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Kathleen Byrnes and Justin Choi, a married couple attending medical school at Tulane University, say $40 is just too much to fork over for a Nintendo Wii game they might not enjoy. They haven’t bought one since last fall, when they picked up “Star Wars: The Force Unleashed.”
Since then? “Nothing really interesting came out,” said Byrnes, 23.
Their reluctance helps explain why this is a rough summer for the video game business. More people than ever are playing the games, but it’s been a while since a blockbuster title arrived. Consumers are watching their money more closely in the recession and managing to resist games that can cost as much as $60.
The trends came into focus Thursday as Sony Corp. and Nintendo Co. each reported console sales are dropping. Sony posted a loss for the April-June quarter, while Nintendo Co. revealed a large drop in its profit.
The Microsoft Corp. division that makes the Xbox 360 said last week it lost money in the last quarter too.
“The health of the industry is terrible,” said Wedbush Morgan analyst Michael Pachter.
For gamers, at least, there’s some good news: Console prices will probably come down.
Sony’s PlayStation 3, the costliest of the bunch, still sells for $400. Nintendo hasn’t lowered the $250 tag on the Wii since its 2006 launch — an extreme rarity for an industry that relies on regular price cuts to broaden its audience.
Despite the bad earnings results Thursday, Sony and Nintendo both reaffirmed their forecasts for the year. And Pachter thinks each company “has no prayer” of meeting the target without cutting prices to lure buyers. In Nintendo’s case, that might mean keeping the Wii at $250 but throwing in more free games.