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SAN FRANCISCO
—
Nintendo Ltd.
cut the price of its popular Wii console by
$50 to $199
, the latest price reduction by video game console
makers who have watched sales fall sharply over the last
six months.
Late
Wednesday,
Nintendo
issued a statement announcing the reduction, which had
been widely expected across the gaming industry after
rivals
Sony Corp.
and
Microsoft Corp.
scaled back the prices of their own consoles earlier
this year.
It is the
first time the Wii has seen a price reduction since its
initial launch on the market in late 2006 — the
longest a game console has ever gone at its initial
price.
"We
expect the price cut, coupled with the release of
several key first-party titles, to spur demand for the
console, helping to provide the console with some
momentum going into the holiday season,"
Edward Williams
of
BMO Capital Markets
wrote in a note to clients Thursday.
The Wii
has been the most popular of the latest generation of
gaming consoles, outselling the PlayStation 3 and Xbox
360 since its launch. More than 50 million units have
been sold to date globally, according to
Nintendo
.
However,
the console has also suffered from a recent slowdown in
sales, along with the rest of the industry. The Wii sold
277,400 units in the U.S. during the month of August,
according to data from the
NPD Group
. That's down 63 percent from the 753,000 units sold in
February.
Sony
was the first console maker to cut prices for the
current holiday season. On
Aug. 18
, the company cut the price of the PS3 by
$100 to $299
.
Less than
two weeks later,
Microsoft
cut the price of its Xbox 360 Elite unit to match the
PS3 and
$299
. The company had previously cut a lower-end model to
the
$199
price point.
Analysts
predict that the holiday shopping season will make up
for a weak spring/summer period for the industry. Game
sales fell for their sixth consecutive month in August,
according to NPD data. Sales are expected to move back
to gains in September thanks to lower console prices and
popular games such as "The Beatles:
Rock Band
."
"A
competitive console market with incremental price cuts
have historically helped to drive strong software sales
through the course of the video game cycle,"
Colin Sebastian
of
Lazard Capital Markets
wrote in a report Thursday.
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