Nintendo is “toast” — Pachter on Wii U pricing

Here at TVGB, we have some varying opinions on how much success Nintendo will have with the Wii U when the console is released later this year. Industry analyst Michael Pachter certainly has his own thoughts on how the system will be received.

At a videogame marketing event in San Francisco, Pachter let it be known in his keynote address that he thinks Nintendo is doomed. “I think the idea that we don’t know the price point yet, but we do know what the console is, is just sad. I think they’ve completely blown that,” he said, “[Wii U is] gonna launch at $249; because it has to. They’re dead if they launch at $259, I think they’re toast then. I think they’re toast anyway.”

The reason that Nintendo is toast anyway is that in Pachter’s opinion an Xbox 360+Kinect bundle will be priced below $249 by the time of the Wii U launch. Right now, a 4GB Xbox 360 with Kinect is going for around $300, so that assertion does make sense.

Pachter also noted that he believes price will be more important than ever for the next generation of consoles, because there is only so much more that can be done from a technology standpoint. “Price I think is everything,” he said, “because I don’t think features matter that much.”

The comments caused quite a stir, prompting Pachter to explain his views further (via): “I believe (and please feel free to disagree) that a large portion of the Wii audience comprised casual gamers–those who bought one or two games a year the first two years, then put the Wii aside–and that those casual gamers moved on to another platform. The ‘other’ platform may have been Facebook games, smart phone games, tablet games, or one of the other consoles, but once they moved on, they are not likely to come back.

“At the same time, I believe (again, please feel free to disagree) that the growth of smart phones and tablets has attracted many potential dedicated handheld game customers, and these people also are unlikely to come back to either 3DS or PS Vita. Summing this up, I think the addressable market for the Wii U is around half of the market for the Wii, and I think Microsoft and Sony will compete for a portion of that market if the Wii U is priced too high. I think that the dedicated handheld market is permanently impacted by smart phones and tablets, and think that Nintendo’s addressable market is probably also half of its former market.”

Nintendo is expected to price the system at E3 this summer.