Divnich: Wii Games get price cuts faster

A new report from Electronic Entertainment Design and Research shows that games on Nintendo’s Wii are more easily subjected to price reductions than games for PS3 and Xbox 360. EEDAR analyst Jesse Divnich shares his thought on the factors that bring a price down.

A new report from Electronic Entertainment Design and Research shows that games on Nintendo’s Wii are easier subjected to early  “price protection” than games on PS3 and Xbox 360. Price protection is when publishers lower the per unit cost of a game title or SKU to maintain consumer patronage.

Early price protection is when a title’s third month average selling price drops by 20% or more from its original selling price. This may occur at retailers requesting the price cuts, or when a game underperforms to such an extent that they just want to clear their stock.

Says EEDAR analyst Jesse Divnich,

Over 7.5% of Xbox 360 and 9.09% PS3 third-party published titles go into price protection early. The Wii, however, nearly doubles the Xbox 360 and PS3’s average at 15.1%. These results are significant, as one would expect that aggregating the percentage of titles entering into early price protection across these three systems would produce similar results. This disparity on the Wii reinforces concerns that the market has had with third-party publishers developing successful titles on the Wii.

“Because of the highly competitive and unpredictable mainstream and casual markets, EEDAR believes retailers and publishers are overly aggressive on expectations for Wii games,” he continued. “This is directly leading to a higher percentage of third party Wii titles entering into early price protection.”

The release of games targeting the core market are typically spread out through the year to get less competition and improve chances of capturing a larger chunk of the market.

Naturally, there are more factors for a title to go into price protection, but EEDAR points out that it all boils down to the game’s quality. “Every time we use our data set of aggregate game reviews, we generally come to the same conclusion; quality is one of the most impactful features for a video game,” says Divnich.

No game with quality scores over 91% have ever gone into early price protection. But games with 75% to 88% ratings have similar chances of going into price protection early. So if you’ve been biting your wallet to keep yourself from suffering the full blast of game prices, you’d know from its quality if the price is gonna drop early or not.

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Via Game Daily