Culture

GameCube price to be lowered in Japan

The widely expected markdown will take effect next month and will make Nintendo's game console the cheapest on the Japanese market.

Aug. 16, 2002 3:13 a.m. PT

2 min read

Video game giant Nintendo said Tuesday that it would cut the price of its GameCube machine in Japan to $159 (19,800 yen) from $200 in a bid to regain its price advantage in the hotly contested game console market.



		Reader Resources GameCube latest prices

The price cut, to take effect June 3, would make GameCube the cheapest game console on the Japanese market and is a direct result of the company's decision to move production to China. Microsoft's Xbox carries a price tag of $199, and Sony's PlayStation 2 retails for around $217.

The cut was widely expected. On Monday, Nintendo slashed GameCube's price in the United States by about 25 percent, after a 20 percent price cut in Europe earlier this month.

"As we've said before, we've figured out how to cut costs by shifting production to China, and as a result we were able to offer cheaper prices," spokesman Hiroshi Imanishi said.

Ben Wedmore, an analyst at HSBC Securities, said Nintendo was swimming in cash and could easily afford to cut prices.

"Nintendo has made a great deal of money in this industry and they've watched price cutting wars before," he said.

Last month, Nintendo increased its earnings forecast for the year ended March 31, saying it expected a group net profit of $884 million on sales of $4.42 billion.

Wedmore said it was likely another round of price reductions was in the pipeline. "We should expect them, although I would not hope too soon," he said.

A price war in the game console market flared as Sony and Microsoft aggressively chopped the price of their consoles to beef up their shares in the $20 billion game market.

Microsoft said last week it would cut the price of the Xbox to $199 from $280 in Japan on May 22.

That announcement came two days after Sony said it would make a modest cut in the wholesale price of the PlayStation 2 in Japan and allow retailers to set their own prices, scrapping its list price of $240 that had already been cut by 15 percent last November.

Imanishi said Nintendo sold 1.57 million GameCube consoles in its home turf between Sept. 14, its Japan debut, and March 31.

Imanishi also said 2.23 million GameCube consoles were sold in the United States between its November launch and March.

He said sales were also going well in Europe, where the game machine was introduced May 3.