Friday, September 25, 2009

Nintendo insists: Wii UK price is lower - but you might not benefit

Nintendo Wii

Nintendo UK says that it has cut prices for the Wii, just as has been done in the US - but that it's up to retailers whether you'll actually see that difference when you come to hand your cash over.

Following the news of big price cuts in Japan and the US - the price of the machine would fall by ¥5,000 (£33) in Japan and drop from $249 (£152) to $199 in America - Nintendo UK has insisted that over here the price has also fallen, though it will not say by how much.

A Nintendo spokesperson told the Guardian:

Unfortunately I cannot disclose the Wii trade price to you - it is a confidential figure shared only between Nintendo and retailers - just in the same way Apple and Sony will not disclose their trade prices if were to ring them up today and ask.

But, the spokesperson insists,

We ARE lowering the cost price of Wii to retailers in the UK. If retailers do not decide to pass that saving onto consumers - we cannot be blamed for that - but we have lowered the price.

Under EU Anti-Competition law, of course, Nintendo cannot set the retail price. It can offer the SRP - suggested retail price - but under laws passed some years ago, it cannot set the final price. This allows retailers to compete on price with each other, and to come up with different ways to market things. (In general, it's a good thing.)

As a rule of thumb, the trade price for most goods is about 40% of the retail price. (If you don't know that, you haven't been watching The Apprentice closely enough.) If the Wii retail price been cut by $50 and ¥5,000 in Japan, should we expect - given the way that goods so often seem to have a unitary dollar-pound conversion rate - that the Wii's £199 price will fall by £50? Or is the $50 price fall in the US indicative of a wholesale price fall of $20?

It's interesting that Nintendo has managed to drop the price to retailers, and Japanese companies have been suffering from the effects of the yen's rise, which has effectively cut their profits from overseas sales - hence the price rise (from £179 to £199) earlier this year.

Let us know if you see the Wii falling in price. Perhaps a pricetracker would work...