The Nintendo 3DS had only been available for 4 months when Nintendo announced a major global price drop. After the period of the 3DS’s initial release, the sales of the hand-held console had significantly dropped. Nintendo could not have anticipated this, especially within less than 6 months of it being on the market.
Much like any newly released product, Nintendo adopted a price skimming strategy that focussed on profit maximization. This strategy is always smart; as loyal gamers will not hesitate paying whatever price as long they can get the product shortly upon its release. Shortly after, however, 3DS sales plummeted as gamers were either refusing to pay that amount for the item, or were totally unconvinced of Nintendo’s new device.
An executive decision resulted in a $100 price drop world-wide, being announced late July 2011. This early penetration pricing strategy was aiming to fulfil sales orientated objectives. This would also mean that the faithful Nintendo gamers, who paid full price months earlier, would be left in Nintendo’s corporate dust as the suckers who supported 3DS’s early sales upon release. However, Nintendo (who really values and requires these loyal consumers) launched its 3DS Ambassador Program which will reward the current 3DS users with 10 free NES Virtual Console games before they are released for sale to the public. Users will also be able to download 10 free Game Boy Advance Virtual Console games which have no current plans to be released for public sale. So that is 20 free downloadable games at a retail price of (approximately) $200! This would ensure a continued happy and intimate relationship with Nintendo fans while also expressing how much they really value them.
This announcement cause two kinds of movements: The first being of consumers who want these free games, and willingly pay full price for the 3DS; and the second being of money-tight consumers who are now jumping at the chance to get Nintendo’s cheaper hand-held. By dropping the price, Nintendo has also effectively created a relaunch for the 3DS. This fresh re-release and new price has already seen success in both North America and Japan with Japanese sales equalling that of the 3DS’s 2nd week on the Japanese market, back in the beginning of March.
It is unsure how long this surge of sales will last, but for Nintendo, they are sales none-the-less, and at the same time, keeping all their 3DS customers (current or future) very happy.
