Would Nintendo consider a price reduction?

The video game market has been contracting in recent years. According to research from ABI, sales of video game consoles dropped by around a quarter in 2012 as the big three systems came towards the end of their life cycles.

The launch of the Wii U over the festive period was reasonably successful, however, since then sales have been slow and the researchers at ABI believe this is down to the GamePad not yet resonating with core gamers.

Senior analyst at ABI Michael Inouye had the following to say on Wii U:

The Wii U will likely prove a closer fit with the current generation than the next. The software released to date also bears out this assessment with many cross-platform games that were previously available from Microsoft and Sony. While the Wii U Gamepad offers some novel gaming elements it has not yet resonated with core gamers.

There are many factors that could be stagnating the sales of Wii U. Some point to a lack of games on the console, while others are waiting to see what Sony and Microsoft have to offer with their next generation of hardware.

The video game market may appear to be a bit on the bleak side but ABI is actually cautiously optimistic, however it states it will be Sony and Microsoft that will determine the future prospects of the video game console, not Nintendo.

It believes that if the console market is to bounce back, there will be three things that will need to happen in the near future:

First, that the Wii U receives a price reduction in 2013.

Second, that next gen consoles from Microsoft and Sony launch with adequate time and production to meet holiday demand, with pricing below $450 and ideally at $350.

Finally, that the next generation consoles don`t adopt significant consumer unfriendly practices that will cause consumers to rethink their purchases, such as steps to inhibit the used game market or requiring an always on DRM/Internet connection to prevent other forms of piracy.

It appears ABI sees the Wii U as the cheaper alternative in the next generation of home consoles and one that will be closer to the seventh generation than the eighth. If it did receive a price cut then it would be much cheaper than the new Sony and Microsoft systems, which would certainly make it more appealing for many.

Core gamers out there seem to be waiting for Sony and Microsoft to reveal their consoles and prices before fully committing to Nintendo's Wii U. It's fair to say that the release of the PlayStation 4 and the next Xbox will give the video game market a boost and will most likely help the sales of all three systems.

What are your thoughts on this? Do you agree with the analysts? Let us know your thoughts in the comments section below.

[source reuters.com]