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Nintendo targets China, cuts U.S. price
Thursday, September 25, 2003 Posted: 9:49 AM EDT (1349 GMT)
TOKYO (Reuters) -- Japanese video game firm Nintendo Co Ltd said on Thursday it will start selling game consoles in China in mid-October, announcing the move hours after it cut the U.S. price of its GameCube console.
A Nintendo spokesman in Tokyo said it had not set numerical targets for the Chinese market, but added: "We hope to see this market grow bigger than Japan, the United States or Europe."
Nintendo, which created the popular Pokemon and Mario game series, said it has developed a special console for the Chinese market with a flash memory card to which users can download game software titles at stores.
The spokesman said this would curb pirating and help manage inventory. A local affiliate will handle marketing of the console, which is expected to sell for 498 yuan ($60).
Meanwhile, the U.S. price of GameCube is being cut to $99 from $149, as widely expected by game publishers and financial analysts, effective from Thursday, as Nintendo seeks momentum for the flagging product ahead of the crucial holiday season.
"Under $100 is the magic price point for consoles, we believe, and we didn't think there was any value in going to an interim step" like $129, George Harrison, Nintendo of America's senior vice president of marketing, told Reuters.
GameCube will be $80 cheaper than its two competitors, Sony Corp's market-leading PlayStation 2 and Microsoft Corp.'s second-place Xbox, both of which start at $179.
The cut to $99 also makes the GameCube the same price as the company's Game Boy Advance SP handheld device, which dominates the portable gaming market.
Disappointing sales
A number of game publishers have curtailed or ended production of GameCube games, citing disappointing sales.
Of the 10 best-selling games for the GameCube in August, according to research service NPDFunworld, six were published by Nintendo -- a far higher proportion of first-party games than on any other console.
While the console has been stronger in Japan and Europe, in the United States it has settled into a firm third place, with an installed base about 29 percent smaller than the Xbox.
The last major game console to retail for $99 in the United States was Sega Corp.'s Dreamcast -- though that price was an inventory-clearing move after Sega discontinued the console and decided to become exclusively a game publisher.
Nintendo said earlier this year it had stopped production of the GameCube because of an inventory backlog, but Harrison said production would start up again later this fall. He declined to say, though, if Wednesday's price move foreshadowed the coming of a successor to the GameCube.
"What we've said about the next console is the work is under way and we would be launching at the same time as our competitors," Harrison said.
Harrison also said the fact that gamers could buy a GameCube and three games for the same price as a PS2 with no games made it a more compelling value for the holidays.
Both Sony and Microsoft have announced special bundle packages for the holiday season that involve free games, offers that ran counter to widespread industry hopes that the hardware makers would cut their prices instead.
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