Nintendo Wii at $249 Good... Sunday, September 24 2006
... at least for Nintendo. Yes, I'm still in Peru (Arequipa, to be exact) on vacation, but we're killing a half-day hiding inside a coffee shop from the beating sun. (The Inca Trail and Machu Picchu were amazing, by the way!) Anyway, so I have a chance to ramble on a bit about Nintendo's pricing announcement.
As I mentioned, I'm not at all surprised at the price. I know legions of Nintendo fans feel as though the console is priced too high, and that Nintendo betrayed them. I'm not quite sure I understand the logic as this is a business, and Nintendo A) needs to make money, and B) will sell every unit of Wii they can manufacture this holiday at $249. Put yourself in their shoes - why would you do anything different?
I think Nintendo's done quite well so far. They've positioned themselves cleverly and avoided the financially bruising battle of the "high-end" console gorillas. The new controller has a lot of potential, and using what's basically spruced-up Gamecube hardware should allow them to keep the lowest-cost console edge for quite a while (perhaps even the entire generation). All that said, there are three risks I see for Nintendo in the future.
The first is simply that their new controller doesn't live up to expectations, both for end-users and for publishers and developers. I've already mentioned some of my concerns around latency with the controller (especially for FPS/aiming sorts of games), and if the controller doesn't end up being "tight" and feeling just right for gamers Nintendo could see a huge backlash. This also applies to Wii title development from 3rd parties. There's a lot of publisher support right now due to uprising of Nintendo/Wii fever... but all it'll take is a few titles not selling well for that support to be revectored back to other more successful platforms (that don't need unique controller work).
The second risk is that Nintendo is unable to deliver a modern online gaming network with the basics, bells, and whistles everyone expects. Early indications are pretty negative, with the confirmed rumors of the frustrating Nintendo DS Friend Code system also being used for Wii. If Nintendo can't even deliver the basics of a unique ID, Friends List, and Presence, I'm concerned they won't be anywhere near delivering more advanced features down the road. (I'll give kudos for the virtual console at least - though I do have concerns about the pricing for playing old school titles.)
The final risk I see is how competitive the Wii will be two or three holidays from now. Today Nintendo gets a lot of slack thanks to all the positive and new aspects of Wii - unique controller, low pricing, innovative games, etc. A couple of holidays from now I wonder how compelling a souped-up Gamecube will be to gamers, especially when compared to 3rd and 4th generations PS3 and Xbox 360 titles. Add in uncertainties around their online network, and that the controller won't be so new and exciting anymore, and I worry that we might be facing another Gamecube in a few years. To some extent, Nintendo will be able to counter some of this with a low price, but at some point the delta between the "high-end" consoles and the Wii will shrink to maybe $50-100, and at that point I could see a lot of people tipping toward whatever the more successful "pro" console happens to be.
Officially back in less than a week, look forward to your comments and thoughts!

The other aspect that worries me is that Nintendo might end up pushing a little too hard to become the party-game platform - which I think will be great in the short term at bringing in new people, but will ultimately result in a console that doesn't support hardcore gamers.