Wii U Software Discounts Hit Ahead of Black Friday, Analysts Weigh In
Posted by Thomas Whitehead
Consoles reportedly sold out, over 2500 on eBay
Now that Wii U has had a day or so to launch and fly off store shelves, industry analysts are starting to look at the early signs of success, or otherwise, for the system. It's all very, very early days, of course, but nevertheless a couple of interesting trends have emerged.
For starters, and to the surprise of no-one, the initial batch of Wii U systems has reportedly sold out across North America. According to gamesindustry.biz, over 2500 Wii U consoles have already been put up for sale on eBay, with prices typically in the $400-500 range. That said, it's suggested that the demand isn't as significant as it was for Wii, with Nintendo's last system selling for as much as $1000 on eBay even into 2007, as stock remained hard to find.
Meanwhile, it's being reported that some retailers are already putting together discounts and offers on Wii U software. Examples of this are the Toys R Us promotion of buy one game, get the next at 40 percent off, while Target's offer is to buy two titles and get the third at 50 percent off. Scott Steinberg of TechSavvy Global believes this is stores seeking to seize customers for all their Wii U needs, though questions whether such early discounts are common with new home consoles.
It's going to be a tough retail season, and given the increasing Black-Friday driven shopping culture, this is a tactic designed to ensure that the store in question is the primary shopping source for the Wii U. If they get you in the door to buy Wii U software at a discount, chances are you're going to do all your Wii U shopping at that specific retailer.
This is certainly a first in history, and it points to the state of the retail and set-top console market. In the past you would never see retailers discounting premium launch software for a console system. In most cases it's an opportunity to mark prices up. But I struggle to remember the last time a console launch had so much software available.
Steinberg seems to be damning with faint praise, somewhat, arguing that discounts on launch games haven't happened in this manner before, therefore reflecting wider issues for the home console industry at retail; he does, also, refer to Wii U having a substantial launch day library. Michael Pachter, senior analyst with Wedbush Securities, meanwhile, argues that this trend doesn't show weakness in Wii U, but simply the reaction of retailers trying to make the most of limited stock during the biggest shopping season of the year.
Keep in mind that they don't have many Wii U hardware units, and that the total shipped to the US is probably well under 1 million for the launch, so their risk is that they sell 100,000 or so titles at no profit. It's a loss leader to drive traffic. I don't think it's a signal about the health of console sales at all.
So there we have some early reaction to the Wii U retail scene in North America. Systems are apparently sold out, plenty are appearing on eBay — though maybe without the same demand as Wii — and struggling retailers are reducing software to draw in customers. Some interesting thoughts, though we won't really know how well Wii U is performing for a good while yet.