from other places and since you loved Chocobo Dungeon as did I, I would think I could trust your opinion on it. So would to be so kind to do so? (Wii recommendations thread).

Ok, I'll go post there now.

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Birdman

29. Posted:

Isn't Sony taking a loss selling Vita at $250 already? I swear I read that somewhere after E3...

Anyway, I'm sure Nintendo will do all right even if they are selling the 3DS at a loss for $170. I'm almost certain it doesn't take
$40 to make a 3DS game.

Exactly.
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Token_Girl

30. Posted:

If it had just been $199 from the start, they would have been fine. Now they have to play catchup to get third parties to launch games. Still, the ambassador thing is a really awesome move. Ambassadors will definitely get more than $80 worth of games if prices are comparable to the Wii shop. Plus NES/GBA announced. It's nice to see Ninty getting the PR right as well, since they're usually so secretive (though I'm sure it's to attempt to persuade people to buy up stock at $250.

I am skeptical it's being sold at a loss. They're at least breaking even.

Edited on by Token_Girl

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John-John

31. Posted:

In the US, it's illegal to price something for lower than it costs to manufacture it. Not sure if that takes into account cost of transportation and stuff like that. Microsoft's Xbox got in trouble for that once.

John-John

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Bankai

32. Posted:

John-John wrote:

In the US, it's illegal to price something for lower than it costs to manufacture it. Not sure if that takes into account cost of transportation and stuff like that. Microsoft's Xbox got in trouble for that once.

No it isn't. Predatory pricing is illegal. Loss leading is not.

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Glade

33. Posted:

Well games do sell a system. As more people rush to buy the 3ds after the drop, or before it at some price ranging from 250 and under, that means more people are able to buy the first party games coming up for the holiday season as well as others. Well That's just my take on the matter :)

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ocarinaoftime

34. Posted:

nintendo selling at a loss????i'll take bull crap for a 1000 alex....

ocarinaoftime

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Peznaze

35. Posted:

http://kotaku.com/5825872/

Iwata did apparently admit that the 3DS is not profitable at this reduced price, but added that costs would go down once output picks up.

Peznaze

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tanookisuit

36. Posted:

I don't believe it. I remember info a year ago that it would have been able to be a breaking even or pennies of profitable at the $200 price point. Given it has been a little while now since it went into production I'm certain it costs them less now than before(launch) to produce these and get them to stores accounting for R&D and other expenses. I imagine at $180 they're shooting to break even and get some cash back later as costs come down even more. They WILL lose out on money coughing up 20 free games worldwide to the few million owners of the hardware before the cut off date.

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Birdman

37. Posted:

tanookisuit wrote:

They WILL lose out on money coughing up 20 free games worldwide to the few million owners of the hardware before the cut off date.

No, they really won't. The largest amounts of money that they could've earned by selling those games was when they were first released. Those games are essentially just sitting on servers or computers somewhere within a Nintendo office, and porting them to a VC service is exponentially cheaper than developing a new game/IP for a current console, even though they will make less money in the end selling them for $5-$10 to non-ambassadors. It's a risk/reward thing. Giving us 20 free games from past consoles may cause Nintendo to risk money that they could've earned selling them instead of giving them away, but it has the much more lucrative reward of making us more likely to keep our 3DS's to buy games like Super Mario 3D Land and Mario Kart 7.

Exactly.
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tanookisuit

38. Posted:

I know that they made their money on the games in their heyday, but still it's potential profit they're skipping on to appease early owners like myself. I'm not saying everyone would buy all 10 of those GBA games (a few might) but the games had they gone pay in time would be an added $8-10 in money on old stuff they need to do nothing to other than offer up as a download. That's how I intended that comment.

You hit it on the head though and I can't remember if I said it here or on my friends site, but it's nothing to them other than shockingly generous damage control offering up that much to apologize for the lack of games now and the big price cut coming so soon. It's a risk giving them up, but it's a gain because it made me happy and I'll be more willing to buy stuff than I would have if they played the normal 'tough crap dude' angle most companies would have.

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Mandoble

39. Posted:

Non profitable just means it doesnt reach the desired initial target profit per unit, which now it turns to have been extreme (crude robbery) with the initial 270€/unit.

Mandoble

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Swiket

40. Posted:

Untitled

I had fun once and it was awful.

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