Gaming GameCube drops to $99

[Magnum Apex]

[font=trebuchet ms][url]http://www.gamespot.com/all/news/news_6075612.html[/url][/font]

[font=arial][size=3][b]Oft-rumored price drop now a reality. Number three console manufacturer enters the Q4 race running. What's up for Xbox, PS2?[/b]

Retail partners Amazon.com and Toys "R" Us have taken the first step in heating up the fourth quarter videogame business.

The online retailers are now offering the jet black- and indigo-colored GameCube at a margin-busting price of [url="http://www.amazon.com/exec/obidos/tg/detail/-/B00005QEFD/002-4146340-9062404?"][u]$99.99[/u][/url].

Senior analyst Billy Pidgeon of the Zelos Group commented on the price drop saying, "If you're going to sell the GameCube for under $149, you're losing money...they're throwing their margin away, basically dumping them."

There is no indication that this price drop is the result of a renegotiation between the retailer and either the manufacturer or distributor.

As far as Sony and Microsoft are concerned, Pidgeon says Sony is likely to be unfazed by the price drop. However, Pidgeon says, "Microsoft should care. They could lose the number two position, which is very important for Microsoft [to maintain]."

Pidgeon added the price drop will certainly have impact on fourth quarter retail sales, but that competitive price drops across the board would be required to see substantial increases to anticipated Q4 sales.

Pidgeon said, "Fourth quarter is the perfect time to use a price cut. It would really energize the market if there were price cuts this quarter."

By Curt Feldman, [url="http://www.gamespot.com/"][u][i]GameSpot[/i][/u][/url] [size=1][POSTED: 09/23/03 01:09 PM][/size] [/size][/font]

[Shinmaru]

I agree with what the analyst said. I'm not too sure about how much it costs to mass produce and ship GameCubes (if someone could fill me in with the details, that'd be nice), but I'm not too sure about how Nintendo can turn a profit selling GameCubes at $99 a pop. I could be wrong, though, but right now, I'm not too sure about the strategy. Just seems like a last-ditch effort to reclaim the second place position before they start gearing up for their next console.

[Semjaza]

Few companies have ever turned a profit on consoles as it is. Nintendo was the only one that was making a profit since launch. If they even lose any money, it wouldn't be much.

They have a stockpile of about 3 million manufactured GCNs as it is. They might as well get them out quickly and make it up with game sales and licensing royalties like they normally do.

On top of that, when it drops to $99... there won't be a free game anymore. So basically, you're not getting anything different. $150 with a game or $100 without. Considering that, I doubt it would affect their profit margins much anyway... and since this is a move to up the size of their user base, if it is successful they'd get it all back anyway.

I dislike these analysts and these type of reports. They generally aren't very factual as it is, so I have to wonder how expert these experts really are. This is one of the best ones I've seen in awhile, actually.

In any case, I don't know why someone wouldn't want a GC for only $99.

[James]

[color=#707875]I agree with Tony.

First and foremost, Sony and Microsoft were bleeding money when it came to hardware. Sony has only recently begun to recoup hardware manufacturing costs with hardware sales. Microsoft is still projected to lose around $5 billion on Xbox, regardless of any software profits.

In terms of Nintendo, they've been making profit on each GameCube unit sold, since the machine launched. Moreover, Nintendo has three consoles on the market right now -- GCN, GBA and GBA SP. Let's bear in mind that GBA SP is outselling PlayStation 2 in Japan. And moreover, GBA SP has been the highest selling video game console since its launch. Even the GBA itself is still selling strongly.

And Nintendo is profitable with both of those machines, not including software revenues.

So this doesn't signal "dumping" or anything like that. These analysts rarely know anything about the video game industry.

Nintendo can afford to push GameCube out at this price. It has the software to support that price at this stage. And with games like Mario Kart coming up at the end of the year...Nintendo's putting itself in a strong position, especially if you include the GBA SP.[/color]

[Gohan Egret]

Yes! Finally! Now I can go ahead and purchase MGS: TTS for $40 and RE4 (whenever that comes out). I did not like any of the games (well, RE0, but, I think it is $20 now) that came with the offer (SF:A and MP4 are not my thing...Metroid Prime? *Shrugs*), and I have been eyeing MGS: TTS since its annoucement, so this is a good day for me.

[terra]

Man. This is making me really really want to buy a Gamecube. Particularly Mariokart [drools slightly]. Although I think I read some reviews on it and it's not supposed to be that good? Perhaps I'm thinking of another racing game, though.

Anyway, to get back on topic, I too have heard most of those companies generally lose money on the hardware and make it back on the games. I've especially heard this is a problem for XBox ... hm, exactly like James just said. I think Microsoft was more interested in capturing the gaming market for the future rather than really worrying about making money right now.

[Semjaza]

In regards to Mario Kart: Double Dash... it had problems. Nintendo always stressed that they would be addressed, but people complained about them anyway. IGN in particular.

However, in the latest build that was shown off in Europe, the concerns were taken care of. The biggest complaint was the speed, which was fixed completely according to IGNCube. They seem very optimistic about it now, which is always a good thing.

Anyway, there's that answer lol.

[James]

[color=#707875]Yep. Mario Kart has come a long way.

But even back at E3...I remember a couple of fellow N-S staffers saying that the game was a great deal of fun.

The new battle modes look [i]awesome[/i]. Battle Mode was one of the most fun parts of the older games, and MK:DD really puts a bigger focus on that aspect. Couple it with LAN play, and you've got yourself probably the best party game to ever hit the face of the Earth. ~_^

[/pr mode][/color]

[Semjaza]

From what I'm reading around... It sounds more like this is a move on TRU's part and not Nintendo's. Which would mean the MSRP for GCN's still is at $150 and they're trying to clear out overstock, which is rather likely considering the amounts that Nintendo already has manufactured and unsold so far.

[Desbreko]

[QUOTE][i]Originally posted by Semjaza Azazel [/i]
[B]From what I'm reading around... It sounds more like this is a move on TRU's part and not Nintendo's. Which would mean the MSRP for GCN's still is at $150 and they're trying to clear out overstock, which is rather likely considering the amounts that Nintendo already has manufactured and unsold so far. [/B][/QUOTE]
[color=indigo]No, this is from Nintendo, not just Toys R Us. It's been announced on [url=http://www.nintendo.com/news/news_articles.jsp?articleID=9014]Nintendo.com[/url] that the new MSRP is $99. *wonders once again why no one ever goes to Nintendo.com for news*[/color]

[quote]REDMOND, Wash., Sept. 24, 2003 ? Just in time for the biggest video game thrills of the fall, Nintendo of America Inc. today announced a new MSRP of $99.99 for its Nintendo GameCube home game console, effective tomorrow, Sept. 25. This great new price opens an $80 price advantage over its two console competitors.[/quote]
[color=indigo]You know, this means you can get a GCN for the same price as a GBASP. Is it just me, or does it seem weird to anyone else that a current console costs the same amount as a current handheld? :cross:[/color]

[Semjaza]

They hadn't even announced that yet when I replied lol. The press release from them was issued today, I believe... Yeah, September 24th -- today.

You can get a GBA SP and a GCN for the same price as a PS2. Not bad, I'd say.

[Shinmaru]

Heh, not bad at all, I'd say. I always end up buying systems in the earlygoings and not being able to take advantage of the better deals later on in the systems life.

Now that I have more information on the subject, I can see how this would benefit Nintendo (especially since I conviently forgot about their money and GameCube stockpiles >_<). GameCube does have a great gaming library and people who were on the fence about buying one will probably go after it now.

As for Mario Kart, it's still one of the many games that I have my eye on right now. I can't wait to test out the two-player mechanics of the game. Oh, the possibilites will be endless, I can assure you.

[Syk3]

While not going into Nintendo sale factors and shipping costs and such, as I admittidly do not have any knowledge in those areas, I can tell you Toys R Us and Amazon might possibly be getting more money by lowering the GameCube's price down to $99. Unless someone is aiming towards buying a greatest hit game (or whatever they call it on GCN) for $20, they will still be forking over $150 just for one game along with the system, and that's not even including the purchase of a mandatory memory card that came free with the previous $150 bundle.

Looks to me like a cheap sales gimmick to trick consumers into paying more for the previous bundle. It is interesting, however, that with $100, you may be deciding on whether to get a GameCube or a GameBoy Advance SP, heh.

[James]

[color=#707875]I'm not sure if Nintendo will have any bundles occurring over the Christmas holidays...unless you're talking about Toys R Us bundles.

It was Nintendo who chose to drop the price though; they've also done it in Australia. It's an aggressive move to push sales up over the holiday period.[/color]

[Semjaza]

All of Europe finally got a drop to 99 Euros as well. Or so I hear.

I don't know what is going on with Japan's pricing... but I do know that Pokemon Colliseum and Mario Kart are being released on the same day in an effort to spike sales. This Christmas is pretty important for Nintendo.

[url]http://story.news.yahoo.com/news?tmpl=story&u=/nm/20031002/tc_nm/tech_nintendo_gamecube_dc_1[/url]

[quote]SEATTLE (Reuters) - Sales of Nintendo (news - web sites). Co. Ltd.'s 7974.OS GameCube video game machine quadrupled in the first week after it slashed the U.S. price of the console of $99, the U.S. arm of the Japanese video game company, said on Thursday.



Nintendo, which cut the price of the GameCube on Sept. 24, said it sold 61,000 consoles during the week following the price cut, up from weekly average sales of 15,000 during August and September.


"I think it will be sustained (until the Holiday season)," George Harrison, Nintendo of America senior vice president of marketing, told Reuters.


Nintendo said in a statement that more than 100 new titles will be available before the end of the year.


Nintendo's price cut made the GameCube $80 cheaper than its two competitors, Sony Corp (NYSE:SNE - news) (news - web sites).'s market-leading PlayStation 2 (news - web sites) and Microsoft Corp.'s second-place Xbox (news - web sites), both of which start at $179.[/quote]

Not bad for a week heh.

I know I said its not really a difference from the free game deal in price... but there is a psychology to it. Cheaper automatically just seems more desirable to people around here.

[Desbreko]

[color=indigo]That, and you get to pick the game you get with the system now. Also, I've been seeing a few of the games that were in the bundle pack selling for less than $50 now. (I've seen MP4, SFA, and MP going for $30). So it really is a better deal, just not [i]that[/i] much better.

And yeah, I'd say quadrupling their sales isn't bad at all. One of Nintendo's themes has always seemed to be affordability, and it seems to be paying off.[/color]