An article on GamesIndustry this morning dives deep into the Wii U?s launch from this past weekend, assessing the console?s performance, and the reactions of the video game press across the internet. The long and the short of it is that most reviewers have given the system praise, while noting that, amid technical hiccups on launch day, there is still a long way to go before it can be considered a sure thing.
The article?s a great read and definitely worth your time, but let?s focus on one particular bit of news it drops: Toys R Us and Target are both running sales on Wii U software, with buy-one-get-one at 40 percent off at the former, and buy-two-get-one at 50 percent off at the latter. It?s pointed out that this is the first time retailers have started slashing prices on software immediately after a major system?s launch. That fact, combined with the mixed reactions the console has gotten from reviewers, could be interpreted as a lack of faith in the Wii U platform.
Interestingly, analysts quoted in the piece seem to believe that the price-cuts are actually due to the retailers? shaky positions this holiday season, and the fact that the Wii U itself is reported to be mostly sold out throughout the United States. The discounts themselves will result in a loss of revenue for the retailers, but will get shoppers to the store, where they may pick up more accessories for the system, as well as do the rest of their holiday shopping.
Scott Steinberg of TechSavvy Global offered his diagnosis:
?It?s going to be a tough retail season, and given? the increasing Black-Friday driven shopping culture, this is a tactic designed to ensure that the store in question is the primary shopping source for the Wii U. If they get you in the door to buy Wii U software at a discount, chances are you?re going to do all your Wii U shopping at that specific retailer.
This is certainly a first in history, and it points to the state of the retail and set-top console market. In the past you would never see retailers discounting premium launch software for a console system. In most cases it?s an opportunity to mark prices up. But I struggle to remember the last time a console launch had so much software available.?
Wedbush Securities analyst, Michael Pachter, concurred with Steinberg?s assessment, an interesting twist considering that Pachter?s been very critical of Nintendo?s retail strategies in recent years:
?Keep in mind that they don?t have many Wii U hardware units, and that the total shipped to the US is probably well under 1 million for the launch, so their risk is that they sell 100,000 or so titles at no profit. It?s a loss leader to drive traffic. I don?t think it?s a signal about the health of console sales at all.?
It?s also no secret that retailers are clearly getting more and more desperate to lure shoppers into their stores. Every year, digital shopping becomes easier and more ubiquitous, meaning there?s less foot traffic in brick-and-mortar stores. Worse for retailers, many consumers simply go to stores to do price comparisons, and because online retailers have much lower overhead costs than actual stores with actual employees, online usually winds up winning customers? dollars.
And then there?s Black Friday?or should I call it Almost-Black-Friday, since at many retailers, it begins at around 7 or 8 p.m. on Thanksgiving. As fewer people buy big-ticket items during the year?since they?re waiting for huge markdowns during Black Friday?retailers look to make up all their lost revenue during this increasingly retail-focused holiday. In short, retailers are doing everything they can to get you into their stores, and slashing prices on the hot new console?s games seems like a pretty effective strategy to me?
Now, if you?ll excuse me, I have to get to Toys R Us and buy a buttload of games.
Via GamesIndustry
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