LITTLE ROCK — Nintendo Co. has cut the top-selling Wii's price for the first time, and Sony Corp. lowered the cost of buying its PlayStation Portable player in Japan to help revive industry sales.
The motion-sensing Wii's price dropped 20 percent on Sunday to $200 in the United States, the Kyoto, Japan-based company said.
Nintendo became the last of the three major game-console makers to cut prices as the hardware manufacturers bowed to publishers and retailers, who called for cheaper machines to reverse the industry slump. Last quarter, global sales of the Wii fell for the first time, while Tokyo based Sony Corp. sold the fewest number of PlayStation 3 machines in two years.
Last month, Sony slashed PlayStation 3 prices by 25 percent to $300, and Microsoft Corp. said last week that it's offering a $50 discount on the Xbox 360 console.
"These past few years the game consoles, PlayStation 3 especially, have been a little bit out of price range for a Christmas present," said Eiji Maeda, a Tokyo-based JPMorgan Chase & Co. analyst. "The reductions make the PS3 and Wii within reach for more people and should spur sales."
The price of the Wii, introduced in 2006, will be lowered in Japan on Thursday and in Europe on Friday, Nintendo spokesman Ken Toyoda said.
Nintendo was the only one of the three console makers to sell fewer machines in August in the United States, according to research firm NPD Group Inc.
"The timing of the price cut was very good since Wii sales were slowing down," said Etsuko Tamura, an analyst at Mizuho Investors Securities Co. in Tokyo. "Combined with [future] game titles, sales will probably increase toward the end of year."
In June, Activision BlizzardInc. Chief Executive Officer Bobby Kotick, who heads the world's largest game publisher, said the company may shift away from making products for Sony. And Daniel DeMatteo, head of GameStop Corp., the largest video-game retailer, said in May that console prices were "too high."
"The price reductions by Sony, Microsoft and Nintendo should even further expand the gaming audience," Yoichi Wada, president of Final Fantasy developer Square Enix Holdings Co., said Thursday in an interview at the Tokyo Game Show. "As a software maker, it is something we very much welcome."
Price cuts have worked for Sony and Microsoft. U.S. sales of the PlayStation 3 increased in August after the price of the system fell.
Microsoft'ssales rose after it reduced the cost of the most expensive Xbox 360 model to $300.
Kazuo Hirai, head of Sony's games business, said last week that PlayStation 3 sales exceeded 1 million units in the three weeks after the price cut. Jack Tretton, chief executive officer of Sony Computer Entertainment America, said the company is poised to meet its annual sales target of 13 million units.
After leading the U.S. video-game market to a gain of 19 percent last year, Wii sales have fallen for five straight months, according to industry tracker NPD. The drop has pulled the overall U.S. video-game industry down 14 percent this year through August, according to NPD.
Microsoft is the only console maker to register an increase in U.S. sales this year, helped partly by an earlier price cut in September 2008. The company's cheapest Xbox 360, which doesn't have a hard drive, has retailed for $199.99 since September 2008.
"Obviously the $199 price point has historically been an important one in a console's life cycle," Phil Spencer, corporate vice president at Microsoft's games division, said at the Tokyo Game Show. "With the success we continue to have at that price point, I continue to feel good about our future."
The Wii, which lets players pretend they're swinging a bat or brandishing a sword, is the best-selling game console, with more than 52.6 million purchased worldwide, according to company reports. Microsoft has sold more than 30 million Xbox 360 players and Sony has sold about 24 million PS3s, according to company estimates.
Nintendo needed to cut the Wii's price to meet annual sales targets, said Michael Pachter, an analyst at Wedbush Morgan Securities in Los Angeles. The company projects it will sell 26 million consoles in the year ending March 2010.
"Nintendo has to work on software development, as title sales have been flagging," said Yusuke Tsunoda, a Tokai Tokyo Securities Co. analyst. "The price cut will probably help the company increase sales to some extent, but it won't be significant enough to impact earnings." Information for this article was provided by Yoshinori Eki, Mariko Yasu, Maki Shiraki and Adam Satariano of Bloomberg News.
Business, Pages 21, 24 on 09/28/2009