Penny-pinchers can rejoice. Nintendo (OTC BB: NTDOY.PK) has announced that its next-generation Nintendo Wii gaming console will be priced at less than $250 when it's released just weeks before this year's holiday shopping season.
This news comes after Microsoft (NASDAQ:MSFT) rolled out its Xbox 360 last year at $299 and $399 price points last November. Earlier this month, Sony (NYSE:SNE) revealed that it will price its PlayStation 3 system at $499 for a basic model and $599 for a spruced-up version, so Wii will undercut that price, too.
Wii -- pronounced "we," as in "Wii couldn't think of a better name" -- has little choice but to be priced aggressively. The PS3 is being pitched as a high-end home-theater appliance thanks to its Blu-ray DVD functionality. Nintendo, once the undisputed video game champion, is now third domestically behind Microsoft and the market-leading Sony.
Nintendo's strength remains in its handheld gaming systems. That's comforting. If Wii and its revolutionary motion-sensing controllers are a flop, Nintendo can back out of the console hardware market and excel in software and portable gaming devices. That may have been an iffy move for companies like 3DO, Atari (NASDAQ:ATAR), and Sega, but one would have to think that the Zelda and Super Mario games would be huge sellers with the larger PS and Xbox audiences.
But why are we burying Nintendo? It's not dead yet in the console wars. Kids may crave a PS3, but thrifty parents may balk at the new system's outlandish price, and that will give Nintendo an advantage as it heads into the holidays. It plans to ship 6 million systems worldwide between now and the end of March, though the numbers that really matter here are how many will come to the United States and how many will be delivered before the holiday shopping season ends.
Video games are fun to play, but this battle, which will play itself out over the course of the 2006 holidays, will be fun to watch, too.
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Longtime Fool contributor Rick Munarriz is a fan of all three consoles, but he hasn't even begun to inquire about preorder policies for the two new systems. He does not own shares in any of the companies mentioned in this story. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
