NINTENDO TO CUT GAMECUBE'S PRICE IN EUROPE AND JAPAN

Nintendo Europe said Fri. that price of console would be dropping Fri., Oct. 10, from ?129.99 ($225.74) to ?79.99 (?138.91 at $1 = ?0.623) and from 199 ($241.94 at $1 = 0.890) to 99 ($120.36) in rest of Europe Oct. 17. European price cut also followed decision by competitor Sony Computer Entertainment to reduce price of PS2 13% to ?139.99 (CED Oct 2 p4).

Nintendo also plans to cut price of GameCube from ?19,800 ($185.82 at $1 = ?115.253) to ?14,000 ($131.38) Oct. 17 in Japan, published reports said. But NOA couldn’t confirm that by our deadline. Japan at this point remains only market in which Nintendo’s console has sizable lead over competing Xbox from Microsoft, although Microsoft and Nintendo still trail far behind Sony’s PS2 in all major markets. Reports also said company reduced its profit expectation for fiscal year ending in March to ?60 billion from ?65 billion because of increase in foreign exchange losses in first half of year. Company also now expects to report loss of ?3 billion for first half of year instead of ?15 billion profit, reports said, and Nintendo reduced its interim sales forecast to ?210 billion from ?230 billion because of drop in GameCube pricing. Reports said loss in first half would be Nintendo’s first for any first half or full-year period since company became listed publicly in 1962.

On fiscal situation, Nintendo issued statement Fri., saying only: “Nintendo Co., Ltd. today reported preliminary half-year global sales and operational profits in line with its original yearly forecast for the period. However, drastic fluctuations in currency exchange rates resulted in notable declines in recurring and net profits. These are only paper losses, the result of accounting procedures which require foreign holdings to be translated to yen. There is no real decline in the value of those holdings in their native currencies. Furthermore, when final half-year results are reported in November, we anticipate growth in sales and operational profits from the same period a year ago. Finally, Nintendo expects to grow market share globally in the 2nd half of its fiscal year owing to increased demand for Nintendo GameCube, continued high demand for Game Boy Advance and the impending launches of key software titles including Mario Kart: Double Dash, Mario Party 5, Pokemon Colosseum and Super Mario Advance 4: Super Mario Brothers 3.

Nintendo Europe didn’t give reason for price cut at this time. Nintendo Europe Managing Dir.-Sales & Mktg. David Gosen said only: “There has never been a better time to get a GameCube and with this new price we want every household to have one.” He also praised strong quality of software for console. Company said: “In the run up to Christmas 2003 players will see Nintendo hit top gear with some of the most anticipated games for the Nintendo GameCube. The [system] will boast a library of over 200 games by Christmas, many of which are exclusive.” It said “key games” scheduled to ship this holiday season included Mario Kart: Double Dash and Soul Calibur II.

Lisa Morgan, deputy CEO designate of U.K. retail chain Game, indicated Fri. that British retailers would be supporting price cut to make sure platform was successful this season. She said Nintendo’s price cut would “provide a real boost to sales, and is supported by some terrific new software titles.” However, at least certain mass merchants in U.K. already had started decreasing their support for Nintendo console because of weak sales. It wasn’t clear which U.K. retailers no longer were carrying system.

Also following similar recent announcement in U.S., Nintendo Europe said Fri. that Player’s Choice line of budget-priced titles for GameCube would be expanding this month. It said that starting Oct. 10, Mario Party 4, Metroid Prime, Star Fox Adventures and Super Mario Sunshine would be newest additions to line. Company said games would be available in U.K. at ?19.99 and in Europe at about 30 starting Oct. 17.