First quarter sales of game consoles have begun to show that the industry, hammered by the recession, is making a very modest comeback. Microsoft's (MSFT) entertainment division, which is primarily made up of sales of the Xbox 360, posted a small profit in the firm's last reported quarter.
Some of the increase in console sales were probably racked up when Sony (SNE) cut the price of its PS3 by $100 last August, slashing the retail price by about a third. Microsoft immediately followed with a $100 price cut of its own. A month later Nintendo cut the price of its flagship product, the Wii, by $50.
Nintendo has been the unit sales leader in game consoles since the three companies launched the current generation of products. But the company has seen its lead cut. Its Wii has gotten "old" and has not had a major upgrade in over a year.
Nintendo now intends to widen its advantage over the competition. Several media sources say that the Japanese company will launch a new version of the Wii in a package that will include several accessories that it used to charge separately for. According to CNET, "Starting May 9, the company will include its Wii Sports Resort game and MotionPlus controller with new consoles -- with no price increase. The Sports Resort and MotionPlus bundle sells separately for $49.99."
While the price of the package will remain at $199, Nintendo should draw new customers, enticed by getting a number of new features for free.
The Wii has always been aimed at casual gamers -- those who don't want to read a 500 page instruction book and take hours, if not days, to become proficient. The Xbox360 and PS3 are considered hardware for more serious gamers who want to use more complex software and game packages. The Wii's new pricing should extend its market for the novice, just as the video game industry has begun to rebound.