Japanese video game company Nintendo yesterday cut the US price of its flagging GameCube game console by a third as it looks to build momentum for the crucial holiday season.
Nintendo said the price cut to $99 from $149, which had been widely expected by game publishers and financial analysts, would take effect today.
The move makes the GameCube $80 cheaper than its two competitors, Sony`s market-leading PlayStation 2 (PS2) and Microsoft`s second-place Xbox, both of which start at $179.
"Under $100 is the magic price point for consoles, we believe, and we did not think there was any value in going to an interim step" like $129, George Harrison, Nintendo of America senior VP of marketing, told Reuters.
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.
A number of game publishers have curtailed or ended production of GameCube games, citing the platform`s disappointing sales. Analysts were quick to caution that Nintendo was likely to benefit most from the news.
"Although this is a positive announcement with respect to Nintendo, we do not expect this price drop to have a dramatic effect on our expectations for the third-party publishers in our universe," Harris Nesbitt Gerard analyst Edward Williams said in a note.
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.
Strong internationally, weak in US
While the console has been stronger in Japan and Europe, in the US it has settled into a firm third place, with an installed base about 29% smaller than that of the Xbox.
The last major game console to retail for $99 in the US was Sega`s Dreamcast -- though that price was an inventory-clearing move after Sega discontinued the console and decided to become exclusively a game publisher.
Nintendo earlier this year said 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 have 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.
"We do not expect Sony or Microsoft to follow suit with hardware price cuts but instead remain committed to the hardware/software bundle programs each has already announced," Williams said.
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