Nintendo late on Thursday said that it would reduce pricing of its latest 3DS game console by 40% in August. Sales of the 3DS have been lower than the company expected originally following its launch in February and the firm clearly needs to sell as many devices as possible before Sony Computer Entertainment launches its PlayStation Vita portable system in late 2011.

Starting from August 11, 2011, Nintendo will reduce the official recommended price of 3DS portable video game system for Japan from ¥25 000 to ¥15 000 ($321 to $192, €225 to €135). On August 12, suggested retail price of Nintendo's portable 3DS system in the U.S. will be $169.99, down 32% from the current price. The company will perform similar reductions in other regions, such as the European Union, Southeast Asia, by the end of September, but the actual ranges of reductions will be "different from Japan".

Since Nintendo 3DS launched in the United States on March 27, more than 830 thousand of units were purchased in the U.S. To reward its most loyal customers, who bought the systems at $249 price-point, Nintendo will provide them 20 free downloadable games from the Nintendo eShop.

Nintendo lowers the price of the 3DS portable video-game system across the world because sales of the product were much lower than the firm expected originally. For the quarter ended June 30, 2011, the firm posted ¥93.928 billion ($1.2 billion) revenue, down 50.2% from the same period last year as well as reported operating losses of ¥37.712 billion ($485.27 million) compared to ¥23.342 billion ($300 million) operating profit during the same quarter a year ago.

"Nintendo 3DS has not been selling as expected since the second week [of availability], and this is not just in the Japanese market but also in the United States and Europe, where no direct impact from the great earthquake has occurred. Therefore, we recognize that we are in a situation where we need to step up our efforts to further promote the spread of Nintendo 3DS," said Satoru Iwata, the president of Nintendo, in late April.

The reasons for low popularity of Nintendo 3DS are not completely clear: this is the first portable game console with the auto-stereoscopic 3D screen which can play games for DS-series consoles. On the other hand, the system is not truly affordable, it competes against a number of rivals (DSi, PSP, smartphones), its launch lineup is not that strong. In general, Nintendo will need to popularize the 3DS among consumers as well as among third-party game designers in order to let the console truly take off. One of the ways of such popularization is a significant price cut.

Tags: Nintendo, 3DS, Business