GameCube sales have been flagging

The console is being offered for �99 instead of �129, with a free game thrown in, at Dixons, Currys and PC World stores as from this week.

Sales of the GameCube have been flagging in the UK, with High Street retailer considering dropping the console altogether.

Dixons is one of the UK's biggest sellers of consoles and a decision not to continue to stock the GameCube would be a blow to Nintendo.

Low sales

The GameCube is battling with Microsoft's Xbox, which retails for �159, for second place in the hotly contested console market.

The current Nintendo GameCube price promotions are retailer initiatives Nintendo statement

Sony's PlayStation 2, which retails for �169, is the undisputed leader, with about 50 million sold worldwide.

By contrast, Nintendo said it sold a total of 1.5 million consoles in Europe since launch in May 2002.

The GameCube sold poorly over the crucial Christmas market and have remained low, partly due to the lack of new games.

Sales have picked up in the last week, thanks to the release in the UK of the eagerly anticipated Resident Evil Zero.

More key games are coming over the next few weeks and these could help boost demand.

The drop in price of the console by Dixons should help, especially since it is also cutting the cost of GameCube games.

'Retailer initiative'

There has been speculation that retailer may be trying to clear old stock before dropping the console.

New releases like Metroid Prime could help sales

A Dixons spokesman said the outcome of the promotion would help determine whether it would continue selling the GameCube in the future.

"We think this should stimulate interest in the GameCube," said Hamish Thompson.

"With three game consoles competing, all sold well in the beginning, but recently sales have favoured the other two formats."

Nintendo has refused to be drawn over the prospects for its console.

"Nintendo is continuing to actively trade with Dixons," it said in a statement.

"Nintendo GameCube is currently available in 4,500 stockists across the UK including Comet, HMV, Toys R Us, Game, Virgin Megastore, Argos and Woolworths.

"The current Nintendo GameCube price promotions are retailer initiatives," it said.

The loss of a place on the High Street would be a blow for the Japanese games giant.

The UK makes up the third largest video games market worldwide and Nintendo can ill afford to lose a retail outlet such as Dixons.