http://money.cnn.com/2005/11/10/commentary/game_over/column_gaming/

Nintendo hints at coming price war
Revolution may lowball competitors to help attract consumer eyes.
November 10, 2005: 1:10 PM EST
Game Over is a weekly column by Chris Morris

The Nintendo Revolution controller will be vastly different than the
Xbox 360 or PS3's.

NEW YORK (CNN/Money) - While the Xbox 360 is going to be dominating
the media spotlight for the next few weeks (and possibly months),
senior officials at Nintendo are quietly planting the seeds of
Revolution.

Nintendo's next generation video game machine won't be out until 2006,
but Reggie Fils-Aime, executive vice president of sales and marketing
for Nintendo of America hinted this week the company might have a
surprise up its sleeve.

Microsoft's Xbox 360 has adopted a two-tier price strategy ($299 for a
bare bones version and $399 for a souped-up machine). Sony, meanwhile,
has shouted from the rooftops the PS3 would be a pricey piece of
equipment. Nintendo, though, seems ready to lowball its competitors on
the retail front.

"Value has been a key card for us this generation and we'll continue to
play it," Fils-Aime told me. "Do I expect us to be at a lower price
point than our competition? Yes I do. Have we determined a price yet?
No we haven't."

Nintendo employed this strategy at the beginning of this round of the
console wars in 2001. While Sony and Microsoft released their video
game machines at $299, the GameCube initially sold for $100 lower.
Ultimately, the move didn't work as well as hoped. The GameCube is
third in hardware sales, behind PlayStation 2 and Xbox, a position
typically blamed on a weaker portfolio of third-party games and
(initially, at least) the machine's boxy design, which even senior
officials acknowledge looks childlike.

"I think there were some lessons we learned with the GameCube that we
need to apply to the Revolution," said Fils-Aime. "First, we've got
make sure that the titles in the first six months are strong and can
drive sales. We've also got to make sure the console is attractive
visually. And we've got to deliver on the right consumer needs. With
GameCube, at the time, portability was thought to be a big factor -
that's why it has a handle. Obviously, that wasn't the case."

The Revolution (which will likely to be called something else when it
hits store shelves) is aimed at a wider audience than the GameCube or
any of Nintendo's previous systems. While it will play DVD movies (a
departure for the company), its primary focus will be games. The Xbox
360 and PlayStation 3 will focus strongly on games as well, of course,
but have their eyes on a bigger prize - digital domination of the
living room. Nintendo has said it wants, instead, to attract people who
do not consider themselves gamers.

There are still plenty of mysteries about the Revolution, of course.
And given Nintendo's proclivity for secrecy, we won't know many of
those answers until mid-next year, at least. For example, will the
Revolution ship with any of the auxiliary devices for the controller, a
motion-sensitive unit that looks like a TV remote control? (Playing
action titles, for instance, could almost demand a second device to
facilitate movement in the game.) The answer? To be determined. "A lot
of that will be driven by our first party games," said Fils-Aime.

One thing's for sure: The Revolution will not support high definition
video, a marked divergence from the path Microsoft and Sony are taking.
And it's not something the company is re-thinking, despite the fervent
hopes of some hardcore gaming fans.

Casual and non-gamers, the company feels, are less interested in flashy
graphics than enjoyable games. And the large files that go hand in hand
with high definition video result in "almost interminably long" load
times for games, said Fils-Aime, something that would also be
detrimental to a mainstream audience.

"What we'll offer in terms of gameplay and approachability will more
than make up for the lack of HD," he said.

As for existing products, don't be surprised if more facelifts are on
the way for existing products. Nintendo unveiled a streamlined Game Boy
Advance earlier this year (much along the lines of Apple's iPod Nano),
dubbed the Game Boy Micro.

The logical choice for the next facelift would be the Nintendo DS. Last
year's hottest holiday gift has seen its popularity grow as Nintendo
and third party publishers have put out increasingly appealing
software, but the device itself is fairly ugly by gaming standards.

Fils-Aime hinted a revamped DS is in the works: "As soon as [the DS]
was launched, we started looking at ways to tweak it visually."

One final note for holiday 2005 shoppers: While Nintendo seems set to
be a price spoiler next year, don't look for the GameCube, Game Boy
Advance or Nintendo DS to get any cheaper this year. There is "nothing
planned right now" in terms of price cuts, according to Fils-Aime.