The sluggish sales of Nintendo's new gaming device 3DS pushed the company to make a surprising move to slash the price by $80, or more than 30 percent, possibly losing money for each sale of the device.
The Nintendo 3DS was launched in the U.S. on March 27 and was initially priced at $250. But beginning from August 12, the device will be sold for $170.
"For anyone who was on the fence about buying a Nintendo 3DS, this is a huge motivation to buy now," Nintendo of America President Reggie Fils-Aime said in a statement.
The Kyoto-based company merely sold 710,000 units in the three months ended June. The total number of units sold in the U.S. is 4.32 million.
Initially, the company anticipated to sell over 700,000 devices in their first week of launch.
Nintendo acknowledged that the 3DS was launched with thin lineup of game, which led to the sales struggle. However, the company is gradually improving in that regard with games like Brain Age and Nintendogs.
The increasing competition in the industry by Apple's iPhone, iPadand Android devices are also making life more difficult for Nintendo since these devices offer a large number of games for merely a few dollars or even for free.
Still, the video game company reported a $327 million loss in the first fiscal quarter of 2012, which ended in June.
The loss forced Nintendo to decrease its annual profit forecast 82 percent to 20 billion yen ($257 million) for the year ending in March 2012, compared to a previous estimate of 110 billion yen. The company also cut its annual sales forecast by 18 percent to 900 billion yen.
Satoru Iwata, Nintendo's CEO, gave an apology to Nintendo users via an online post, saying lowering prices so soon after a console's launch was a painful move.
"Never in Nintendo's history have we lowered prices to such an extent, less than half a year since the product launch," Mr. Iwata said. "But we have judged that unless we move decisively now, there is a high possibility that we will not see many of our customers enjoying a Nintendo 3DS."