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HIVE EXCLUSIVE: Nintendo Looks to Rental to Boost GameCube

10 Aug, 2001 By: David Ward

Looking once again at the rental channel to drive early awareness for a new game system, Nintendo says it held “very productive” talks with Blockbuster and other chains to line up support for the Nov. 5 launch ofits new GameCube system.

“We hope to have a deal in the next 30 days or so,” says Nintendo of America (NOA) senior marketing v.p. George Harrison. “We just recentlyhave been able to get an idea of how much product we’re going to have, so that will affect [Blockbuster’s] decisionmaking in terms of howaggressive they can be.”

NOA also confirmed it would receive 1.1 million GameCube hardware units for North America between Nov. 5 and the end of the calendar year, with Japan getting 1.4 million units. Harrison said GameCube softwaremanufacturing will be done here in the United States, ending the frustration many publishers had with the six- to eight-week softwarereordering process of Nintendo’s older cartridge-based systems. Harrisonsaid first party games will carry a $49 retail price, competitive with Sony PlayStation 2 pricing.

With a huge “try-before-you-buy” audience out there and Microsoft’s Xbox set to join the GameCube on shelves in November, video rental storesshould be able to lure game customers in droves this holiday.

Linda Sanderson, purchasing v.p. for the Canadian-based Rogers Video chain, said she’s already been in touch with both Nintendo and Microsoft. But this time around Rogers will forego making hardware available forrent and will concentrate only on renting games for the two new systems, Sanderson said.

“We learned our lesson with PlayStation 2, so we’re just going to do software,” she said. “[PlayStation 2] was a nightmare, especially whenthey were in short supply,” she added, explaining that the chain had a hard time getting the systems back from renters.

The game rental market is running a bit sluggish this summer, Sanderson said. While PlayStation 2 is picking up steam, it has not made up forlack of new Nintendo 64 (N64) games on shelves. Because the N64 is cartridge-based, the games have always been higher priced, leading manyconsumers to rent the Nintendo system’s games before pulling the triggeron a purchase.

Much like the sellthrough market, the video game rental channel is dependent on the installed base of various hardware systems. That meansthat while they will be supporting Xbox and GameCube titles, Sanderson said, “We’re really looking for a big push in the fourth quarter from PlayStation 2.”

In other game news, Harrison said the Game Boy Advance portable system continues to do well. “We’re living with less than two weeks’ supply at retail, which means that some stores have spotty out-of-stocks and we expect it to continue into the fall,” he said. “So it’s been very encouraging.”

Software sales are running 1:1 with hardware sales, leading Nintendo to concludesome gamers were taking advantage of the Game Boy Advance’s backwardcompatibility to stock up on older (and cheaper) Game Boy Color games.

The recently released Pokemon Crystal for Game Boy Color sold 50,000 on its first day, Harrison said.

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