Pachter Predicts Wii U Price Cut in 2013

A CVG post reports that industry analyst Michael Pachter has made something of a bold prediction: within hours of Nintendo announcing the $300/$350 price tag for their Wii U console, Pachter has said that the system will see a price cut by mid-2013.

Said Pachter, an analyst for Wedbush who specializes in the video game field:

“We think that Wii U’s price points are appropriate given likely demand from Nintendo’s core fanbase, but believe that pricing will be too high to sustain demand given current competition from other consoles and tablets.

In our view, Nintendo was smart to introduce the Wii U at higher price points in order to maximize initial sales from its core audience. We expect 1 – 1.5 million Wii U units to be shipped into the US by the end of GameStop’s fiscal year (January).

We expect demand from Nintendo’s core fan base to remain high through the end of its March 31 fiscal year. Once initial demand begins to subside, we expect Nintendo to lower prices.

We don’t expect a price cut until summer 2013, at the earliest, but do expect a cut prior to holiday 2013. Any prospective price cut will depend largely on competition, which we expect to materialize in the coming weeks.”

While on the surface it may seem like a tough assertion to back up, when you think about it, Pachter probably has a lot of sound logic behind his prediction. The Wii U is the first next-generation console to come out as the current-generation winds down. The conventional wisdom is that Microsoft and Sony will unveil their new consoles in time for the holiday season of 2013. By getting the Wii U out now, when the only competition is, effectively, a system that will be more or less obsolete by next year, Nintendo will be able to take advantage of a market looking for the next big thing.

Not only that, it’s likely that Nintendo’s not selling the Wii U at a loss, especially considering the fact that the Wii U is regarded as offering gamers hardware capabilities more on par with Microsoft and Sony’s current crop of systems. So even if the profit line is marginal, as long as there is a profit, it’s gravy. By this time next year, component prices will fall, and gamers might be facing something of a sticker shock from the next Xbox and PlayStation’s likely high price tag (I predict somewhere in the neighborhood of $400 at launch, minimum).

I think in an effort to stay competitive and to keep momentum rolling, it wouldn’t be too terribly shocking for Nintendo to undercut their competition with a price drop next year. That said, it is still very early, and anything could happen. If the Wii U is as popular as the Wii was during its launch, Nintendo may want to just ride that wave for as long as it can. The next year or so should be very interesting.

What do you think? Right on the money…or full of hot air?

Via CVG