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Nintendo Targets Bargain Basement

The Wii game console debuts at $250, less than the prices of Microsoft and Sony machines.

September 15, 2006|Dawn C. Chmielewski | Times Staff Writer

Nintendo Co. said its Wii video game console would go on sale Nov. 19 in the United States for about $250, setting the stage for a three-way race that may have only two horses this holiday season.

The Japanese company, best known for such whimsical game characters as Donkey Kong and the mustachioed Mario, will have the least expensive next-generation console on the market this holiday season. And analysts expect Wii's price -- together with its novel game controller -- to make it a strong seller.

Indeed, Nintendo and Microsoft Corp.'s Xbox 360 are poised to exploit anticipated shortages of Sony Corp.'s new PlayStation 3 -- giving the two challengers an edge over Sony's dominant game system.

"Nintendo is going to shock people with how many they continue to sell and Sony is going to dismay people," said Michael Pachter, a game industry analyst for Wedbush Morgan Securities in Los Angeles.

Microsoft got an early -- if faltering -- lead on the next-generation console market with its introduction last year of the Xbox 360. Arcadia Investment Corp. analysts say Microsoft is on track to sell about 4.5 million units this year, based on the rate of sales this summer.

Nintendo said it began manufacturing its Wii game console this summer and planned to ship 4 million systems worldwide by the end of the year. It'll come with a remote control, an attachment called the Nunchuk controller and a collection of five sport games that take advantage of the remote's motion-sensing capabilities.

The Wii also has the capability to connect to the Internet, allowing gamers to download a browser to surf the Web and to fetch news updates and weather forecasts online. Users can also download classic Nintendo games that can be stored on memory cards.

Sony, meanwhile, announced this month that problems manufacturing a key component of its PlayStation 3 would cause it to delay its European launch and cut in half the number of units available in the U.S. and Japan.

The company plans to ship 400,000 PlayStation 3 units to the United States for the console's November launch and 1.2 million by the end of the year. Sony expects to have 6 million of its new game system worldwide by March 2007, the end of its fiscal year. The PlayStation 3 will be the most costly console on the market, selling for $499 and $599, depending on the amount of storage capacity.

"We will have enough quantities at Christmas to satisfy the needs of our hard-core gamer," said Dave Karraker, a spokesman for Sony Computer Entertainment Inc. "And with 1.2 million through the holidays, we won't be seeing the stock dips -- the severe stock dips -- that plagued another system that shall remain nameless last year."

P.J. McNealy, a game industry analyst for American Technology Research Inc., said Sony's shortfall would create windfall opportunities for its rivals.

Nintendo's Wii will "really steal some thunder this holiday" because of its price and Sony's production limitations, McNealy said. Similarly, he said, Microsoft's Xbox 360 is poised to capture the core gamer aching for a next-generation system.

"There are going to be more than 2 million consumers this holiday who are predisposed to want to buy a PS3 who aren't going to be able to," McNealy said. "A certain percentage of those are either going to wait or buy a Wii or buy a 360."

Pachter said that although Microsoft and Nintendo would doubtless sell "a ton of boxes" this holiday season, the true test would be Christmas 2007. That's when gamers will decide whether the futuristic features Sony has been pushing -- support for Blu-ray movie discs and the highest of high-definition resolution -- is something they're willing to pay a premium for.

"If Sony is able to create the perception in consumers' minds that PS3 games are better, suddenly the Xbox 360 doesn't look as good as before," Pachter said. "Down the line, are the games going to be better? Sony is working awfully hard to create that perception."

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