Analysts are wondering what Nintendo will do in order to regain the upper hand as Microsoft has slashed the price of the Xbox 360 Arcade to bring it just under that of the Wii. Well, it seems that the Japanese company wants to focus on making its console more attractive to potential buyers by addressing some of its weaknesses. First up on the list of priorities is doing something about the limited storage space of the Nintendo gaming console.

Reggie Fils-Aime, who is the president of Nintendo of America, has recently stated that a solution is being prepared but that it would not necessarily be an external add on. He is quoted as saying that “I want the people to have the right expectations. We have never said that it will be a hard drive, nor have we mentioned how we will fix this issue, but we are going to deliver a better way to store games”.

At the moment, the Wii offers just 512 MB of built-in flash memory and there is an option to save data on SD cards that can have up to 2GB. But the launch of the WiiWare service, that offers a host of downloadable titles, showed the limitations inherent with such limited storage space.

Nintendo's former Marketing vice president Perrin Kaplan suggested that players could just delete the games that they are not playing as they can download them again later at no extra charge.

An announcement on the matter is expected before the holiday shopping season. Offering a solution to the storage issue might boost the position of the Nintendo Wii and give it a better chance to cope with the expected rise of the cheaper Xbox 360 Arcade. By focusing on giving something more valuable for the same amount of money, Nintendo can count on raising customer satisfaction.