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Merrill Lynch Predicts $200 Wii

Posted by Zonk on Tue May 16, 2006 04:41 PM
from the not-a-bad-price dept.
Businesses Nintendo The Almighty Buck Entertainment Games
Burlap writes "In a story at Forbes, Merrill Lynch predicts that Nintendo will severely undercut the competition with a $200 price point on the Wii." From the article: "An executive from SEGA, one of Nintendo's largest publishers, told Forbes.com on Tuesday that he expects the Wii to sell for less than $200. Post said the Nintendo machine, which features a wireless controller that responds to players' body movements, 'will appeal to a broad demographic of both hard-core and casual gamers.'"
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  • If i had a nickel for every time an analyst made a prediction that turned out to be incorrect, I'd have the $200 necessary to buy the Wii!

  • price point... (Score:5, Interesting)

    by moochfish (822730) on Tuesday May 16 2006, @04:43PM (#15345729)
    Every dollar they price this below $250 increases the likelihood of me buying it by roughly 1%. =)
    • So say they sold it for $50... Would you then buy an extra for me? :)
      • Nintendo's not just going to lower the price of the console - they're lowering the price of the games as well:

        FTFA:

        may be easier to create new software for, and Post thinks third-party game publishers "are responding favorably to the lower-cost publishing environment for the Wii."

        TRANSLATION: "Lower-cot publishing environment" == "lower licensing fees" + "fewer resources to develop each title"

        If they're able to cut the price of a game down to $20-$25 bucks (

        1. $4 per-unit license
        2. $4 game developer/publisher
        3. $4 manufacturing costs
        4. $ distribution chain
        5. $4 retailer

        ... they'll do 5 things:

        1. take a huge bite out of the underground market for chip mods/pirate games
        2. beat the crap out of the competition
        3. get rid of game rentals - why rent when for $20 you can own?
        4. more than make up the $$$ on volume
        5. developers/publishers also get a much larger market, as the games become impulse buys. At $20, every game becomes a million-unit seller.
        After all, with a console at $150, and games at $20-$30 a pop, it's the no-brainer buying decision.

        At $50 - $70 a game, people think twice, 3, 10 times before they buy ... at $20, they'll buy one a week.

        • Highly unlikely. The Gamecube was easier to develop for (using your criterion, anyways), and games for that went at the same price as everyone else's.

          -Erwos
        • Bingo!

          They kicked the PSP arse with the DS by using that tactic.

          DS games are typically $20.00 to $40.00 new first day release.

          PSP games can go upwards of $70.00

          It's a no brainer. I own 2 DS's and 2 of every game I wanted. I have spent less than a friend that is a PSP nut and I have more games than he does.

          The Wii will be in many, many more homes and will sell more games than the other two combined. Hell they already have more launch titles than the Xbox 360 has available now and the machine is not due for
        • After all, with a console at $150, and games at $20-$30 a pop, it's the no-brainer buying decision.

          Or better yet! Why don't they give out the console for free! And pay you to take the games off retailers shelves!
          [/sarcasm]

          I'm looking forward to the launch of the Wii too, but let's not get carried away here. Nintendo has to adjust for inflation eventually, so consoles aren't going to launch under $200 anymore. And you fail to take into consideration the fact that the dollar is weak against the yen.

          All this s
          • The inflation argument doesn't hold. For the last 2 decades, electronics has been constantly deflationary. I can buy a 27" colour TV for under $200, with a MUCH better picture.

            Same with computers - the $400 computer today is worlds ahead of the $4000 computer a decade ago.

            Same with the components ... ram, chips, optical drives --- all cheaper.

            It costs less than a buck to press a dvd nowadays.

  • As my Leprechan says. (Score:5, Funny)

    by Kaenneth (82978) on Tuesday May 16 2006, @04:44PM (#15345740) Homepage Journal
    That's a Wii price. A small hit to the pot-o-gold.

  • Maybe (Score:5, Interesting)

    by HunterZ (20035) on Tuesday May 16 2006, @04:44PM (#15345744) Homepage Journal
    Microsoft and Sony have given Nintendo some wiggle room on price here, so I think $199 will be the minimum price for the console through the end of the launch year. I wouldn't be surprised to see it go for as much as $299 at launch, or even $350 if it comes with a strong bundle.

    • Re:Maybe (Score:3, Insightful)

      by interiot (50685)
      Well, the XBox 360 core launched at $299. MS will probably drop the price at some point before PS3 launches, possibly to $250. Nintendo has stated that the Wii will be priced below the 360 and PS3... does that mean it will cost $250 or less?

      • Re:Maybe (Score:5, Insightful)

        by gabebear (251933) on Tuesday May 16 2006, @07:41PM (#15347153) Homepage Journal
        I think it's a lot more likely that the 360 Core will be discontinued and the Premium will go down to $350. The 360 doesn't need a lower price to compete with the PS3 and can't compete on price with the Wii. Microsoft is probably best off by leaving the price alone for a good long while.
      • Ah, you're right - please excuse my ignorance, I thought the XBox 360 launched higher than that for some reason. Definitely Nintendo will want to launch the Wii at at least $50 under whatever the street price of the XBox 360 is at that time. I don't see it falling too far under $200 for a while though, as I doubt Nintendo would make enough of a profit at those prices.
  • http://games.slashdot.org/comments.pl?sid=185919&c id=15344390 [slashdot.org]

    I already extrapolated exactly this prediction from the data given in a previous article. The evidence I drew this conclusion from was the posted statistics in TFA of the previous note (the article is available here [curmudgeongamer.com] if you don't want to follow too many links).

  • Another Wii (Score:5, Insightful)

    by foundme (897346) on Tuesday May 16 2006, @04:47PM (#15345766) Homepage
    Is there a constructive reason for such prediction? Will Merrill Lynch get a prize or something if the prediction is correct?

    We already have Google popping up in every 3rd article, now we have Wii.
    • Merrill Lynch is an investment company. My brother works for A.G. Edwards, also an investment company. The reason companies like this come out with predictions is to advise their clients what stocks to buy and which to sell.

      I have been in the options market for a little over a year now, and when the company believes a stock will go up, they set a target price and a time frame and advise me to buy... It's just the way they work.
    • Well Slashdot has always been full of rabid Nintendo fanboys.

  • Seems like I didn't trust them... (Score:3, Informative)

    by adminsr (919472) <adminsr@gmail.com> on Tuesday May 16 2006, @04:53PM (#15345819)
    Anyone remember Merril Lynch's $900 ps3?

    linky [slashdot.org]

    • I'm guessing that someone paid them to make both of those statements. Maybe with cash, maybe with considerations.

      Anyone could have paid ML to claim that the PS3 would be $900, including sony, who could have decided that they wanted a high estimate so they could tell consumers that it would be less expensive than predicted.

      Nintendo has a vested interest in making people believe that their system will be inexpensive, especially if they can do it without actually making any statements themselves, so tha

    • Wasn't the $900 PS3 estimate based on Sony's actual cost, not the price it would be sold to consumers at?

    • Anyone remember Merril Lynch's $900 ps3?

      (a) That was the estimated cost of the system. Merril Lynch doesn't seem to understand fully that Sony sells their consoles at massive losses at first. (b) That estimate was based on the cost of those components at "launch," but was written back when Sony still insisted that March 2006 would be the launch month. Were it actually made in March 2006, it would have cost $900 to build. (c) The component list was based off Sony's 2005 E3 specs for the PS3, which diff

  • Wow, flash news here (Score:5, Informative)

    by masklinn (823351) <slashdot...org@@@masklinn...net> on Tuesday May 16 2006, @04:55PM (#15345841)

    The NES had a launch price of $200, the SNES had a launch price of $200, the N64 had a launch price of $200, the GameCube had a launch price of $200.

    Nintendo has had launch prices of $200 for 20 years now, you have to be pretty fucking impressive to even have the nerve to utter that they could launch a console for an unheard-of-before price of $200

    Well, at least that time Merrill Lynch may be spot on.

      • As long as Moore's Law significantly outpaces inflation, you should see the cost of most consumer electronics continue to decrease, while their capability increases.

        If $200 buys you X transistors this year, and 1.5X transistors in 2008, then as long as inflation doesn't exceed 22% a year, you'll be getting more capability for less money each time.

        Or at least that's true as long as the cost of the chips needed for an acceptable game machine make up a significant portion of the cost of the machine. When the chips are (much) less expensive than the rest of the components, the relative cost curve will flatten out.

        -Mark

  • Potential Wii (Score:5, Interesting)

    by Anonymous Coward on Tuesday May 16 2006, @04:57PM (#15345857)
    I am planning on buying at least two of these. One for the family and another for the local children's hospital. I think this controller will really help in physical therapy dept. with the rehabilitation of children. If they offer games that appeal to older adults it could also be a Xmas gift for the grandparents/nursing home too! The boomer generation is the largest growing market and as of yet has been untapped. I think the people at Nintendo deserve a raise for this revolutionary product (pun intended)!
    • put resident evil, quake, and DDR in a nursing home and no doubt you'll be cashing in on grandma's will in no time
      • This is a great idea. We should all actually write to Nintendo (including using actual paper, stamps, and envelopes) and make a suggestion that they donate some consoles and games to childsplay directly.

        If nothing else it's not only good publicity, but it's almost viral marketing. When kids are in hospitals sick, and they have this great system with great games that's cheap, parents might consider it afterward.

        And with the price discrepency, I really don't see Childsplay buying that many PS3's this year,

  • Hmmm (Score:5, Insightful)

    by JeffSh (71237) <(gro.0m0m) (ta) (todhsalsffej)> on Tuesday May 16 2006, @04:58PM (#15345869)
    Console itself will be $200 isnt too far stretched, just still don't expect to get out the door without spending upwards of $200 MORE on games and accessories.

    The raw console will be $200 with your standard one controller, but you'll not have everything you want for far more.

  • Maybe a few weeks ago... (Score:3, Interesting)

    by r_glen (679664) on Tuesday May 16 2006, @04:58PM (#15345871)
    This article was written last week. I still believe that Nintendo was all but ready to throw out the $200 figure until Sony announced their price at E3 (Nintendo was quoted as being quite surprised that Sony chose to announce their price so early, and everyone else was shocked at the number). Now Nintendo is going back to discuss the possibility of a $250-$300 price point. After all, their whole model is the appearance of affordability for casual gamers, and $250 is still LESS THAN HALF of a PS3 and considerable cheaper than a 360.

    If it turns out to be above $250, I sure hope they include an extra controller and perhaps some sample games to show off functionality (Wii Sports, for example, seems fun but doesn't strike me as a game I would pay $50 for)

    • Now Nintendo is going back to discuss the possibility of a $250-$300 price point. After all, their whole model is the appearance of affordability for casual gamers, and $250 is still LESS THAN HALF of a PS3 and considerable cheaper than a 360.

      Duh? there'd be no fucking point in doing that. Consider the followings:

      • Microsoft will drop the price of the 360 as soon as the Wii and/or PS3 is released. This means that the Xbox360 Core will probably be around $200-$250 and Premium around $300.
      • Nintendo has always made a profit out of the consoles alone. And yet they never went for maximizing unit price. If they set the price at $200, they have no damn reason to change it
      • The lower the price of the console, the more games you can buy. Nintendo makes a profit on games too...
      • This is the 5th console generation Nintendo has taken part in. The release price points of their previous systems generation per generation were: $200, $200, $200 and $200. Why the hell would they try to raise the price if that one works so well?
      • Finally, Nintendo wants to open non-gamers market. Non-gamers do NOT drop money on games or consoles, releasing the Wii at $300, or even $250, would more than likely be very uncomfortable for their current target audience, and would hurt the sales.

  • Game prices and piracy (Score:3, Informative)

    by Ruediger (777619) on Tuesday May 16 2006, @06:22PM (#15346579)
    I would love to get a Wii (all my consoles were from Nintendo, with the exception the Atari 2600), but I belive the price will be prohibitive when it gets here (Brazil). The consoles are quite expensive, but the games are WAY expensive. I was looking forward to get a newer Nintendo system (my last one was the N64), but after seeing the price of the games for the Game Boy Micro, DS and GC I gave up. Just to give you an idea:

    The cheapest Game Boy Micro I found goes for R$399.00 ~ $181.00 (expensive, but affordable considering you only need one console). GBA games: R$ 69.00 (older games) to R$249.00 (WTF!?) ~ $31.00 to $113.00

    I don't know anyone who has any of these consoles, but I know quite a few people who have PS2. The PS2 costs about $295,00 (with mod chip installed), but the games are virtually free due to piracy.

    Is the situation similar in other countries? That would explain why Sony sells so many PS2.
  • An executive from SEGA, one of Nintendo's largest publishers...

    If you had uttered this phrase to me 8 years ago, I would have told you that you need better jokes.

  • IF this turns true... and only if (Score:4, Funny)

    by IgLou (732042) on Tuesday May 16 2006, @06:49PM (#15346781)
    I must admit I'd be getting a Wii and then I can play Pokemon! *sputter cough* I mean Resident Evil...

    On the serious side though, I'm in that group of "buy another console? Over my dead body!" I pinch pennies all the time now and I don't get to buy/play what I want anymore. Part of me actually wants all these consoles to undersell their expectations and then maybe just maybe these consoles will stop being pushed out so frequently.

    Oh well, I can always play on my computer.
  • Assuming that the rumored unit pricing is true...

    At least Nintendo remembers why people buy videogame consoles instead of (or in addition to) general purpose computers. People bought all of the most successful game systems because they were a cheap and easy to entertain your kids, NOT because they were higher powered - consoles are all low powered compared to loaded gamer PC's. Of course, for every generation of game systems there is competition about who has the best spec's and, more importantly, the best games, but every time a company forgets that the most important thing is to be cheap and easy, they end up making an absurdly over-spec'd, over-priced, overly complex system that fails in the marketplace because they chased after the high-end niche market instead of the mainstream.

    Winning Systems: NES, GameBoy, PlayStation, PlayStation 2 (pushing the high-end of pricing at launch, but came down).

    Losing Systems: Intellivision, Atari Lynx, NEC Turbo Graphix, 3DO, DreamCast, Xbox. All tried to sell more functionality for more money than people were willing to pay.

    When I look at the next generation systems, the Wii looks like the NES and GameBoy - a cheap and easy way to entertain your kids. And Sony and MS's next boxes look a lot like 3DO - great spec's, but wiped out by more pragmatic competition.

    Sony's only hope is that they can somehow convince people to buy PS3's as their HD DVD player, which might get home theater enthusiasts to buy PS3's. The Xbox 360 seems doomed to me, once its real competition arrives.

    My prediction is that the Wii will outsell the PS3 and Xbox 360 by massive amounts, because Nintendo is (1) targeting the mainstream market, and (2) focusing on gameplay, innovating in areas like the controllers, and their downloadable game service, that don't price them out of their market. The risk I see to the Wii is that if game publishers don't think it'll do well, they won't sell games for it, hurting it in the general marketplace. But if Nintendo is committed to the Wii's success, I think it'll do decently well just on the strength that you can buy it (if rumors are true). As a parent, I think I'm more likely to buy a Wii for $200 just to play whatever the next cool Mario game is, rather than to spend $4-500 (or more?!) for the competition. Heck, the Wii controller is the only interesting thing I've read about any of these units, and it's on the cheapest one...

  • Controllers from the Cube will work (Score:3, Interesting)

    by sherriw (794536) on Wednesday May 17 2006, @07:04AM (#15349722)
    Don't forget... I read somewhere that the GameCube controllers will work on the Wii. Talk about savings. That way I don't need to rush out and buy a bunch of controllers. Oh, and the Cube games will work on it too. Bonus. Sounds like Nintendo is ramping up for a winner. I have to say I hope to see stores start stocking more than 2 shelves of Nintendo games compared to a whole aisle of the other systems. As a Cube owner it's depressing to have poor selection, or see a commercial for a sweet game only to see the tag line: Only for PC, PS2 & Xbox. Game selection and price will be the KEY factors, not specs.
    • Apparently, the justification for this is coming from Sega VP, Scott Steinberg [forbes.com]. He believes that the Wii will launch at under $200 due to its far simpler hardware in comparison to the competition.

      Nintendo has always had a profit on all the consoles they've sold.

      I don't see why Nintendo couldn't sell at $200 and still make profit. My understanding is that the core hardware isn't that much different from the Gamecube. Sure, they might lose short term profits that they could have had, but it would be worth it
    • Why do you assume they can't make them for just under $200? This is, after all, little more than a refresh to the GameCube with an improved controller. You could almost argue that what Nintendo is really doing is more like how Sony re-released the PSOne to replace the original PS. Same hardware, just much cheaper to make. This time around, there is definitely some improvement...but nothing like the others are making. I imagine the yields on their CPU/GPUs are nearly perfect, plus everything is nice and
      • Um, we're seeing this misconception a [i]lot[/i] here. The Wii is not running on Gamecube hardware in a fancy white case. They didn't have IBM and ATI both design new custom chips for no goddamn reason, after all. The hardware is a good step up over the Gamecube, it's just that Nintendo is staying out of the dick-measuiring contest that Microsoft and Sony are getting themselves into.
        • I didn't say that, actually I very specifically said that there "was some improvement, just not as much as the others."

          What part of that statement is not true?

          It's not just that the Wii is slower than the 360 or PS3, it also doesn't have a lot of the modern features either of those have (it also doesn't have the incredibly convoluted PPU system they have either, but how difficult the hardware is to program for is another argument altogether). The GPU doesn't have pixel or vertex shader hardware, do you kno
    • As others have noted, the horsepower under the Wii, while a bit greater than the GC, is still no match for the 360 or Cell. In terms of pricing, that's probably a good thing for consumers. I highly doubt it'll sell for $300. The only folks who really want that are probably the Sony fanbois who will do anything to see the competition fail. :P (And I really don't understand the fanboi phenomenon anymore)

      My money is on $250.

    • Re:Wii = Gamecube 1.5 $200 upgrade (Score:4, Interesting)

      by edwdig (47888) on Tuesday May 16 2006, @07:20PM (#15347005) Homepage
      What capabilities does the Wii command that are unachievable on the GameCube today? I think nintendo is just releasing the obligatory new platform as a method to increase saturation of it's 'wiimote' controller. They should have just bundled the controller with whatever handful of games they plan to have it work with and called it a day.

      I think that was originally Nintendo's plan. A few years ago Nintendo was talking about coming out with a new accessory for the GameCube that would extend it's life for several years. They didn't really say much more about it after the initial mention.

      It looks like Nintendo realized that the GameCube just didn't sell well enough to make that strategy work. They realized that having a purple system as the focus of their advertising wasn't a good idea and helped contribute to the negative image of the GameCube. They decided they'd stand a better chance of success if they released a new system focused on the new controller rather than trying to sell it as a GameCube addon.

    • Wii = next-evolution in gaming for only $200 (Score:4, Insightful)

      by JackAxe (689361) on Tuesday May 16 2006, @08:41PM (#15347496)
      Why are you fretting so much about the Wii?

      Its CPU is basically a G5 from what I've read. And from personal experience, a 970 FX can easilly destroys the P3/Celeorn-hybrid found in the XBox and the Custom G3 found in the GC. Your "hardly comment" only goes to show how ignorant you are about these things. The Wii's GPU is at least 4 or 5 generations ahead of its predecessor, so that's going to make a big difference in performance. It's also pretty much guaranteed that the Wii will have a PPU. If this is the case, it will make a substantial difference in performance for 3D games, and free up the CPU to do other tasks. A dedicated PPU would be much faster than the software route the X360 and PS3 have taken.

      I found most of what you sated to be more inflammatory than instightful. But it's good that you pointed out the backwards compatibily. I know you were trying to use that to state your case, but it's one of the Wii's strengths and it's just another reason for me to buy one.

      The Wiimote isn't an afterthought like Sony's hack-job as an example, so all Wii games that can benefit from it, will support it. This is why the Wii is going to be great and you honestly can't deny you would love this sort of thing on your favorite console. You're only "trying" to spread "misinformation" by stating things like a "handfull of games." Like that's going to change anything, since Nintendo has a huge line up of Wii games, which are wiimote-friendly, which will be ready for launch. A bundled "main" controller won't have problems getting support from developers; Get real!

      Anway, most of your points can easilly be applied to the other consoles, since they're basically upgrades. They haven't changed gaming, they've only moved consoles up to the level of mid-ranged PCs when it comes to visual eye-candy. Nintendo's Wii is the only console that has brought something new to the plate and it has all the potentional to evovle gaming beyond the current state of same, which MS and Sony are moving forward with. An upgrade is better graphics and more power, not a whole new way to game, which only the Wii can offer.

      <]=)
        • Indeed, and in this case, we are comparing a 729MHz PowerPC 970FX (i.e. what Apple were calling the G5 and which, by some accounts, is a pretty killer chip) with a 700MHz Intel Celeron. No contest really. :P

          Still, it's certainly a valid observation that the jump between the GameCube's 485MHz chip and the Wii's 729MHz one is not particularly big - we shall have to wait and see whether that will matter. Personally, and given the pricing of Nintendo's previous offerings, I think it makes a $200 Wii a certain

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