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Nintendo Ups the Ante in Second-Generation Console Wars

Nintendo vice president calls price drop "an aggressive move by Nintendo"

It may have come as a bit of surprise to the casual video game enthusiast, but certainly Nintendo’s announcement Wednesday of a price drop of the GameCube console system to $99.99 is good news for all console gamers.

While the industry itself enjoys year-round success, the forthcoming holiday season accounts for 55 percent of annual sales. With strong third-quarter titles coming from the second-generation console platform competition, it was up to Nintendo to answer, and answer it has.

George Harrison, senior vice president, marketing and corporate communications, Nintendo of America, addressed many issues during a teleconference Wednesday, September 24.

"This announcement signals several things," Harrison said. "First, it’s an aggressive move by Nintendo, sending a message that we’re as intent on succeeding in this generation of consoles as we’ve ever been before. Second, this is an indication that this entire generation of consoles is about to enter the true mass market. This is the market of the casual gamer, who has always responded overwhelmingly to the ageless appeal of Nintendo.

"And third, this price is the perfect counterpoint to what we feel is an unquestioned Nintendo GameCube advantage in hit software releases for the upcoming holidays."

This is a prime time for the GameCube price cut. On November 17, Nintendo will be releasing Mario Kart: Double Dash, a hot title at E3 in Los Angeles this past May, and one of the titles that will likely power sales for Nintendo. Coupled with the release of Mario Party 5, Pokemon Channel, Kirby Air Ride and 1080: Avalanche - all in-house development - and Nintendo is flexing a little muscle of its own. Then there are the third-party titles.

"Just as important are the tremendous contributions from all of our third-party partners," Harrison said. "The line-up includes Nintendo GameCube exclusives, like Capcom’s Viewtiful Joe and Lucas Arts’ Star Wars: Rebel Strike. Between now and the end of the year more than 100 new Nintendo GameCube games will hit the shelves covering every popular game genre and the most popular franchises, including Harry Potter, James Bond and The Lord of the Rings, those last three of course are from Electronic Arts.

"By New Year’s Day, the Nintendo GameCube library will swell to 320 titles. We’ve also added new value to our player’s choice line up. We’ve just lowered the price on six popular first party games to $19.99 or $29.99.

"To put that in perspective, consider this. Beginning tomorrow, consumers will have this choice. They can pay $180 for an aging PlayStation2. Or they can spend the same amount and get the more powerful Nintendo GameCube and a copy of Super Mario Sunshine and a copy of Metroid Prime and a copy of Star Fox Adventures. That’s an instant package of game fun for everyone in the family. And of course, the new Nintendo GameCube price makes it a no-brainer for current owners of competing consoles looking for a second system. Quite frankly, we believe this is the best value in the history of console video games."

Harrison did some number crunching, demonstrating the GameCube rising stature in the marketplace.

"Around the world, Nintendo GameCube continues to be the number two selling console in this generation," Harrison said. "In Japan in the last few weeks Nintendo GameCube has matched the sales of PlayStation2 thanks to the launch of a great title called Tales of Symphonia. Here in the U.S. the trends are also strong. Let me share some numbers with you. So far in 2003, only one console has sold more units year to date than last year and that console is Nintendo GameCube, up three percent. Microsoft’s Xbox units are down three percent and PlayStation2 down 14%.

"As I’m sure you know, the top selling console game this year is Madden 2004, available, of course, on all three platforms. But the number two title is console exclusive: The Legend of Zelda and The Wind Waker, only on Nintendo GameCube. Some people say, well sure, Nintendo can sell Nintendo games, but what about third-party titles? Well as many of you know in recent weeks Namco released its widely anticipated Soul Calibur 2 for all three platforms. Of course, logic dictates that it would sell best on the console with the largest installed base. But sometimes logic doesn’t hold.

"Independent sales data shows that to date the Nintendo GameCube version of Soul Calibur 2 featuring Link has outsold not only the Xbox version but it has also outsold the PlayStation2 version by a margin of 3 to 2. This is an amazing accomplishment when you consider the difference in installed bases between the PlayStation2 and Nintendo GameCube. This is strong evidence of the power of close collaboration with an experienced publisher and the strategic use of a key Nintendo character."

To support the quality of its products, Nintendo is also taking innovative steps in marketing as well.

"We’ve just finished the 25 market Nintendo Fusion Tour," said Harrison, "marrying great Nintendo GameCube products with music concerts headlined by Evanescence, one of America’s hottest bands. And we’re just about to embark on a brand new mall tour that will show off the Cube in its best light, in 12 markets during October, November and December.

"Finally, in the very near future, we’re going to launch an umbrella marketing campaign that will have game players across the country looking at Nintendo in a whole new way. You’ll get the details on that in a matter of days."

But Harrison’s comments were not only connected to the GameCube, but embraced the Game Boy Advance as well, which he termed the "hottest selling game system in the world!"

"Here in America, counting from the day it launched in June of 2001 it has outsold PlayStation2. During this calendar year, Game Boy Advance has sold through 22% more units than PlayStation2," Harrison said. "In the last three months the advantage is almost 50%. If there’s a race between all game systems Game Boy Advance is winning and going away."

And the Game Boy Advance is not just for younger players, according to Harrison.

"Our internal research shows that 33% of players of our original game boy advance are 18 or older," he said. "To date, early data puts the 18+ players for Game Boy Advance SP at 45% – nearly half of all owners. Those older players, not surprisingly, are buying games that appeal to them. That helps explain how the new Square Title, Final Fantasy Tactics, has moved more than one hundred fifty thousand copies in the U.S. in just two weeks.

"And the game lineup for Game Boy Advance is loaded. Between now and Christmas, you’ll see the world’s all-time best selling game, the N-E-S classic Super Mario Brothers 3 arrive on Game Boy Advance. And a brand new title, Mario and Luigi: Superstar Saga is set to turn heads. As will Fire Emblem and Sword of Mana, two great role-playing games for the serious gamer."

Products such are Metroid Zero Mission and Mario Golf are slated for release in early 2004, but with those titles leading the charge, as well as other third-party titles, Nintendo will push the number of GBA-specific titles to more than 500.

"There are two sides to the game industry coin, console and handheld, and Nintendo is the only face you’ll see on both of them," Harrison stated. "Make no mistake; we’re entering this holiday season playing offense with a great new price for Nintendo GameCube and a great line up of software for both systems."

 

 



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