Having previous experience of a situation is usually regarded as a good thing. Such experience makes you less likely to undertake a knee-jerk or panicked reaction. On the other hand, simply having 'previous' is a far less desirable trait, usually referring to a character with a track record for undesirable activities.
Nintendo has plenty of experience in selling consumer hardware to both casual consumers and adoring fans. However, it displayed previous little of this when it came to the recent price cut of the Nintendo 3DS handheld console. The drop came as some surprise despite the Japanese company having 'previous' in this particular area; dropping the price of its Nintendo 64 console from £250 to £150 just two month after its release in 1997.
The price cut for the 3DS was equally huge, more of a price slaughter really. Nintendo and others will talk about reductions in the RRP, but what really matters is how much actual customers paid before and after the cut. Just after its release the 3DS was selling for £187 on Amazon, but the recent cut has dropped that price down to just £115 - that's just 61% of the original selling price.
You might be wondering how such a huge cut is even possible? Was Nintendo just ripping off early adopters? And does the new price represent a bargain? Well that's hard to say, due to the business model that most games consoles follow - where profits made on hardware are an unusual bonus, rather than the norm.
The owners of the console platform usually sell heavily subsidised hardware, and then make back the costs incurred by charging software publishers a fee for every game they sell. Such fees aren't public knowledge, but roughly £5 of each full-priced retail game is paid back to the platform holder, and these fees are renegotiated with publishers over the consoles lifespan.
It seems then that Nintendo hoped to profit from 3DS sales, as it's widely believed to have done on the Wii, and earn money from both hardware and software. But the 3DS's high price, combined with the global recession, has forced it to take up a longer-term game plan, with no-profit or subsidised hardware acting as a loss-leader.
Those who bought the 3DS console at the original price have been given the title of 3DS Ambassadors, and they each get a range of 20 free retro games. It's some consolation we suppose, but some money off vouchers for up-to-date 3DS titles (which Nintendo is certainly in a position to provide) would have been a far better and fairer way to recompense its fans.
Speaking of which, when Microsoft pulled a similar trick with the original Xbox in 2002, it gave early-adopters two full-priced games plus an extra controller to make up for a £100 price cut. Cynically, you could say the Windows giant was new to the games market and keen not to make enemies early on. Still, it was a rare streak of generosity from Bill Gates - unless of course you happen to be a worthy cause of some variety.
If you haven't bought a Nintendo 3DS yet, then the price cut is great news now - although there may be a downside in the long term. It wouldn't surprise us if Nintendo now keeps its licensing costs higher for longer, which means that the relatively high price of 3DS games isn't likely to drop anytime soon. For those buying now, that's just business as normal, but for anyone who paid the original price for a 3DS, it's a double-kick in the wallet.