Attention Wal-Mart shoppers: The next-generation video game shopping season will soon kick into high gear and Wal-Mart is readying itself for the holidays as Microsoft, Nintendo and Sony go head-to-head this fourth quarter.

With much fanfare shoppers will have a choice between the Microsoft Xbox 360, Nintendo Wii or the Sony PS3 this quarter. Wal-Mart has already begun preparing store locations for new video game console stock. Select locations have even seen a complete redesign and wider floor space to play future demo units. With anticipated high demand and frenzy, shoppers will choose which next-gen console or handheld they'll take to the checkout counter. Wal-Mart's slogan promises "Always Low Prices", while the big three video game makers are promising competitive prices among each other as the gaming public is well aware. The question is what consumers choose, what will sell, and what will remain in stock at Wal-Mart stores?

Gamasutra brought questions to Steve Perry of Wal-Mart Stores Inc. Perry is a busy video game buyer for the Bentonville, Arkansas retail giant, traveling to suppliers around the globe looking at new games and accessories. Our interview covered everything from the future of PSP UMD movies, in-store Wii demo units to the Xbox 360/Wal-Mart appearance on the NBC network reality show "The Apprentice".

With the interview taking place shortly after the end of the 2006 Tokyo Game Show, the important and obvious questions came first: We were interested to know what Wal-Mart thought of the PS3 price drop in Japan and if SCEA would follow suit with an accompanying North American price match?

Gamasutra: Ken Kutaragi recently announced that the price of the 20GB PS3 would be cut 20% for Japanese consumers only. No other territory would see a PS3 price cut for the console launch. Has Wal-Mart received any kind of indication from SCEA of a North American price drop for the PS3 at launch?

Steve Perry

Steve Perry: No, haven't heard a thing.

GS: With regards to Sony and the PS3 price drop in Japan, does Wal-Mart have any influence on obtaining universal price-drops for its customers that reflect ones in other international markets?

SP: That's a good question, it typically is up to them (Sony), and to be honest we have not had that conversation with them. We'd certainly like to see parity on pricing, but we have not had that conversation with them yet.

GS: Have Nintendo and Sony given you any dates on when they'll be able to supply customer demo displays for their respective Wii and PS3 consoles to Wal-Mart stores?

SP: They have not. I know they're working on that.

GS: Do you have any timeframe of when you'll be able to announce the availability of demo units in store?

SP: I would say definitely by the fall of this year we will have demo units in stores so customers can experience what the systems are all about.

GS: In-store demo units for both the Nintendo Wii and PS3?

SP: I think it depends on how difficult the allocations are. We will have information out on the stores and certainly interactive entertainment so that customers can experience what the new systems are. We're still working with both suppliers (Nintendo and Sony) on that end; it's a big challenge.

GS: Can you give an overview as to what have been the most successful video game products this past summer at Wal-Mart?

SP: Sure, we've been really successful with Madden, that's been really good. NCAA has been great. Guitar Hero's been on fire. The new DS Lite, the colors came out a few weeks ago, those have done really well. Then you've got Xbox 360 and PS2, we're still extremely strong with those, certainly with 360 and PS2.

GS: The Hollywood Reporter reported in an article that Wal-Mart was considering dropping the UMD movie format from its stores. I did not find any UMD's in my local Wal-Mart. Is it safe to say that Wal-Mart has discontinued carrying UMD movies?

SP: We haven't made any decisions on the UMD format. We build our assortments based on what we call "Store of the Community", but it's basically we try to build our assortments based on what the relevance and the movement are in regards to the local community. We look at demographics and history on different items to determine what's relevant, get a lot of feedback from the local people out on the market, whether or not its something that particular market is looking for. Typically a lot of it's based on history, we try a lot of things, and we try to see what sticks.

If you've seen a decrease in that availability it's probably due to the relevance or the "Store of the Community" program we use based on the demand in that particular store.

GS: Having enough shelf-space will be key this fourth quarter with the PS3, Wii and Xbox 360 going head-to-head competing for holiday sales. How is Wal-Mart preparing for this challenge?

SP: We've expanded our space in a number of our stores to accommodate the new systems, making sure our assortments reflect the new programs and new systems that will be coming into place, so that we are able to have a nice presentation but more importantly be relevant to what the customer is looking for.

GS: Sony is stating that 400,000 PS3 units will be ready for launch while Nintendo is stating that 1,000,000 Wii units will be available. Wal-Mart is well known for its distribution flow, are there any special preparations that Wal-Mart is making this holiday season to keep the PS3, Wii, and Xbox 360 in-stock?

SP: Well, we'll make that decision based on how the flow is, and how the in-stock position is in the store. If we need to expedite product we will certainly do that. The most important thing is that we try to keep as many stores in-stock as we can.

It will be challenging, we sell a number of systems, it's kind of hard to predict what the customers are looking for, and we try to keep it in stock. We do expect a demand for PS3 to exceed what they (Sony) will be able to supply. We certainly expect that to happen.

GS: Have you found that customers are taking advantage of taking demo disks, using the DS download stations, and downloading Xbox 360 demos from Wal-Mart? Has this been in-demand?

SP: It absolutely has, the response has been phenomenal, and we're pleased with how responsive the customers have been to these features.

GS: Has Wal-Mart considered carrying more exclusive game demos for other consoles and handhelds in the future?

SP: I think we're going to certainly wait to see what the demand is for that and work with the suppliers as they come up with ideas. The DS download station was an idea that came up while we were working with Nintendo. We said 'Hey, let's test this thing out and see how it does.' We tested it in a few stores and it was exceptional so we've quickly moved to roll it out. We'll always work towards different ways to reach our customers and make the offering intriguing to them and entice them to shop at Wal-Mart.