Fresh off bumper earnings, Nintendo ruled out a price cut for its smash-hit Wii video game console Friday and announced the company will being selling the Wii in China next year.
Nintendo President Satoru Iwata also unveiled a gift-giving feature that will allow users to send each other games over the Internet, boosting the Wii's network offerings.
Profits at Nintendo have surged on the runaway success of the Wii and the portable Nintendo DS machine in North America, Europe and Japan, forcing Sony and Microsoft to slash console prices in a desperate catch-up bid ahead of the holiday season.
Iwata said the company was struggling to meet demand of the Wii and a price cut was out of the question. The Wii sells for $249.99 in North America, 249 euros in Europe and 25,000 yen in Japan — all less than Sony's PlayStation 3 or Microsoft's XBox 360.
"We're still focusing on how to meet booming demand," Iwata said Friday. "We're absolutely not considering a price cut." He said Nintendo was ramping out 1.8 million Wii consoles per month but that a supply crunch was inevitable during the Christmas sales.
A three-way battle
Nintendo's confidence ahead of the critical Christmas shopping season reflects the Wii's strength in a three-way battle of current generation video game consoles against the PS3 and Xbox 360, as well as the continued popularity of the handheld DS console.
The maker of Pokemon and Super Mario games has chosen a different strategy from Sony and Microsoft, wooing novices with low-cost and user-friendly machines unlike the more expensive consoles of its rivals.
With its wandlike remote control for fishing, golfing, tennis and other video games, Nintendo's Wii console has won over fans from young children to rehab patients.
Sony's top-line PlayStation model, with an 80 gigabyte hard drive, now costs $499 in the U.S., down from $599. A new low-end model with a 40-gigabyte drive will go on sale Nov. 2 for $399.
Microsoft's Xbox 360 costs $350 in the United States.
Nintendo has also won a following for the DS console — which stands for "dual screen" — with a lineup of low-cost, casual software like "Nintendogs," "Brain Age" and "Nintendo Cooking."
Nintendo shipped about 3.9 million Wii units around the world in the last three months, bringing the total since its launch last year to 13.2 million units. The company has sold 53.6 million DS consoles.
Iwata said it was banking on the "Wii Fit" game due out later this year in Japan to buoy future sales. The game allows players to weigh themselves, check their balance and play fitness games like yoga, hula hoops and ski jumping.
Sending games as gifts
Nintendo also unveiled a function Friday that allows users to send each other games over the Internet using the Wii's shopping channel.
With a few clicks, a user will be able to select a game to send as a gift to another user online, Iwata said. When the recipient accepts, the Wii automatically launches the shopping channel and begins the download.
"We think this will be a breakthrough in encouraging customers to spread news of fun games word of mouth," Iwata said. "We also hope to spur more users to connect their Wiis to the Internet," he said.
Looking ahead, Iwata said the company would start selling Wiis in China next year, opening up a previously untapped market for the Kyoto-based company.
"We barely have enough Wiis to meet global demand this year. But next year, we can bring the Wii to China," Iwata said.
Nintendo still needed to work with Chinese games developers to craft games suited to the market there, Iwata said.
He declined to give a sales target, but said Nintendo's "future potential there is huge."