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Wii…. Let’s Go For A Spin

by User Not Found | 1月 31, 2007

Nintendo helped create the modern videogames industry, and the company remains a leading force and is financially successful. In spite of this, Strategy Analytics’ games reports over the years (in which I have been the principal contributor) have cast doubt on the company’s fixed console strategy, and we were proved largely right with the GameCube, which was a major disappointment and drastically missed all Nintendo’s own projections.

I try not to let my personal preferences influence my professional analysis: I admire the passion displayed by the dedicated followers of the various systems, as indicated by the copious flames that fill my inbox every time my name is attached to a particular pronouncement. For what it’s worth, I have only ever bought Nintendo’s consoles (fixed or portable), for myself or my children. But this has not stopped me taking the view that in the fixed market, Nintendo stands little chance of market leadership in the battle against Sony and Microsoft.

Latest reports of Nintendo’s recent results in the specialist and business media have an unswervingly positive slant. Financially, the company continues to be extremely strong, and this is supported principally by the company’s domination in handheld gaming (where Sony’s PSP is rapidly losing ground). But surely even Nintendo cannot pretend that its Wii console is meeting expectations. It sold 3.2 million in the first quarter, 20% below its target. But from all the press reports you would think the Wii was already market leader and set to sweep the world.

Take this from Business Week: “Nintendo's Wii console has blown away Sony's PlayStation 3 in the early stages of the hotly contested battle for next-gen gaming consoles.” Putting journalistic hyperbole aside, the facts are that Nintendo missed its target for global Wii sales by 20% while Sony was within 10% of meeting its own (admittedly reduced) target. And while consumers spent $800m on Wii consoles, they spent $900m on PS3s. Blown away, indeed?

I have mentioned before that Sony’s games PR is dire. Whatever Nintendo’s PR people are doing, Sony should learn from it, and fast. The PS3 certainly has major challenges ahead, but it’s nowhere near the disaster the press and some financial analysts are painting it. And the world’s leading console platform is still, wait for it, the PS2. By contrast, Nintendo still has a lot to prove if the Wii is really going to revive the company’s fortunes. If its commercial performance is a good as the PR spin, it has every chance of success. The bottom line is, this is a battle that will be fought over years, not in a few weeks before Christmas.
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