Wedbush Morgan Securities analyst Michael Pachter believes Nintendo will cut the price of the Wii later this year in order to hit its shipment targets.

“Wii supply has finally exceeded demand, so we expect hardware sales to show year-over-year decreases for the first half of 2009,” he said in a research note. “In order to hit its full-year Wii shipment forecast, we expect Nintendo to cut the price of the Wii before [the] holiday, likely to $199.99.”

US Wii sales have just topped 20 million units, according to the platform holder, while worldwide sales have surpassed 50 million.

Last month the company said it expects to sell a further 26 million Wii systems during the current fiscal year ending March 31, 2010.

Noting that a price cut is not an “almighty weapon,” Nintendo president Satoru Iwata said recently that the company plans to address a slowdown of Wii sales by introducing strong new software rather than reducing the cost of its hardware.

Pachter also reiterated his belief that Sony will cut the PS3’s price in the second half of the year, and noted that Microsoft could react, possibly with a cut of its own.

“In the second half of the year, we expect Sony to cut price for the PS3, and if the cut is deep enough, we expect Microsoft to respond (either with bundles or with a price cut of its own, even as Microsoft just introduced a Xbox 360 Elite bundle with free games Halo 3 and Fable II).”