How Unusual Was The 3DS Price Cut?

Many people in the gaming community were taken aback by Nintendo's announcement last night that the 3DS would be dropping price from $350 to $250 only five months after it's initial launch in America and after fewer than 900,000 units have sold in the US.

But that cut wasn't completely without precedent.

Nintendo's cut seemed unusually sudden. Let's look at some older systems: The original Game Boy was released in 1989 for $US120 (or $US90 without a game packaged in) and wasn't cut to $US50 until 1991, and even then it was to coincide with the launch of Sega's Game Gear. The original PlayStation launched for $US300 in 1995 and was cut to $US200 in mid-1996. The Nintendo 64 launched for $US200 in September 1996 and was cut to $US150 in early 1997, six months later. Those cuts were fast and deep, spurred by the competition's own launches and cuts.

What about less successful systems? The star-crossed Dreamcast waited until late 2000, a full year after its September 1999 launch, to cut its price to coincide with the release of the PS2. The Gamecube and the original Xbox both dropped in price in 2002, less than a year after release their releases in 2001. Those cuts were timed to coincide with the PlayStation 2's first cuts, as that Sony console was released a year earlier.

Unfortunately for Nintendo, the only other console that dropped in price so quickly after launch without any competition utilising similar cuts was Nintendo's last eye-popping experiment, the Virtual Boy. In August 1995 the Virtual Boy was released for $US180. After lacklustre software support and complaints of headaches the system was dropped to $US160 in October of 1995, only two months after launch. In May 1996, only seven months after the first price drop, Nintendo cut the Virtual Boy to $US100. By the end of the year the console was discontinued.

Nintendo's cut seemed unusually deep. A price cut of 32 per cent seems like an awful lot no matter how long after launch it is. The Nintendo 64, Gamecube and Dreamcast all dropped from $US200 to $US150 with their first price cuts, a 25 per cent drop. Some consoles had even smaller cuts, with the Game Boy Advance, the original DS and the Xbox 360 only dopping $US20 in their first price cut (although Xbox cut $US50 for a premium console, instead of the $US20 for a core bundle). However, it is not unheard of to see price cuts of over 30 per cent. The original PlayStation, the PlayStation 2 and the original Xbox all saw their prices go from $US300 to $US200 in the first price cut, a 33 per cent decrease. While the PS2 waited two years to cut it's price, the original PlayStation did it in eight months; the first Xbox cut its price by 33 per cent in six.

The original Xbox comes close to having performed the same quick, deep cut as Nintendo did with the 3DS, but that console was released in November of 2001 and took full advantage of of the holiday rush, only choosing to drop it's price the following May to keep up with the competition's price cuts and to bolster sales during a slow season, with extremely positive results. The 3DS came out in March and will be cut in August, selling at its highest price point during the slowest months for gaming.

So what does this all mean? The money taken off the price is hefty, although not unheard of. The timing, in the absence of an obvious direct competitor launching or slashing price, is unusual, fuel for the argument that Nintendo is reacting to non-traditional competition, such as Apple or even its own DS.

Looking at another handheld, the PSP had similar problems with sales out of the gate. People don't seem to like expensive handhelds, but Sony resisted cutting the price. In fact, a year after the PSP's launch Sony released a slimmed down "Core Pack" that left out accessaries such as the 32MB memory card, and sold it for $US200 compared to the original $US250 price tag. Even two years after launch Sony only reduced the Core Pack to $US170. So in reality it took them two years for any real price drop, and it was only a $US30 cut.

Nintendo has rejected the PSP's strategy and in favour of a a strategy closer to what the Virtual Boy, first PlayStation and Xbox did. However whether it's the Game Gear, Virtual Boy, or PSP any handheld priced too high at launch for consumers' tastes has been torched in the open market. Nintendo is attempting to backtrack to a time when they were still perceived to be the price conscious company that sold a $US90 Game Boy and launched the $US250 Wii, but so far the 3DS has some pretty nefarious company for console comparisons.


Comments

    Plus the Vita is on the horizon, it has to be a motivating factor. You really only need one handheld when you have a smart phone in your pocket also. Ninty needs to get a large install base of the 3DS quickly. Must say I am a little more tempted by it now, pity down under we are still ripped off and its not region free

    I guess they were expecting the Vita's launch price to be higher.

    The price has been the biggest sticking point for me so far. At $250 I'm considering it. Though I'll wait for the sales at christmas now as we all know we'll see it with cheap as games at that time.

    Could it be that its only slight variation from the previous version, with a 3D button that destroys the eyes of kids under the age of ten?

    Maybe the plan is to blind as many as possible so they cant see the class suits to file.

    A device marketed to kids, to make all their favourite Pokemons 3d like teh Avatarz, but they aren't allowed to push the magic button.

    Touche Ninty.
    Touche.

    Just because I'm surprised no-one else has said it yet:

    ITS OVER. NINTY IS FINISHED.

      Its only 10:15am & i've already heard the stupidest thing I'll no doubt hear all day!
      Cheers for the laugh:)

        And yeah im aware of the sarcasim! lol

        No worries.

        I was going to go with "More like Virtual3DBoyS, amirite?" but figured the other one was better.

    When I have OoT and MM on N64, what reason do I have to upgrade from my DSLite, regardless of price?

    No surprised! 3DS was over priced to start with. Now they price is more affordable, but the region locked is still there. Unless Ninty is willing to get rid of region locked, it will still be no purchase from me.

    I see 3 things why the 3DS hasn't been selling.

    1. 3D - as much as companies are pushing it on us in TVs, consoles and movies, it's just not selling. I work in retail and the amount of people we have come in wanting to buy a 3D TV or the 3DS because it's 3D is largely outweighed by people who just want a "normal" TV or want to play DS games "normally". I have no idea why Nintendo jumped on this bandwagon as I honestly think it'll fizzle out in due time.

    2. Games, or lack thereof. Apart from Zelda, I see no games I'm interested in. I'm not sure what must-have games are in the horizon, but at the moment it's hard for consumers to swallow $350 just to play Nintendogs 3D...

    3. Smart Phones/iPod Touch/iPad - People, myself included, seem to be investing in these all-in-one devices for portable quick gaming. And when you consider that you can get console-quality games for a mere $8(or less) compared to $70 on 3DS, then you can see why they've gained popularity.(I just purchased GTA Chinatown Wars for $2.99) Yes, most games aren't Zelda quality, but there are a few that rival "normal" games in quality and in gameplay length.

    So I can see why the 3DS isn't exactly flying off the shelves. Unfortunate for Nintendo. Personally I'll be getting one as soon as Mario and other iconic Nintendo games come out on it.

      1. The 3D is awesome on the 3DS, I'm suprised by the lukewarm reaction it has received.

      2. OOT, Resident Evil, Dead or Alive, Pilotwings, Ghost Recon and SSGIV are all decent games I have enjoyed on the 3DS in the early windows of it's release.

      3. I have an iPhone - I can't get into games on it - I just don't like sliding my fingers over glass as an interactive medium for games. Sure it works great for stuff like Angry Birds or Fruit Ninja, but the virtual thumbstick thing sucks.

    if you think about it, the price cut isnt that bad on Nintendo's end....
    I mean now theyre only making $10 profit per unit instead of $110 per unit....or something like that.

    now all they need to do is:
    remove the region locking,
    release some good games,
    drop the ridiculous price of the games,
    get their online store sorted (wheres all the hot classics? why the regional price discrepancies?),
    scrap the wii u,

    or they could just carry on obliviously and no doubt become the game dev that makes mario & zelda games for sony & microsoft.

    I wouldnt even want 3ds free. I'm done with Nintendo until they innovate with their games not their hardware.

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