UPDATE 3-Nintendo Wii in doldrums in Japan, plans fight-back

Thu Apr 9, 2009 6:38am EDT

Related Topics

* To debut new key software in June to revitalise Wii

* Plans no hardware price cuts at the moment

* Strong initial demand for DSi in North America, Europe

* Shares end 2.6 pct lower vs Nikkei's 3.7 pct gain (Adds analyst quote, details)

By Kiyoshi Takenaka and Sachi Izumi

TOKYO, April 9 (Reuters) - Nintendo Co Ltd 7974.OS said sales of its Wii game console have lost some steam in Japan, but it aims to boost demand again by launching a new version of its blockbuster "Wii Sports" software in June.

Nintendo President Satoru Iwata said he had no plan to cut hardware prices. "Wii (demand) is not vigorous at the moment in Japan," Iwata told reporters at a lunch meeting. "In fact, it is in the most unhealthy situation since its launch in Japan."

"If our products are not much different from competitors', price cuts would generate significant fresh demand. But video games are just not that kind of product."

The Wii far outsells Microsoft Corp's (MSFT.O) Xbox 360 and Sony Corp's (6758.T) PlayStation 3 globally.

But in Japan, sales of the PS3 outstripped those of the Wii in March for the first time in 16 months thanks to new PS3 titles from Sega Sammy (6460.T) and Capcom (9697.T), game magazine publisher Enterbrain said this week.

In a bid to put vigour back into Wii sales, Nintendo plans to launch "Wii Sports Resort" in June in its home market, followed by overseas release in July.

Nintendo's earlier "Wii Sports" game helped drive its console sales. The game allows users to play baseball, tennis and other sports using a motion-sensing controller.

Wii Sports Resort lets users throw a frisbee to a virtual dog or duel one another with swords with the controller, which looks like a TV remote and enables gamers to direct on-screen play by swinging it like a racket or baseball bat.

Strong sales of both the Wii and Nintendo's handheld DS player despite the global economic slowdown had led the company to expect a record 530 billion yen operating profit for the year that ended on March 31.

That contrasts sharply with other major Japanese exporters such as Sony and Toyota Motor Corp (7203.T), which are set to post billions of dollars of losses for the business year just ended amid slumping demand and a strengthening yen.

Nintendo's shares closed down 2.6 percent at 28,000 yen, while the benchmark Nikkei average .N225 gained 3.7 percent.

NEW DS DEBUT

"The software is one of the key games Nintendo will launch this business year," Rakuten Securities analyst Yasuo Imanaka said. "I think it will definitely be software that can propel sales of hardware," he said.

Nintendo first showed its Wii Sports Resort game to the media last July, along with "Wii Music", which lets players simulate more than 60 different instruments. Back then, it said it would launch the sports game in spring 2009.

Iwata said the latest model of its DS handheld gear, the DSi, met brisk initial demand when it was launched in North America and Europe earlier this month, selling 300,000 units in each region in the first two days.

"The DSi has received a warm welcome around the world," Iwata said.

Nintendo's strategy to broaden the gaming population by offering intuitive and easy-to-play games, rather than focusing on high-speed plays and life-like graphics for core gamers, has been successful.

Industry specialists say video games are generally better positioned to weather a slowing economy than such big ticket items as cars and flat TVs.

Nintendo said in January it aimed to sell 31.5 million units of the DS and 26.5 million units of the Wii in the year that ended in March. (Editing by Hugh Lawson and Anshuman Daga)

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