Nintendo to Reduce Japan Prices of Handheld DS Game Player as Much as 21%

Nintendo Co., the world’s biggest maker of portable video-game players, plans to cut the price of its DS handheld device for the first time in Japan on June 19 to rekindle stagnating domestic sales.

The recommended retail price for the DSi model will be reduced 21 percent to 15,000 yen ($164) from 18,900 yen, according to a statement today on the company’s website. Nintendo also said it will lower the price of the DSi LL, which has a larger screen, by 10 percent to 18,000 yen.

Nintendo, forecasting lower profit and revenue this fiscal year, is counting on renewed demand for the touch-screen DS to offset declining sales of the Wii home consoles and software. President Satoru Iwata plans to introduce a 3-D model of the handheld and a heart-rate-tracking “Vitality Sensor” accessory for the Wii to revive earnings growth.

“This is the right move, considering that the DS is pricey for a handheld and the company wants to sell as many as possible before the next model arrives,” said Eiji Maeda, a JPMorgan Chase & Co. analyst. The company may also cut prices overseas, said Maeda, who recommends buying Nintendo shares.

Nintendo dropped 3.4 percent to close at 26,170 yen on the Osaka Securities Exchange, outpacing the 1.1 percent decline by the benchmark Nikkei 225 Stock Average. The stock is up 19 percent this year, after falling 35 percent in 2009.

Falling Sales

“This price reduction is aimed at spurring demand and bringing us closer to our goal of a DS in every home,” Yasuhiro Minagawa, a spokesman at the Kyoto-based company, said by phone. The company’s earnings outlook for the year ending March 2011 takes into account the discount, Minagawa said. He declined to comment on overseas pricing.

Sales of the DS in Japan fell 1.5 percent to 3.98 million units in the 12 months ended March 31, according to Tokyo-based research firm Enterbrain Inc. Sales of the handheld in the country exceed 30 million units since the device’s release in December 2004, Nintendo said today.

The company lowered the price of the original DS in the U.S. and Europe 13 percent to $149.99 in August and October 2005 respectively. The DSi retails for $169.99 and DSi LL for $189.99 in the U.S., according to bestbuy.com, an online retailer.

Global sales of the Wii will probably fall 12 percent to 18 million units, after declining for the first time last fiscal year, Nintendo said last month. DS handheld sales worldwide will rise 11 percent to 30 million from 27.1 million, it said.

3DS Handheld

Nintendo in March said the 3DS handheld, which goes on sale this fiscal year, will allow users to see 3-D images without the need for special glasses. The device will be the company’s biggest portable product introduction since 2004, Nintendo of America President Reggie Fils-Aime said in an interview in April.

The Wii faces competition from Sony Corp.’s PlayStation 3 and Microsoft Corp.’s Xbox 360, which will incorporate motion- sensitive controls in new models, while Apple Inc.’s iPhone, iPad and iPod Touch take on the DS.

Sales of Apple’s iPhone and iPod Touch, which can be used to play games, will reach 100 million units by summer, Chief Executive Officer Steve Jobs said in May. The Cupertino, California-based company also sold 2 million touch-screen iPad tablets in the U.S. in the two months since April 3.

Sony, which dominated the previous generation of game consoles with its PlayStation 2 player, is also introducing its “Move” motion-sensing controller for the PS3 to appeal to casual users and narrow Nintendo’s lead.

Microsoft’s “Natal” controller-free system lets players operate Xbox games with body motions instead of pressing buttons or waving a device.


To contact the reporter on this story:
Pavel Alpeyev in Tokyo at 
palpeyev@bloomberg.net.


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