Portable pricing profounds Pachter

Pachter: Nintendo will regret low 3DS price (Destructoid)

“Pac Attack” is at it again, poo-pooing Nintendo; and after calling on Nintendo to cut the price of the Wii several times, now he thinks the 3DS price is too low.

The 3DS is a box that plays video games, whether it’s at launch, or years down the road, the 3DS will always be just a box that plays video games; therefore, the value of the 3DS won’t change, and thus the price shouldn’t change.   If anything, the price should go up, since more time means more games on the market, means more value; at launch it’s just the launch titles and the promise of more to come.   For Nintendo, the 3Ds is just a bunch of chips on a motherboard connected to two screens, some buttons, and a battery; they are the ones who have to consider the cost of the technology, not us.  This looks like the strategy Nintendo is following: sell the 3DS at a fair price from the start, which doesn’t change over time just because the technology gets older.

The line of thinking that the final price should be determined by the cost of the parts is a very PC way of thinking, because that’s what PCs are, a lump of parts, and PC buyers will often replace parts, which means they have to buy the parts themselves.  With consoles, the price drops were the result of competition.  Over time, the costs of the parts would come down, allowing the hardware companies to pocket more money on the console; but with competition, they would look for any advantage over rivals, and a price cut was an easy way to get a leg up on the competition, which forced those competitors to use the cost saving from older technology and cut their own prices as well.

With Nintendo working to differentiate their consoles and handhelds from the competition, price cuts are meaningless.  If gamers want a DS, Wii or 3DS, then they want a DS, Wii or 3DS, a competitor’s product is not even considered; so a price cut doesn’t work, as it just becomes a less expensive thing that the gamer still doesn’t want.  With no price war, Nintendo can keep the prices stable, and have it match the value, rather than the cost of the parts.

At least he predicts the 3DS will outsell the (rumoured) PSP2, at this point, I see no reason why the PSP2 would come out on top, as it sounds like a repeat of the last generation, only with third parties shifting focus towards Nintendo, which makes it worse for Sony.  We’ll see if Sony does something really special with it, or if it really will be the same old curb stomp battle.

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