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Nintendo cuts GameCube price

The Japanese video game giant drops the price of its home console to less than $100 in time for the holidays. Does the move signal a shorter life cycle for the machine?

Japanese video game giant Nintendo on Wednesday slashed the price of its GameCube console to less than $100, in an effort to revive sagging sales.

The company announced that, effective Thursday, the console will sell for $99.99 in North America, down from the current price of $150.

George Harrison, senior vice president at Nintendo of America, said the company expects the price cut to boost GameCube's market share--currently at about 20 percent worldwide--several points. The cut is intended to appeal to mass-market consumers who don't have a game machine and to experienced gamers who are looking for a second console, he said.

"We think this represents an opportunity for us to sell a GameCube to someone who bought a (Sony PlayStation 2) three years ago and is looking for something new," he said. "We believe this is the best value in the history of video games."

GameCube sales have waned over the past year, eroding support from third-party game publishers and forcing Nintendo to halt production for several months to eat up excess inventory.

Nintendo's move was not expected to trigger an immediate wave of retaliatory price drops by competitors Sony and Microsoft, as has happened with previous price moves.

Billy Pidgeon, an analyst for research firm Zelos Group, said the price cut may not inspire a major sales boom for Nintendo, given that previous bundling deals had already effectively lowered the GameCube's price to $100. He expected that Microsoft will wait to gauge the sales effect of the price reduction before making any retaliatory moves.

"It's possible Microsoft could see this as a competitive move by Nintendo and might cut prices on the Xbox, in which case you'd have a sort of bottom-up round of price cuts," he said. "But I don't think they're going to do anything right away."

A Microsoft representative said the company would stick with the Xbox promotional package it recently announced for the holiday shopping season.

The price drop also could signal a shorter life cycle for the GameCube, as console makers have traditionally waited until the last year or so of a game machine's life to hit the $100 point.

Nintendo executives have vowed that they won't enter the market behind competitors, as happened with the current generation of consoles, meaning details on a new Nintendo console could come as early as next year, Pidgeon said. "They may announce sooner than Microsoft or PlayStation," he said.