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Why the 3DS Price Drop Isn’t As Desperate As It Looks
Nintendo shocked the world yesterday when they announced a new price tag for the 3DS. The announcement will drop the handheld’s MSRP to $169.99 on August 12, a cut of $80. Slashing 32% from the system’s retail price is great news for gamers, but it’s being seen as a desperation move by many.
Or is it?
The $250 Price Was Exactly What Analysts Wanted
In the wake of Wii-mania, financial analysts chastised Nintendo for pricing the Wii so cheaply. The insane demand for the Wii caused people to camp out at stores week after week hoping to purchase the elusive white box that the Sunday advertisements promised would be in stock. Many of these systems later ended up on eBay where they commanded a premium of 300, 400, or even 500 dollars.
Analysts claimed that Nintendo’s pricing strategy left money on the table… money that was picked up by eBay sellers. Perhaps the 3DS’ initially high price was a response to those analysts. I realize the 3DS’ original price was a direct response to the system’s production cost, but Nintendo is not totally averse to selling a system at a lost. They just don’t like to. But after selling as many systems as they can at $250, the price cut now reflects the real retail value of the 3DS.
With the DS still going strong, Nintendo thought they could price the 3DS a little higher than they might otherwise have, hoping to catch lightning in a bottle twice.
First 3DS Price Drop: August 2011
First DS Price Drop: August 2005
Granted, the DS was available in stores for almost a full year before its August 2005 price drop, but the timing is suspiciously similar and makes the 3DS’ price cut feel like it was part of the plan all along. It even lends a little credence to the rumors that Nintendo could have released the 3DS in late 2010, but didn’t because production couldn’t ramp up fast enough.
But what we do know for sure is that Nintendo loves to drop the price of their products in the Summer. The Wii received a price cut in Summer 2009 and again this May, as did the DS Lite. A further pattern emerges where a Summer price drop is always followed by an avalanche of games featuring The Big N’s biggest franchises…
A Murderer’s Row of Holiday Titles
Just take a look at the 3DS’ Fall/Winter lineup from Nintendo. Star Fox 64 3D leads things off in September. Super Mario 3D Land goes next in November. Mario Kart 7 crosses the finish line in December. Finally, Kid Icarus: Uprising will get slotted in there somewhere as a “holiday season” release.
Whether you’re a Nintendo fan or not, at least one game in that lineup should tickle the “I want it!” bone of every gamer out there. And the new lower price of entry makes it less of a hit to buy more than one of those games.
A Price Cut Will Fight the “3D is Bad For You!” Crowd
With the recent release of the HTC Evo 3D, the 3DS is no longer the only “glasses-free” 3D device on the market. But the general public is still a little weary about exposing their eyes to the handheld’s screen, and there was even a “customer concern” that pulled the 3DS from Amazon for a few hours earlier this week. The only way to combat these concerns is to make “glasses-free” 3D devices accepted by the mainstream. And the best way to do that is to make the 3DS a mainstream-priced device.
It’s Cheaper Than the PlayStation Vita
But all of these reasons are really dancing around the obvious. In one fell swoop, Nintendo has made the 3DS significantly cheaper than the PlayStation Vita (which will retail at $249.99 for the Wi-Fi version and $299.99 for the 3G version). That kind of substantial price advantage will go a long way in deciding which handheld sits under the tree this Christmas.
And for that reason, cutting the price of the 3DS doesn’t look so desperate. Of course, maybe it was a complete desperation move. Who knows? But it may be remembered by history as the genius move that buried another Sony handheld.
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