Why are Nintendo games so expensive?

[Sheikah]

It's called supply and demand. First party Nintendo games tend to hold their price because the demand for them remains high throughout the life of a console. Just look at games like Wii Sports Resort, Mario Kart Wii, NSMB Wii and Wii Fit - all of those games continued to sell strongly years after their release - hence high prices.

 

Very few other games do this, in fact most other games have strong opening weeks and then fade to virtually nothing (the big exceptions being COD and FIFA - two other games that hold their price).

 

Simple answer really.

 

There's no such thing as a natural supply and demand when it comes to digital content (which really, discs/cartridges still are).

 

It's not like you have a finite amount of an incredibly sought out resource; if supply of game copies only just meets demand it's because Nintendo engineered it to be that way. I agree with Rummy; they take an approach similar to Disney in that they aim to create an air of quality by tightly controlling copy numbers. I think it's a bit of a shame for the consumer as they have to pay more, for games that aren't necessarily better than 3rd party titles.

[Cube]

Typically, Nintendo games have very long shelf lives. They sell over a longer period of time.

[Hogge]

I have always wondered this. Games like Mario Kart 7 and Ocarina of Time 3DS (itself a remake of an old game) are still typically over £30 despite being a few years old. Just comparing this to other consoles, within a year games have usually dropped to half price, or even less. To me this represents poor value for money, and often seems to be overlooked by people who think Nintendo offers the affordable solution.

 

 

Anyway, thoughts?

 

The answer is simple. Most game companies make most of their sales over the first few months. For example, Blur was considered a flop and the developer was shut down only a few months after the game had been released.

Nintendo games sell quite slowly, but evenly over several years. On the N64, Goldeneye still sold fairly well even after the Gamecube had been unveiled.

 

So Call of Duty is cut in price after a certain ammount of time to boost sales. Nintendo don't need to boost sales and thus don't drop prices.

[S.C.G]

So Call of Duty is cut in price after a certain amount of time to boost sales. Nintendo don't need to boost sales and thus don't drop prices.

 

Amusingly though, you can get Call of Duty very cheaply on release in some places such as Tesco... very cheaply if you're 'clever' about it - even though I know there's nothing clever about COD really - but this is what I do most years...

 

COD is £5 deposit, wait until it's a £5 off £40 voucher week, effectively £5 pre-order costs nothing

On release date game is 'Only £25 when you buy a 2100 MS point card/£25 PSN'

So the game goes down to £25, less the £5 deposit and (for me) 10% staff discount = COD for effectively £18!

 

For most Nintendo games though, it's just a case of I'll buy them full price on release because unlike COD they are actually worth paying the full RRP, besides... Pikmin 3 was only around £30 on release which is pretty good.

[Zechs Merquise]

There's no such thing as a natural supply and demand when it comes to digital content (which really, discs/cartridges still are).

 

It's not like you have a finite amount of an incredibly sought out resource; if supply of game copies only just meets demand it's because Nintendo engineered it to be that way. I agree with Rummy; they take an approach similar to Disney in that they aim to create an air of quality by tightly controlling copy numbers. I think it's a bit of a shame for the consumer as they have to pay more, for games that aren't necessarily better than 3rd party titles.

 

Discs and cartridges aren't digital content. They have a physical value attached to them. They're not like a download from Steam or iTunes. But supply and demand still works in the world of digital content, if you have a digital release that is extremely popular and demand is such that people will pay $30 for it, why would you sell it at $5 - even though supply is genuinely unlimited ?

 

The fact is simple, the games remain in high demand for a long time after they have been released and continue to sell well years after release. Hence prices don't fall. Price fall for other games because the typical sales pattern for games is a huge spike which tails of quickly and falls to virtually zero.

 

Games like Mario Kart never seem to have the huge opening weekends enjoyed by other franchises, but they show what is known as 'legs'. In other words they keep selling. Hence due to the continued demand, prices don't fall.

 

Take Mario Kart Wii and NSMB Wii which both outsold the latest Tomb Raider game in worldwide sales last week. Mario Kart Wii has enjoyed 276 weeks in the charts, Tomb Raider has enjoyed just 20. Tomb Raider has sold around 2.5 million units across the PS3 and 360, Mario Kart Wii has sold 34 million units. Hence why the price of games like Mario Kart still remain so high.

 

See, if there's demand for something price remains high! How such a simple concept is lost on you is beyond me.

[Sheikah]

What? What do you think is stored on those cartridges? It's still digital content - they can easily mass produce them quickly at minimal cost and there's no limit to how many they can make. Plus a lot of the games are available digitally too. Anyway, that's beside the point.

 

It's not real supply and demand. A supply and demand situation would be houses for sale in a prime location, for instance. There are only so many houses available for sale in a particular place, and lots of people wanting to live there. So the seller can charge a premium - demand outstrips supply. And the reverse situation could also be possible.

 

Supply and demand situations effectively require a 'supply'. Here Nintendo control that supply; any company could really do that though. If GTA ran a small print run, they'd probably be selling them at a high cost as well. I do accept that Nintendo games do tend to last longer, but a lot of it is their marketing choices.

Edited August 5, 2013 by Sheikah

[Cube]

It's not "supply and demand" - it's just "demand". As long as people still want it and will pay full price, it will stay full price.

[Hero-of-Time]

It's not "supply and demand" - it's just "demand". As long as people still want it and will pay full price, it will stay full price.

 

I personally don't think it's that simple when it comes to certain Nintendo published games. The Wii U games are a fine example of this, as are the Wii games that I mentioned on the previous page. Just about every 3rd party game has been reduced in price on the Wii U, yet the first party stuff hasn't really budged. None of these games are selling in the UK but Nintendo's own stuff prices remain intact. There is no demand so why not drop the price?

[Rummy]

There's still resource costs associated with retail, so there is an element of supply and demand. Can they truly make an unlimited supply? Eventually resources will run out. Couldn't the same argument be said for numerous physical products anyway though? There definitely is an element of supply and demand and market factors, but it's also not just as simple as that. I don't get why this needs to be polarised into just one reason or another.

 

Anyone got LtD sales for Nintendo titles? With release dates? I'd be particularly interested to see how well all of the 'New' mario titles have been doing.

[Zechs Merquise]

There's still resource costs associated with retail, so there is an element of supply and demand. Can they truly make an unlimited supply? Eventually resources will run out. Couldn't the same argument be said for numerous physical products anyway though? There definitely is an element of supply and demand and market factors, but it's also not just as simple as that. I don't get why this needs to be polarised into just one reason or another.

 

Anyone got LtD sales for Nintendo titles? With release dates? I'd be particularly interested to see how well all of the 'New' mario titles have been doing.

 

Well done! Of course there are. There are shipping costs, storage, space on the shelf as well as the physical costs. Finally there is also the fact that Nintendo or any other manufacturer cannot increase supply infinitely due to the fact that if they did they would have to scale back production of one title to increase production of another.

 

The more recent NSMB titles have sold well:

 

NSMB2: 6.42 Million

NSMBU: 2.15 Million

 

The later has an incredible attach rate of over 50%.

[Sheikah]

Well done! Of course there are. There are shipping costs, storage, space on the shelf as well as the physical costs. Finally there is also the fact that Nintendo or any other manufacturer cannot increase supply infinitely due to the fact that if they did they would have to scale back production of one title to increase production of another.

 

The more recent NSMB titles have sold well:

 

NSMB2: 6.42 Million

NSMBU: 2.15 Million

 

The later has an incredible attach rate of over 50%.

 

You guys are missing the point. If you're arguing that this is a case of supply and demand as one reason for the expense of Nintendo games, then you're basically saying that because of a low copy number of their games, Nintendo can afford to sell them for more.

 

For one, I don't believe there is a low copy number of many expensive Nintendo titles. There are shed loads of them in shops. It's very rare (in fact I doubt it has ever happened) that I shouldn't see these games in shops when I go.

 

And second, some of the games that I'm referring to as being expensive are also available online. This really is an unlimited supply. This is not a case of supply and demand; Nintendo are well supplied, they just choose to sell their games for more.

[Zechs Merquise]

You guys are missing the point. If you're arguing that this is a case of supply and demand as one reason for the expense of Nintendo games, then you're basically saying that because of a low copy number of their games, Nintendo can afford to sell them for more.

 

For one, I don't believe there is a low copy number of many expensive Nintendo titles. There are shed loads of them in shops. It's very rare (in fact I doubt it has ever happened) that I shouldn't see these games in shops when I go.

 

And second, some of the games that I'm referring to as being expensive are also available online. This really is an unlimited supply. This is not a case of supply and demand; Nintendo are well supplied, they just choose to sell their games for more.

 

You clearly don't understand the issue of supply and demand or you're being obtuse. Supply and demand has just as much to do with the price the purchaser is willing to pay as well as the supply or the ability of a company to supply a product.

 

I have clearly demonstrated that:

 

a) Most games have a large spike of sales when released then tail off to virtually nothing.

b) Nintendo games typically do not sell like this. They have smaller spikes then continue to sell strongly over a longer period of time.

 

If you are a company that 'scenario A' applies to your product you will likely cut price to stimulate a second spike in sales. This second spike represents the people who want the product but are only willing to pay for it at a lower price.

 

If you are a company that has a product that 'scenario B' applies to, you don't cut price because there is still a strong demand for your product at its launch price. Hence a price cut would deprive you of revenues and profit.

 

There doesn't have to be low supply of a product for prices to be high. Supply and demand are also affected by other factors. As Nintendo games are in high demand even years after they were released and a much larger group of consumers are willing to pay a higher price for older products (than would typically be expected) Nintendo continue to supply their games at that price.

 

It would be wholly counter productive for any company to increase supply to a stupid level, flood the market with their own product to the point where retailers (who also have a say in setting price) start selling them off at a clearance price when the product is worth far more in the minds of the average consumer.

 

Simple economics.

[Andyliini]

NSMB2: 6.42 Million

NSMBU: 2.15 Million

 

The later has an incredible attach rate of over 50%.

 

Off topic, but do these numbers include digital sales? If they don't the numbers are even more impressive.

[Rummy]

Zechs is right here, you're misinterpreting the concept of supply and demand in an economic sense Sheikah. You are in some ways both arguing the same end point, but then arguing about the presentation of the argument itself. Debates about the finer points of economics will slowly take this topic further and further off-topic, so I'll leave it there.

 

 

The more recent NSMB titles have sold well:

 

NSMB2: 6.42 Million

NSMBU: 2.15 Million

 

The later has an incredible attach rate of over 50%.

 

These are worldwide figures? Where did you find them? Ideally I'd like to get the whole series's figures and see how they all compare saleswise.

[Zechs Merquise]

Zechs is right here, you're misinterpreting the concept of supply and demand in an economic sense Sheikah. You are in some ways both arguing the same end point, but then arguing about the presentation of the argument itself. Debates about the finer points of economics will slowly take this topic further and further off-topic, so I'll leave it there.

 

These are worldwide figures? Where did you find them? Ideally I'd like to get the whole series's figures and see how they all compare saleswise.

 

These are worldwide, got them from Wikipedia. Here's some context and the extra figures:

 

NSMB: 30.38 million on the DS which sold 153.93 million - attach rate of 19%

NSMB Wii: 26.26 million on the Wii which sold 100.04 million - attach rate of 26%

NSMB 2: 6.42 million on the 3DS which has sold to date 32.48 million - attach rate of 19%

NSMBU: 2.15 million on the Wii U which sold to date 3.61 million - attach rate of 60%

[Sheikah]

Text

 

I think we will have to agree to disagree on this one. You and I clearly have different interpretations of supply and demand, and this is just going to go on and on.

 

Basically though, I think Nintendo could afford to drop the price. I reckon they could sell more (and make more) if they did, but I don't think we'll see them do it to prove this.

[S.C.G]

Basically though, I think Nintendo could afford to drop the price. I reckon they could sell more (and make more) if they did, but I don't think we'll see them do it to prove this.

 

I think you're right to a point, if Nintendo had their Wii U games available in more shops - like supermarkets - then it would be beneficial for them to lower the price at least a little bit, lets say no Wii U game any more than £29.99...

 

 

... but as things are all we have in my local branch is less than three Wii U games mixed in with the Wii games :/ which just creates confusion so the prices vary wildly; NSMBU was around £45 when it was on the shelf whereas the other day we got one copy of Epic Mickey 2 for the Wii U in for a tenner - which I bought - but that's it, so as things are there really isn't much incentive for them to do anything with the prices even though they are losing out in some places.

 

Nintendo needs to change a lot more than just game prices, but hopefully we will see that change in the coming months... or at least I really hope so. : peace:

 

Either way I'll still keep buying my games online - currently the cheapest/best way - and will still buy most Nintendo games for full price, not Game & Wario though, that can now wait until it's less than £5. :p

[Daft]

Because you only buy a Nintendo console for Nintendo games and you have no choice but to pay what they want; you are their hostage. Nintendo are famous for price fixing, this is basically a legit version of that strategy.

 

Also, because releases are much less frequent, games have less competition. On other platforms, games have to have their price because the through-put of new software is huge; the only way older games can remain appealing against newer ones is by dropping their price. Capitalism, it works.

[Rummy]

I think we will have to agree to disagree on this one. You and I clearly have different interpretations of supply and demand, and this is just going to go on and on.

 

Basically though, I think Nintendo could afford to drop the price. I reckon they could sell more (and make more) if they did, but I don't think we'll see them do it to prove this.

 

He's not saying it's any issue of supply or demand individually, as you are; but that it IS supply and demand - it's an economic model of price determination. 'Agreeing to disagree' is simply ignoring that fact and the way it works. This should never have been a major point of discussion, as it's well defined basic economics. http://en.wikipedia.org/wiki/Supply_and_demand

 

Basically, Nintendo CAN sell the products for less but they CHOOSE not to. They feel the demand is there for their product at that price, and can satisfactorily market and sell the product at said price. This is reflected in the sales. One thing I'd love to know is how much of Nintendo's 1st party titles end up rolling through the second-hand market; it's the sort of decision that'll push consumers either to pre-owned(though they similarly reflect the high price in their own domain) or wait for retailers to do sales/cuts on the new products(again I'd love to know how many sales are made here).

 

As Daft points out, it's a mini-monopoly of sorts. There's nothing to compete and so you either pay it or don't - they don't care and they can keep the price high in faith that they'll sell what they want to. However I think with other titles there's more competition and that leads to the faster drops. One point of competition is for say a multi-platform title where a number of consumers own all the systems - the 360 and PS3 market might have to compete with each other due to differening demand. Another point of competition are similar games ie CoD vs Battlefield.

 

The Nintendo brands are fairly unique and also very well established - it's their brand that sells them(arguably similar to Apple but on a much smaller scale) - it's difficult to find or introduce a competition into their market. Similarly keeping the price high makes some 'see' it as a premium product(expensive=good! yuh!) and think it must be good and thus buy it.

 

As for competition to possibly jeopardise their hold - who would compete with Mario on his own console? Who would compete with him on an alternative console? It's been tried, but I think it's fair to say that nobody's ever managed to quite replicate Mario's success in his own domains to the same levels.

[Zechs Merquise]

I think we will have to agree to disagree on this one. You and I clearly have different interpretations of supply and demand, and this is just going to go on and on.

 

Basically though, I think Nintendo could afford to drop the price. I reckon they could sell more (and make more) if they did, but I don't think we'll see them do it to prove this.

 

There's no disagreement. You simply don't understand supply and demand, I do. The end.

 

What you have done is asked a question, when really you wanted to make a statement. You wanted to say: "Nintendo are awful and keep the prices of their games artificially high because they are evil. They should sell them cheaply because I think so. Because I don't attribute the same value to their products as the those buying the games I think they should drop the price."

 

What you have not done is presented any data to prove your statement, where as I have. I have clearly demonstrated how Nintendo games sell, ho most other games sell and why the prices of Nintendo games remain higher for much longer due to those patterns.

[Hero-of-Time]

As for competition to possibly jeopardise their hold - who would compete with Mario on his own console? Who would compete with him on an alternative console? It's been tried, but I think it's fair to say that nobody's ever managed to quite replicate Mario's success in his own domains to the same levels.

 

This guy did a hell of a job in the 80's and 90's.

 

[Sheikah]

There's no disagreement. You simply don't understand supply and demand, I do. The end.

 

What you have done is asked a question, when really you wanted to make a statement. You wanted to say: "Nintendo are awful and keep the prices of their games artificially high because they are evil. They should sell them cheaply because I think so. Because I don't attribute the same value to their products as the those buying the games I think they should drop the price."

 

What you have not done is presented any data to prove your statement, where as I have. I have clearly demonstrated how Nintendo games sell, ho most other games sell and why the prices of Nintendo games remain higher for much longer due to those patterns.

 

You presented what seemed like a 'counter' point to me, but I was never in disagreement that this isn't something Nintendo formulated. That's without doubt - they set these prices because they will still sell, and to give them a false perception of value. I've never argued that, sorry for derailing on that misunderstanding.

 

 

Of course, when I'm making this topic I'm making a statement. I'm making the statement that Nintendo games are priced at near RRP for most of their sale life, and asking what people think about this. And I'm asking why you think Nintendo do this, and whether you think it's a good idea.

 

I personally don't think it's a good idea. Both you and Rummy have said that they continue to sell well throughout their life - I don't believe they sell as well as they could if they had occasional sales. I don't know how accurate this link is, but Ocarina of Time 3DS isn't even in the Top 40 (understandably). Surely a short sale would help boost sales of the game, and cause people who might not normally have bought it in the next few years to splash on it. I mean, Nintendo just have loads of games sitting there that are probably making barely any sales on a week-to-week basis. What harm could reducing the price, temporarily or permanently, really do?

Edited August 6, 2013 by Sheikah

[Rummy]

This guy did a hell of a job in the 80's and 90's.

 

 

Very true, very true. Never ever as a kid would I have envisioned him and Mario side by side as friends, let alone as an exclusive on a Nintendo console! Times really have changed man. Tis one downside to the convergence of gaming and multi-platform titles - though that's more for another topic on the board.

 

Surely a short sale would help boost sales of the game, and cause people who might not normally have bought it in the next few years to splash on it. I mean, Nintendo just have loads of games sitting there that are probably making barely any sales on a week-to-week basis. What harm could reducing the price, temporarily or permanently, really do?

 

Well, I'm more saying Nintendo believe that they will, or will at least meet what they want the product to. However I'm actually in agreement with you on the latter point - it'd be nice for them to possibly do some promos and price cuts - even if just temporarily. I haven't bought a single 'New' title since the original*; I don't personally feel they're worth the high-held value. Promos, especially with digital downloads having even less overhead, would be an excellent way to make a bit more money and get a bit more exposure whilst moving a little more forward into the age of digital distribution. From what I saw here the Plenty of Games promotion was a pretty decent success, even though I didn't partake myself.

 

*In interests of full disclosure technically I did buy NSMBU when ASDA had the Wii U deal(so was cut price anyway) but I returned it in favour of the even better value HMV deal.

Edited August 6, 2013 by Rummy

[Sheikah]

(Also, just so people know where I was coming from on the Supply and Demand thing):

 

The supply and demand model describes how prices vary as a result of a balance between product availability at each price (supply) and the desires of those with purchasing power at each price (demand). The graph depicts an increase in demand from D1 to D2 along with the consequent increase in price and quantity required to reach a new market-clearing equilibrium point on the supply curve (S).

 

...

 

In general, the theory claims that when goods are traded in a market at a price where consumers demand more goods than firms are prepared to supply, this shortage (or excess demand) will tend to lead to increases in the price of the goods. Those consumers who are prepared to pay more will bid up the market price.

 

The bolded part basically proves what I was saying - I was arguing that the supply part didn't count here as the availability of online downloadable titles means the 'supply' is almost inexhaustible, and therefore it's not a case of consumers paying more because there are fewer available copies. Obviously though, the links you posted Rummy seem to present it a different way, and I'm not going to pretend to be an expert on this.

 

Also, one of the assumptions of a Supply and Demand model requires markets to be perfectly competitive:

 

The theory of supply and demand usually assumes that markets are perfectly competitive.

...which makes sense, since the whole concept wouldn't be possible otherwise. Which the current situation really isn't (Nintendo have a monopoly), which means the assumptions of the model are invalidated, which means Zechs can't apply it to this setting.

Edited August 6, 2013 by Sheikah

[Clownferret]

as somebody has already mentioned, games like FIFA & COD get frequent updates so the previous versions become outdated very quickly, Nintendo usually only release 1 version of a game per console so these games remain current throughout the consoles lifespan. That's why when you look at game sales, Nintendo's in-house games are usually the biggest selling.