Iwata slams "unhealthy" software price reductions

Nintendo president Satoru Iwata has attacked the current pricing model used by the videogames industry, saying that software should be priced appropriately at launch rather than being reduced rapidly by retailers.

Speaking in a corporate management policy briefing, the full text of which was released by Nintendo this week, Iwata described the model whereby retailers drop the prices of software in the months after launch as an "unhealthy product cycle."

"We believe that each software should have its own price point depending on its volume, theme, contents or energies and time spent for the development, namely, the development costs," he commented, continuing by saying that "once the suggested retail price is announced, we should stick to it."

At present, the models used by publishers and retailers alike are not suited to releasing games at price points other than the top-end RRPs for console software - with many publisher shying away from lower-priced releases for fear that retailers and consumers will treat them as being lower quality budget software.

However, Iwata believes that the discounting of full-price software which has become prevalent in the industry is even more damaging than this effect, and is damaging the sales of new software.

"If the suggested retail price of any and all software is marked down in 6 months or 9 months, the customers will learn the cycle and wait for the discounting," he explained, "which will simply aggravate the decreasing sales of new software."

Elsewhere in the briefing, Iwata and Nintendo development chief Shigeru Miyamoto touched upon a number of other topics, including the name of the Wii console, the failure of the Game Boy Micro, particularly outside Japan, and the steps the firm is taking to ensure that the Wii is more successful than the GameCube.