Nintendo says Wii losing luster but no price cut

Posted at 04/09/09 2:50 PM

TOKYO - Nintendo admitted Thursday that its hit Wii video game console was going through its toughest time yet in the competitive Japanese market, but it said there was no plan to cut the price.

"The Wii is in the most unhealthy condition since it hit the Japanese market," Nintendo Co. president Satoru Iwata said. "The current condition in the Japanese market is not the one we want."

But a price war with rivals was not the answer as Nintendo is already the market leader, he said.

"A price cut in a difficult economy cannot really excite the market and drive up sales. As of now I really don't think that a price cut is a good option for us," he told a news conference.

Industry figures showed this week that the rival Sony PlayStation 3 had outsold the Wii in Japan for the first time in 16 months, with sales of the Nintendo console dropping almost two-thirds from a year earlier.

Japanese sales of the PS3 surged 80 percent in the five weeks to March 29 from a year earlier to 146,948 consoles, while demand for the Wii plunged almost 63 percent to 99,335, publishing firm Enterbrain Inc said.

Iwata said the Wii had flown off the shelves after its launch in 2006 thanks to the popularity of a few games. Nintendo has sold more than eight million Wii machines in Japan, but demand is now flagging.

"The speed with which people get tired of any new entertainment is faster in Japan than in overseas markets," Iwata said.

The video game titan is pinning its hopes on new games and software such as Wii Sports Resort -- a sequel to the popular Wii Sports that will go on sale in Japan in June -- to energise sales of the console, he said.

Nintendo has enjoyed immense worldwide success with the family-friendly Wii, which has appealed to people buying a video-game machine for the first time.

While Sony put the emphasis on chip power and ultra-realistic graphics for its PlayStation 3, Nintendo opted to develop a cheaper, easy-to-use console that would appeal to a wider audience.

The success of the Wii has rewarded Nintendo with surging profits in recent years. More than 10 million Wii machines were sold in the United States in 2008, setting a new industry record.