Nintendo Wii Price Cut Is a Boost for Videogaming

The Nintendo Wii price cut that Nintendo announced at the Tokyo Game Show was welcomed by the videogaming industry. After all, the Wii is the most popular of the current generation of consoles, selling about as well as the PlayStation 2 did when it was at similar point in its lifetime cycle and game makers need the device to continue to move units.

Analysts are also happy about the news, Colin Sebastian, who works for Lazard Capital Markets, saying that “While higher hardware prices have constrained sell-through of many traditional video games, in our view, we believe several years remaining in the current cycle, lower console prices, and more innovative and social game-play could help drive a rebound in growth in 2010.”

The 50-dollar price cut for the Nintendo Wii should give the industry a boost in the run up to Christmas when sales for both home gaming consoles and videogames are set to spike and bring in profits for manufacturers and publishers.

Still, the analyst believes that the rather sharp drop in sales for the Wii, especially when compared to 2008, will not be completely solved by the price cut. There's a possibility that the reduction in sales might be a simple effect of market saturation.

Both the Xbox 360 from Microsoft and the PlayStation 3 from Sony now have a reduced price of 299 dollars, since early September, aiming to boost sales. Both companies are also providing further enticements to make people buy their devices as the former is offering a 50-dollar rebate if you pick up the Elite version before October 2, while the latter has just announced bundles including a 250 GB hard drive version of the PS3 that will be sold beginning with October. The fight definitely sounds interesting.