No More Discounts As Game Vendors Chase Profits

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As Sony Computer Entertainment Australia, rake in big profits from selling the most expensive PS3 gaming console in the world, both Microsoft and Nintendo are setting themselves up for a brutal war with Sony who last month launched a brand new low cost PS3 which has been stripped of several features in an effort to reduce costs.

In a few weeks time Nintendo will launch a new-and-improved Mario and Microsoft an elite squad of “Halo” troopers in an effort to get sales during the peak Xmas buying period.

In recent months games sales have “tanked” in Australia. In the USA games industry players have suffered six straight monthly declines.

Recently Microsoft and Sony slashed the costs of their consoles while also launching value pack deals. Nintendo Australia chose not to pass on recent global price cuts.

In an interview with BusinessWeek, Michael Goodman, an independent video-game consultant said “An awful lot of merchandise is still going to go out retailer doors this holiday season, because video games are still at the top of many kids’ wish lists. But maybe instead of getting two games, you only get one game. Or instead of getting a peripheral, you just get a game. Those are the kinds of decisions I think parents are going to be making.”

Analysts are also saying that consumers should not expect to see any new big blockbuster games, instead game publishers and console makers are leaning heavily on new adaptations of tried-and-true titles.

Nintendo, for example, will release “New Super Mario Bros Wii” on Nov. 15, updating the venerable game for the Wii console and its motion-sensitive controller.

Nintendo is billing it as the first Mario game with a true multiplayer mode.

 

 

In a recent press release Cammie Dunaway a Nintendo vice president said the company hopes the game will appeal to new gamers, potentially lifting sales of the Wii, but also to experienced gamers who already own one of the Nintendo consoles.”It’s one of these Nintendo games that operate on multiple levels,” Dunaway said.

Other key titles coming from Nintendo include Wii Fit Plus, due this week. This is a new version of the software for its pressure-sensitive Wii Balance Board accessory.

 Microsoft is banking on an old favourite with the release of Halo 3, Forza 3″ and “Left 4 Dead 2. Sony with their new $499 PS3 console which in Australia is $150 dollars dearer than the same product in the USA is counting heavily on sequels, including “UNCHARTED 2: Among Thieves” and “Ratchet and Clank Future: A Crack in Time.” The company says 25 exclusive titles will be available for the PS3 this Xmas.

Anita Frazier, an NPD Group analyst told BusinessWeek that the gaming companies would likely be leaning on sequels regardless of the economic situation.

“Well-known and loved franchises are the bread and butter of the industry and new franchises are risky, as always. I also don’t think the economy is playing a part here,” she wrote in an email. “Remember that most games take two-plus years to develop, so games planned for this holiday would have been in development prior to the economic meltdown.”

In Australia Sony’s console is in third place behind No. 1 Nintendo and No. 2 Microsoft though this appears to not be a bad thing for the SCE subsidiary who last financial year raked in over $5.87 million dollars in profits by price gouging Australian consumers. The result was achieved on falling revenues.

The battle for supremacy in the gaming market running into Xmas is already underway.  Sony has their overpriced PS3 “Slim,” with a 120GB hard drive while Microsoft has dropped the price of the 120GB Xbox 360 Elite.

“The Elite is a great value and we certainly expect a lot of consumers to respond positively to the offer,” said David Dennis, a Microsoft spokesman. Microsoft cites NPD data showing that Xbox 360 unit sales in the U.S. rose nearly 17 percent in the first eight months of this year, making it the only console to show overall growth during that time period.

According to Nintendo Australia executives there will be no price cuts to the $399 Nintendo Wii which is still the cheapest gaming console in Australia however it is tipped that the Company is set to launch several new games..

 

 

 

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