If Engadget’s “trusted source” is correct in predicting that Nintendo are set to reduce the price of the Wii to $150 on May 15th, analysts are predicting that the company is readying a new console announcement for E3 2011.
“Most video game companies withhold their biggest announcements until E3 and if Nintendo chooses to announce a Wii price drop before their E3 press conference, they must have something much bigger to announce,” commented EEDAR analyst Jesse Divnich to Industry Gamers. “There are very few announcements that would eclipse a hardware price cut.”
M2 Research analyst Billy Pidgeon agrees with such a statement, expressing “Wii is certainly due for a price cut, which would be good for Nintendo and for retailers. A Q2 price cut announcement would typically be an E3 event, so scheduling a cut before E3 would clear the boards for another, bigger announcement. A new console would be pretty exciting, but it’s a lot riskier for a vendor with a large active installed base to launch next generation and keep last generation’s base active while the other vendors are still building out. Next generation timing and strategy is going to be interesting.”
However Michael Pachter of Wedbush Securities, who has long been an advocate that Nintendo should have released a Wii HD already, has casted a spell of doubt over the Engadget report. He explained, “There is no way that anyone outside of Nintendo Japan would know about this until print ads have to be submitted for retailers, probably at most three weeks prior to the cut. I don’t believe that the source is right.”
“With that said, I think a cut in September is likely, unless Microsoft cuts earlier,” Pachter continued. “Nintendo will not lead price cutting, Wii is still selling pretty well (close to 1 million a month), so why cut profits until sales drop below 500,000 a month? I don’t see it.”