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Thursday, December 04, 2003
Game-console makers cut prices ahead of yearend showdown in Japan

Makers of video game consoles are gearing up for the all-important yearend shopping season.

Dangling marked-down price tags before the eyes of consumers, they hope to jolt slowing sales before they release their next-generation models at least a year from now.

The first firm to implement a markdown was Nintendo, which cut the price of its GameCube console by 5,800 yen to 14,000 yen in mid-October. Japanese GameCube sales for the six months that ended Sept. 30 had fallen 41 percent to 200,000 units.

The firm also set the prices of three new software titles released in November -- "Pokemon Colosseum," "Mario Kart Double Dash!!" and "Mario Party 5" -- at 5,800 yen, which is 1,000 yen cheaper than previous titles.

Shoppers can now buy a GameCube console and get one game for the preknockdown price of 19,800 yen -- a marketing strategy that targets core users, children with a limited budget.

Nintendo officials said the price of the console-game package -- 19,800 yen -- is aimed at having a psychological effect on Japanese shoppers, mirroring the $99 or 99 euro price tag placed on GameCube units in the U.S. and Europe.

Likewise, Sony lowered the price of its PlayStation2 console last month from 25,000 yen to 19,800 yen, a figure described by company officials as a "magic price."

With more than three years having passed since the product's release, the firm was concerned that the price cut would meet with a limited consumer response.

But the firm has enjoyed brisk sales since the Nov. 13 markdown, according to Masatsuka Saeki, executive vice president of Sony Computer Entertainment Japan.

Coupled with the price cut, the release of popular titles such as "Minna-no Golf 4" and "Gran Turismo 4" will help attract new users during the yearend season, he figured.

Last but not least, Microsoft Corp. cut the price of its Xbox console from 24,800 yen to 16,800 yen on Nov. 20.

Since its Japan launch in February 2002, the U.S. computer software titan has a minuscule presence in the game console sector here, having sold only 450,000 units in Japan by the end of June.

With the Japanese sector dominated by PlayStation 2, 14 million units of which have been sold, consumers here have cited few reasons to pick up an Xbox, which suffers from a dearth of game software titles.

But the company said it aims to crack the market by pitching online games, one of the sectors expected to grow.

With a built-in hard disk drive and an Ethernet local area network system port, the Xbox holds an advantage over PlayStation2 and GameCube in terms of its ability to accommodate broadband data communications, such as online games, according to Yoshihiro Maruyama, who heads Microsoft's Xbox business in Japan.

Accordingly, Microsoft is pushing a 19,800 yen package that includes a console, two game titles, a DVD player and a card that allows users to play free online games for two months.

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