Tokyo - Japan's Nintendo Co does not plan to cut prices of its popular Wii console or DS handheld game system anytime soon, the company's president said Friday.
Though hardware tends to fall in price over time, it's not a good path for Nintendo to follow, said Satoru Iwata at a news conference a day after the company reported record earnings last fiscal year.
That would, he said, only leave gamers who bought early feeling ripped off.
"I don't think that model is correct," Iwata said, despite signs that sales of the DS may be tapering off.
The Wii retails for about $250 in the US and ¥25 000 in Japan, unchanged since its launch in November 2006. In contrast, Sony has slashed the price of its 20-gigabyte PlayStation 3 twice so far to boost demand.
The Kyoto-based company expects to sell 28.0 million DS units this year through March 2009, down from 30.3 million last year.
Iwata said that while sales in Japan have slowed, the DS maintains strong momentum in the United States and Europe with considerable room for growth. The DS Lite sells for ¥16 800 in Japan and $129.99 in the US.
Nintendo's main focus, he said, is to ensure that users remain engaged with its products, including the DS, by continually offering new software, services and accessories. He hinted at projects in the pipeline but said he couldn't elaborate.
"Our biggest fear is for people who have bought the DS to shut it away in a closet," Iwata said. "We want people to use it in their everyday lives."
Still, the falloff in DS sales is a main reason why the company tempered its growth expectations this year after a nearly 48% surge in net profit last fiscal year to ¥257.34bn and a 73% gain in global revenue to ¥1.672 trillion.
"The speed last year was beyond our expectations," Iwata said.
Wii main driver of growth
For this fiscal year, Nintendo projects a 26.3% rise in net profit and just a 7.6% increase in sales. It pegs a modest 8.8% climb in operating profit.
Like other Japanese exporters, Nintendo also faces a stronger yen that threatens to erode the value of overseas sales, which accounted for 81% of total revenue last year.
The company assumes a foreign exchange rate of ¥100 to the US dollar this year, compared with ¥114 per dollar a year earlier.
Nintendo's main driver of growth this year, then, looks to be the Wii - a runaway hit that has outsold Sony Corp's PlayStation 3 and Microsoft Corp.'s Xbox 360 since its release in November 2006.
With easy-to-play games and motion-detecting controllers, the Wii has done well by attracting new and casual gamers including women and senior citizens.
Consumers around the world have snapped up nearly 24.5 million of the consoles so far, and Nintendo says it expects to sell 25 million units this year, even with a gloomy outlook for the global economy.
"Historically, the video game business hasn't been influenced by economic swings," Iwata said, adding that in tight economic times, people often opt to stay home and play video games in place of more expensive activities.
The company will release several new games this spring, including a racing game called the Mario Kart Wii. The Wii Fit exercise game, which has sold well in Japan, will also make its debut soon in the US and Europe.