Surely you must have seen this coming.
A hungry and desperate Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) is cutting the price of its slow-selling Wii U console.
The price of the deluxe Wii U system will be getting a $50 haircut to $299. This isn’t a surprise. I expected this to happen earlier this summer, and it became a no-brainer after Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) revealed that it shipped just 160,000 units in its most recent quarter.
With Sony Corporation (ADR) (NYSE:SNE) and Microsoft Corporation (NASDAQ:MSFT) hitting the market with new systems in November, Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) was either going to have to cut prices or back out of the console market and focus on its more popular handheld offerings.
This is the second time that Microsoft Corporation (NASDAQ:MSFT) sees a rival introduce a lower price, and we’re still three months away from the Xbox One hitting the market.
It was back in June when Microsoft Corporation (NASDAQ:MSFT) introduced a $499 price point for its upcoming Xbox One system. Sony Corporation (ADR) (NYSE:SNE) fired back a day later by pricing its rival PS4 console at just $399. Now we have Nintendo Co., Ltd (ADR) (OTCBB:NTDOY)’s Wii U at $299, making this an interesting dilemma for gamers that can only afford one system this holiday season.
Die-hard gamers will argue that the Wii U is no match for the powerful PS4 and Xbox One systems, but Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) does arm its platform with proprietary franchises. If you want to play Zelda, Pokemon, or Super Mario, you’re going to have to go through Nintendo.
Arguing that the $499 Xbox One doesn’t have to worry about Nintendo’s Wii U going from $349 to $299 misses the point. The iPad at $499 didn’t think it had a problem with cheaper tablets until it had no choice but to introduce the iPad mini at a competitive price.
Besides, what makes anyone think that Nintendo will sell enough Wii U systems this year at the new price point that it won’t have to slash prices again after the holidays?
Nintendo naturally doesn’t want that. It has historically been the lone console maker that doesn’t sell its systems at a loss. It may also believe that a lower price point and far more games on the market than it had during last November’s debut will win over gamers that bypassed the Wii U in its rookie season.
The console wars were never going to be boring this year, but they just got a little more interesting.
The article Nintendo Punks Microsoft and Sony originally appeared on Fool.com and is written by Rick Munarriz.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.
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