Wii price to rise for UK trade
Nintendo "reluctantly" ups price of hardware due to depreciation of pound
Nintendo has said that it is to raise the price of the Wii in the UK due to the depreciation of the pound.
The system has a recommended retail price of GBP 179.99 in the region, and with a price hike of around GBP 18 – 20, will put considerable pressure on retailers' margin.
"Due to the severe and continuing depreciation of the pound, we are, unfortunately, having to raise our trade price to UK retailers of Wii hardware," said the company. "The price that they then offer to consumers is, of course, up to the retailers."
"We are only – reluctantly – raising our trade price now to retailers due to unprecedented and sustained depreciation of the pound. This is a problem brought about by extreme currency fluctuations that are a symptom of the global economic situation," said Nintendo.
Major retailers such as GAME, Gamestation, HMV and the supermarkets often offer bundled software deals in-store to increase margins on hardware.
First up, while Sony and Microsoft will have been working hard to bring down the cost of manufacturing their consoles in order to try and pass on price cuts to the consumer, Nintendo's always made a profit on its hardware and was the only one of the three platform holders to have the luxury of choosing its price from the start.
However, while you might therefore think this would enable Nintendo - with its strong cash position from stellar sales in the past two years - to bear the brunt of the strengthening yen, you should remember that the company's stock has been hit severely in the last year.
If Nintendo leaves the price as-is, it will impact its financial statement more severely, and suddenly the company that can do no wrong doesn't look so good - despite the fact that it is, in fact, doing no wrong...
On the other hand, if it raises the trade price slightly, it's probably a price point that its consuming market - a decent wedge of which is over 30 - still won't baulk at paying... assuming retail passes all of it on.
The whole stock price part of it might not make much sense, but it's very real to the people making fiscal decisions in Tokyo, and there's a huge element of needing to be seen to do something about it as much as actually doing anything.
I for one would be very surprised if the new hardware and software price points have any real impact on the current trends. And in the bigger picture, any losses there are likely to be offset by the release of the DSi.
I don't think this is going to start a trend so much as simply indicating that price cuts for the other consoles may not be happening anytime soon - at least in the UK.