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Nintendo: The Console Wars
Acquired
Strategic Move and Pricing in Console Market
In the competitive console market, a strategic move is to leverage existing customer base, but cutting costs by removing a feature may lead to losing the advantage of a large install base. In the case of Nintendo, the decision to exclude backwards compatibility in the Super NES was driven by estimating a $75 increase in the bill of materials. This led to the Super Nintendo being priced at $200 to compete with the preemptive price cut of the Genesis at $150, but it remains uncertain whether this was a mistake on Nintendo's part.
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