The Game Druid

Like anything else, the price of game hardware is affected by the law of supply and demand. If everyone wants something but there isn’t enough of it to go around, prices aren’t likely to come down.

Nintendo has no doubt realized that demand for its hardware is high and supply is not, as it reportedly doesn’t expect to bring down the cost of admission for either piece of hardware anytime this year. According to Reuters, Nintendo president Satoru Iwata addressed the possibility of price cuts in an analysts’ meeting earlier today.

“Our earnings projection for the year is not based on hardware price cuts, and I don’t think we are going to need them,” Iwata was quoted as saying.

Despite that confidence, there is reason to think that the laws of supply and demand won’t work as much in Nintendo’s favor this year. In a note to investors this morning, Lazard Capital Markets Colin Sebastian pointed to Nintendo’s plan to increase Wii production and supply by more than 34 percent this year. He also noted the company’s forecast that it expects to ship 28 million DS systems for the new fiscal year, down from 30 million last year, suggesting that it expects slightly tempered demand for the handheld.

Sebastian said Nintendo is planning to spark DS sales in the future by pushing further into the mainstream consumer market with new features and games designed for non-traditional gamers. But if that doesn’t work out, Sebastian suggested that the DS would be in for another redesign.

“[W]e believe Nintendo could launch a refresh of its handheld platform if sales momentum does not continue,” Sebastian said.

This isn’t the first time an analyst has suggested a new version of the DS. Last November, Pacific Crest Securities’ Evan Wilson cited contacts in the industry as telling him the redesign is already complete, and Nintendo was just waiting to unveil it until DS sales tapered off in the US, Europe, and Japan.

The DS was launched in November of 2004, and its first redesign, the DS Lite, debuted in Japan in March of 2006.

This entry was posted on Saturday, April 26th, 2008 at 4:43 am and is filed under Wii. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.