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Wii U pricing: Is it too high?

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Nintendo's announcement on Thursday that the Wii U would come in two flavors costing either $300 or $350 instantly sparked a lot of arguments.

Some thought it was too high a number. Some felt it fair. Few, it's worth noting, vowed to boycott the system, so any objections fell short of the ones Sony faced when the PlayStation 3 was initially priced at an astronomical $500.

To help put the matter in perspective, we reached out to some of the industry's biggest analysts to get their take on whether Nintendo has priced the system too high, too low or just right.

To Michael Pachter of Wedbush Securities, the system is indeed too expensive.

"Wii U's price points are appropriate given likely demand from Nintendo's core fan base, but we believe that pricing will be too high to sustain demand given current competition from other consoles and tablets," he said.

"At $299 and $349, we believe demand for the Wii U will wane once Nintendo's core fan base has purchased the first 6-7 million units, especially given that a number of cheaper, comparable alternatives already exist. … [However] many consumers will view [Wal-Mart's] Xbox 360 bundle at $249 as a better value than the Wii U at $299."

That assessment is in tune with what happened to Nintendo's 3DS handheld, which shot out of the gate during its launch period only to watch sales slow to a crawl a few months later. Eventually Nintendo dropped the price from $250 to $170, which managed to stimulate sales again.

Arvind Bhatia at Sterne Agee, however, thinks the Wii U price is about right.

"We had thought $299 — and that's right where they came out," he said. "We were hoping — but not expecting — that they would go to $249, because that would have been an even better price point, but we understand $299."

P.J. McNealy of Digital World Research agrees.

"It's utterly solid," he said. "I thought they presented a sub $300 option and at the end of the day, people will opt for the $349 model. I'm not at all surprised by this pricing and I'd say it's quite reasonable."

Then there's the issue of the Wii U software, which Nintendo has confirmed will target the $60 price point that's become the industry norm. Analysts, however, aren't so sure consumers will be on board.

"People are so used to $50 software prices from Nintendo," Bhatia says. "There's a possibility there's an appetite for that price point, but it's hard to tell. … I see Nintendo as trying to send the message that their gaming platform is just as good, if not better, than the other two guys, so from that perspective, it makes sense."

Jesse Divnich of EEDAR agrees that while the $60 price point seems fine, Nintendo fans might be a little miffed.

"Game pricing is all relative to value and if the Wii U can deliver a premium experience, a $60 price point is appropriate for a traditional HD experience," he says. "If you look, however, at the Wii's demographic and game pricing history, the $39 and $49 range has clearly a sweet spot for that demographic. I would expect a tiered pricing system whereas core experiences are priced at $60, but casual & family experiences are priced less."

What do you think? Is the Wii U too expensive or is it priced right?

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