NVIDIA Drops Shield Price to $299: Desperate or Brilliant?

Last month, NVIDIA (NASDAQ: NVDA  ) started taking pre-orders at $349 for its first handheld gaming device, NVIDIA Shield.

Naturally, that number upset more than a few people and drew skeptical reactions. Remember, Sony  (NYSE: SNE  ) , for one, long struggled to sell its own Playstation Vita handheld until it finally dropped the price by $100 to $249.

Besides, the mobile gaming market is also currently being upended by smartphones and tablets, which are arguably the biggest reason Sony had such a hard time selling its Vita in the first place. (Incidentally, that's something at least one fellow Fool saw coming long before he Vita was even released.)

Of course, unlike Sony, NVIDIA doesn't exactly have the widely favored Playstation 4 to fall back on, so many couldn't help but wonder why NVIDIA even entered the crowded handheld space to begin with.

Sure, the Tegra 4-powered Shield runs on Android, and its specs are impressive in their own right. What's more, hardcore gamers love the that fact Shield not only includes a comfortable gaming controller built in, but also enables them to stream high-powered games from their PCs via Wi-Fi, and even to their big-screen TVs.

In fact, that's why Shield has already raked in dozens of awards, including "Best of Show" at this year's CES, Computex, and E3.

Image source: NVIDIA

One final touch
Even so, many folks still couldn't seem to get past the sticker shock. In an official company blog post published on Thursday, NVIDIA's Jason Paul acknowledged, "We've heard from thousands of gamers that if the price was $299, we'd have a home run."

"So," Hall went on, "we're changing the price of Shield to $299."

As it stands, Shield won't actually be available for another week but, for those who've already pre-ordered the system, they'll be charged the new, lower price when it ships. 

Finally, Hall summed up the post by saying NVIDIA simply wants "to get Shield into the hands of as many gamers as possible [...] because we think they'll have the same reaction to it as thousands of gamers already have: joy."

The elephant in the room
Unfortunately, this absolutely begs one awkward question: With a week to go until Shield's official release, is this a sign of desperation from NVIDIA?

After all, so far the company has remained mum on actual sales numbers for Shield, so you can't help but wonder whether this move was a reaction to less-than-satisfactory pre-order results.

Then again, while I wasn't going to complain if the product actually sold well, last month I did warn we shouldn't expect Shield to move NVIDIA's revenue needle in the near future -- especially since it's a relatively niche product, anyway. What's more, as fellow Fool Evan Niu also recently suggested, one saving grace for NVIDIA if it all hits the fan is that Shield "only required relatively small incremental investments and amounts to a cheap experiment."

Bigger and better things
Still, I'd like to reiterate placing undue focus on Shield's sales numbers may be missing the point entirely.

Remember, as I also wrote last month, I think NVIDIA is using Shield "as an avenue through which it can raise awareness for its platform-independent, cloud-based GRID gaming solution."

And while NVIDIA's happy to continue extending its innovation to traditional console-based game platforms, its increasing focus on cloud-based solutions has made its long-term vision more clear by the day. Thanks to GRID, NVIDIA claims:

You'll soon be able to stream video games from the web just like any other streaming media. GRID renders 3D games in cloud servers, encodes each frame instantly and streams the result to any device with a wired or wireless broadband connection.

The page goes on to highlight users will be able to use GRID to experience "high-quality, low-latency, multi-device gaming on any PC, Mac, tablet, smartphone, or TV."

With that in mind, do you really think NVIDIA is all that concerned if Shield doesn't immediately take the world by storm? I certainly don't, because it looks like the folks at NVIDIA have their minds set on much bigger and better things for the gaming industry.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2501968, ~/Articles/ArticleHandler.aspx, 12/21/2014 3:58:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement