Sep 4

Written by: admin
9/4/2007 1:56 PM

  Nintendo's stock has been climbing for the past year, while Microsoft and Sony's stock remains flat.  Nintendo have two of the most popular electronic devices of all time.  The Nintendo DS portable game system, and the Nintendo Wii home video game console.  Due to fantastic worldwide sales of both systems, and even better game sales, the company has posted a profit of 1.5 billion for the last quarter.  A spectacular gain, and the promise of further gains in future quarterly reports.

  Many publications are now broadcasting the merits of Nintendo's corporate strategy.  Handing Nintendo the award for best business strategy, by releasing lower powered systems with popular titles, Nintendo has found the proper balance of cost/sales that every video game company always searches for.  The press is ready to hand Nintendo the trophy for winner of the next generation contest, but in reality, it's far from over.

  What many of the press publications fail to do is analyze the the entire market.  They concentrate on the young Xbox 360, and even younger PS3 market in comparison to Nintendo Wii sales.  They look at the overall financial gains Nintendo is reporting, and determine that Nintendo is doing everything right, and Sony and Microsoft are doing it all wrong.  Here they are mistaken.

  The idea that the cost of the Xbox 360 and the PS3 is too high is not lost on console buyers.  Microsoft has only moved 11 million 360's since it's launch almost two years ago, and Sony is doing far worse, both missing key benchmarks.  It would seem that Microsoft and Sony are beating each other to death, and Nintendo is riding high on the low budget market.

  One of the things the press is missing from all the sales data is the impressive sales numbers of the PlayStation 2 game system.  A system that already has an installed base of some 120 million worldwide continues to sell phenomenally well, with a compliment of excellent titles that outclass and outsell games on all three next generation game systems combined.  God of War 2 being the most recent and successful offering that showed the PS2 still has a lot of life, and a serious market behind it.

  The Wii system has been selling around 250,000 units per month, primarily due to Nintendo's inability to ramp up production to meet demand, but it looks as though that demand is starting to wane.  Nintendo's fatal pattern of releasing games too slowly for their game systems is once again having a negative impact on Wii owners.  The game sales charts are almost completely dominated by DS and Xbox 360 sales, with a few scattered PS2 titles as they are released.  Why no Wii titles?  Because there aren't any, and hardly any on the immediate radar.

  While it is true that Nintendo mentioned some 75 titles in development, the release list is spread out over a three year period, and many of those titles will be localized and released in their home country of Japan before going state-side.  (Or to Europe)  And many titles may just be lemons, leaving a typical handful of games that are decent enough to pick-up and play.

  Wii owners are getting impatient.  The promise of the new Wii controller was to make gaming more involving and dynamic.  But so far it has been very limited in it's ability to anything near what was hoped.  The most fun people are having is viewing the Internet Channel and Weather Channel on their TV's, and maybe going back and playing some ancient titles they never got to when they were first out.  While that may interest folks for awhile, it's my guess that more and more Wii owners are finding themselves hardly ever turning the thing on, and just sort of waiting for the next thing to come from Nintendo to make them want to play.

  Nintendo has relaxed in a strategy they think is safe, because the Wii is much lower in total cost to own than the 360 and the PS3.  Unfortuantely, what Nintendo may be missing, is that it's still too expensive for casual game players to pick up at the store.  A family of 4 will spend a small fortune buying a Wii, some games, controllers, and chargers.  Even the standard system plus one new game is around $330 with tax.  For that much money, the games had better be worth it, and so far, they haven't been.

  Now with the summer months upon us, people will be outside, and the world of video gaming will take a back seat until the fall, when big things are expected to happen with the 360 and the PS3.  Major title releases on both consoles will attract larger audiences and huge gaming interest.  Will the Wii suddenly turn into last year's game system?  Or will Nintendo have an ace up their sleeve to take on the likes of Halo 3, Metal Gear Sold, and Grand Theft Auto IV?  Will gamers even care about the Wii at that point, or will they be trying to sell their system on Ebay to grab themself a Sony or Microsoft game console instead?

  The bottom line here, is that Nintendo has a long way to go before we all start handing them congratulations trophies.  The Wii has to be proven to not just be a cheap console, or an innovative console, but a console that has great games on it.  Because nobody remembers the game systems that were innovative and cheap, they only remember the ones with the best games.  Hopefully Nintendo learned that lesson with the GameCube, and won't fail to show something off this Christmas that makes people buy the Wii for the right reasons, and not just because it MIGHT be something someday.

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