Why Nintendo Had to Slash the Price of the Wii

It's time for Nintendo to resort to its classic rainbow strategy to sell more Wiis: Its net profit for the past six months fell by 50 percent, almost perfectly matching a near 50 percent drop in Wii sales.

Nintendo sold 5.75 million Wiis over the past six months, versus 10.1 million a year ago. Which is why Nintendo finally got around to cutting the price of the Wii—to move more units, even though that sliced into profits. (Interestingly, it shows Wii sales finally dipped below a million a month, if barely, and just how insanely profitable the Wii is for Nintendo.) If it makes Nintendo feel any better, the Xbox 360 is the only console that's actually seen growth this year, in the US, anyway, thanks to its own price cut.

So, um, next stop: Wiis in multiple colors. Hey, it's worked for Nintendo like a million times before. That, or you know, that Wii HD people are so fond of talking about. [WSJ