The US-based Circuit City Group is offering Nintendo Co's Game Boy Advance handheld game player at an 11 percent discount as it phases out sales of household appliances to focus on products such as video games and music.
Circuit City said it's offering the device for advance order on its Web site for US$89.99, compared to the suggested retail price of US$99.95. The game system, expected to go on sale in most stores on June 13, is the successor to Nintendo's Game Boy, which has sold more than 100 million units worldwide.
Circuit City, the second-largest US electronics chain, wants to boost sales of games, music and computer software as it remodels stores and discontinues sales of household appliances such as washers and dryers. With the Game Boy Advance discount, the company is sacrificing revenue to attract new customers, an analyst said.
"This is a way to get people in the store and let them know Circuit City is a player in the games area," said Peter Benedict, an analyst with CIBC World Markets, who rates the shares "hold." Video-game retailers earn most of their profit from software sales, not sales of the devices, he said. The wholesale price Nintendo charges retailers for Game Boy Advance is US$88 per unit, said James Lin, an analyst with Jefferies & Co.
Lin said Circuit City is the only retailer he knows of that is selling the device at a discount.
In seeking to boost games sales, Circuit City is challenging rival Best Buy Co, whose results in recent quarters have outpaced Circuit City's, Benedict said. Best Buy is the largest US electronics chain.
"We make efforts to be very competitive in our pricing," said Jim Babb, a Circuit City spokesman. "We're increasing our presence in gaming. It's an area where there's going to be a lot of growth and excitement." Retailers have taken more than 200,000 deposits for Game Boy Advance, Nintendo officials have said. The company expects to deliver 500,000 units to merchants next week.
"Retailers are free to sell it at any price they want," said Beth Llewelyn, a spokeswoman for Nintendo at its US headquarters in Redmond, Washington.
Circuit City, based in Richmond, Virginia, has 595 superstores and 32 mall-based stores.
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