Summary
Evidence that Nintendo is going to drop the price of the Wii has surfaced. While the video game business has suffered in the recession, now all three consoles will be at lower prices for the fall. Expect increased sales of major game titles as new consumers get new systems.
Analysis
Sony and Microsoft dropped the prices of their video game consoles last month, and at the time Nintendo postured that they had no need to respond, keeping the price of the Wii the same as it has been since the system launched. However, in the past, the race between the leaders in the video game space has always been decided by total installed base, so price cuts are inevitable during the life of the systems.
It's hard to keep a secret these days. A slightly blurry picture of a Toys R Us flyer has appeared on a gaming blog, showing a new price for the Wii of $199.00, and that's not for a stripped-down system - it includes Wii Sports, a terrific title for new owners of the system.
Sales of all video game consoles have been affected by the recession, as well as sales of major titles such as Madden Football. Recently, numbers from Electronic Arts came to light that show that Madden, at this point, is behind sales volume compared to last year. With the lower price points of all systems, I'd expect to see Madden sales trend upwards later this year. And upcoming major titles will be helped too - the release of Call of Duty: Modern Warfare 2 from Activision is Nov. 10. It should be a huge launch.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
