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With the release of Microsoft Kinect and Sony Move motion-sensing technologies for Xbox 360 and PlayStation 3 the stir towards Nintendo Wii game console by casual gamers started to decline. Technologies by Microsoft and Sony are not worse than Nintendo's, but X360 and PS3 have better graphics and a number of other capabilities. An analyst believes that sales of Wii will quickly drop and the company will not be able to recover easily.

Nintendo has been long rumoured to release a successor for Wii game console with high-definition graphics support as well as better quality of content overall. However, Nintendo relied on its Wii - which had exclusive motion-sensing game controller, but had outdated graphics core and underperforming microprocessor - and did not release anything new to offer quality of experience similar to PS3 or Xbox 360. Now that the motion-sensing controllers are available for all three current-generation systems, Nintendo has lost its only trump and naturally sales of its Wii started to decline gradually. Since Kinect and Move were announced over a year ahead of release, Nintendo had a lot of time to finalize a successor for Wii (at the end, it had enough time to develop a decent console) and release it in 2010. But the company failed to do so.

"I think Nintendo has completely blown it with their second generation Wii strategy. I think they have the mentality that to launch a new [console] they have to retire the old, and I think that is wrong. I think the right strategy would have been to get a second generation Wii out and keep the old Wii at the same time, and have the second generation be the natural progression upgrade model. [...] With Kinect and Move, it is a lot easier for people to make X360 or PS3 their starter console," said Michael Pachter, an analyst with Wedbush Securities, in an interview with IndustryGamers.

There are not a lot of options for Nintendo now: stand still, watch sales of Wii declining, enjoy the growth of 3DS market share and prepare a true next-generation game console for 2012 - 2014 launch; release a no-matter-what successor for Wii as soon as possible and make its best to convince game developers to create games for it; release a high-profile successor for Wii with a clear game development strategy for third parties; drop the price of Wii considerably so to sell more units in developing markets.

"I think by the time they launch [their next console] if it is Christmas 2011, it is two years too late, and for sure one year too late. So it is over – I do not think they can ever recover. Wii sales will continue to decline and I think Wii 2 will not sell well. Third parties are not going to support it unless it is really similar to the X360 [...] so that it is easy for them to port games from X360 to Wii 2. If Nintendo advances the technology, and it is more powerful than a PS3, then no one is going to support it. If they were going to 'emulate' the 360, which is what I thought they would do, they should have done that in 2009. If they are going to advance the tech, then 2011 is really not the right year," said Mr. Pachter.

Nintendo itself claims that just adding high-definition graphics to Wii is not an option and that the next-gen console should have something else.

“The fundamental issue in the logic flow is that […] ‘gosh it is such an opportunity to take HD capability and link it with the Wii’. […] That is not the way we at Nintendo do things. The way we at Nintendo do things is, you know, when we will move to a new generation, it is because there are some fundamental things the [current] console cannot do. What that says is that simply the addition of HD capability will not be the next step for us. There will be more to it. There will be additional capability. There will be additional elements, and, given that, it is far into the future,” said Reggie Fils-Aime in an interview.

Tags: Nintendo, Wii, Playstation, Xbox

Discussion

Comments currently: 16
Discussion started: 01/26/11 12:51:25 AM
Latest comment: 01/28/11 01:30:02 AM

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1. 
Wedbush Securities..who?

Nintendo have blown it ...eh!

Yeah, Nintendo have `blown away` the sales of all other consoles with the WII for years and now the old tech is showing it`s age and the sales are declining .... to where the sales of the high tech consoles are....yeah, does that sound like they `blown it`

And why should nintendo compete with what they would class as old tech now, as in the motion sensor...how long did it take the other consoles to copy and figure out.

As Nintendo said they are moving on not standing still
(...The way we at Nintendo do things is, you know, when we will move to a new generation, it is because there are some fundamental things the [current] console cannot do.)

analyst`s ...what they have to do to get a headline...shheess...



0 0 [Posted by: efex  | Date: 01/26/11 12:51:25 AM]
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2. 
I agree with efex there. We all know tech producs have a very distinctive curve of sales (if you don't, then you fail hard) and Nintendo knew before you and me when to start on then next gen Console from them.

Besides, blown it? Because what Sony and MS had to mimic to be on par with an UNDERPOWERED device in sales? Dude, you got it wrong, awfully wrong. Sony and MS should be thankful of Nintendo for telling them how to sell more units before they have to release a new one.

Cheers!
0 0 [Posted by: YukaKun  | Date: 01/26/11 06:01:41 AM]
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3. 
I agree very much with the analyst. I had both consoles. I bought the Wii first, but ever since I bought my Xbox, I probably touch my Wii twice a year for the past two years. I finally sold my Wii and all the games on CraigsList last November. That means I bought absolutely zero Wii games in the last two years. Why would I? If the game is available on both console, I just pay $10 more and enjoy it in full HD as opposed to 480. (BTW, I had to spend $30 then to upgrade the Wii output from 480i to 480P). It's very simple - if you have an LCD (most families do nowadays), why not enjoy HD gaming?

So, no game sales translates to no new games developed. I sold my Wii because (1) it was visually inferior to my Xbox, and (2) it is not powerful enough to run many games.

And one year is an eternity. Xbox was launch one year ahead of PS3, and that is how Microsoft got ahead of the almighty Sony Playstation -- an unthinkable feat that no one saw coming.

The bottomline is, the Wii had a very successful run - no one denies that, but they will likely miss the boat.
0 0 [Posted by: gamoniac  | Date: 01/26/11 06:45:04 AM]
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4. 
The real reason why Nintendo might have "blown it" isn't because there isn't a "next-gen" Wii. It's the fact that Nintendo focuses too much on casual gamers and really failed to maintain their core gamer market. Sure, you get Super Smash Bros., Donkey Kong and Super Mario ... but how about third-party releases? There seems to be less and less quality A games for the Wii compared to the XBOX 360 and PS3.

Until that is corrected, Nintendo will lose sales. It's not the hardware, it's the lack of software for the hardcore gamer that's plaguing Nintendo.

I haven't really touched my Nintendo Wii in a while, most of my console gaming is done on my XBOX 360 because there's strong third-party software aimed that hardcore gamers than there is on Nintendo's platform.
0 0 [Posted by: deltatux  | Date: 01/26/11 08:06:10 AM]
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5. 
Nintendo is the ONLY CONSOLE MANUFACTURER that actually makes a profit from selling the device. Microsoft and SONY are loosing money on every device they sell and they've lost money on R & D. Nintendo has always made a profit. Their high sales were due to real novelty and that is proven by the fact that BOTH SONY & Microsoft have copied their idea. Who knows what the new console will bring to the market but rest assured that it will sell good and if you've bought the WII you probably won't resist the temptation to buy WII 2, Nintento will make sure of that.
0 0 [Posted by: East17  | Date: 01/26/11 08:55:51 AM]
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6. 
Not doing incremental upgrades to Wii is just one move that can succeed or not succeed. It really depends on how Nintendo makes Wii 2. Is like a chess move, it depends on your other actions. This analyst thinks he knows better than Nintendo.
0 0 [Posted by: m3kw  | Date: 01/26/11 09:10:55 AM]
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7. 
Interesting, how the same people that said Nintendo would die when the first PSP and XBoxes came out... A chirping the same song now.

Microsoft and Sony are selling to a limited base of game players. This same base has 'game systems' at home that Sandia Labs would love to get their hands on. These sytems back end the consoles and the people play as if they were in a time warp. That base is not small, and doesn't mind getting ripped for overpriced stuff.

Then there is a different market... Called everyone else. (Most of the real world to you). They want to play games that are fun... don't have 3 hours of useless video for every 5 minutes of play (THE reason I quit Final Fantasy... it was better on the old hand helds where it WAS a game instead of endless previews at the drive-in.)

They would like a system not fighting against anything you might do (Sony) or one that neither blue screens and dies or red light and dies (or both). I notice the counts for the last few years... Sure looks like Nitendo is going bankrupt, doesn't it??

If you were reading this on a FinalFantasy system, watch the slo-mo parade, the slo-mo what ever beast and slo-mo cutbacks for the next two hours and see the I only say...

Cold day in hell
0 0 [Posted by: the old rang  | Date: 01/26/11 06:36:49 PM]
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8. 
One PS...

Besides... All the harping on the WII and nothing one the DS...

The total numbers say your two bubbas still have lots of catching up to do, in units, and even more in game sales...

ALL at a profit... Not the Gillette model
0 0 [Posted by: the old rang  | Date: 01/26/11 06:44:59 PM]
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9. 
This guy makes no sense so according to him Nintendo should just kill off its consoles and get it over with, because it's too late for them to do anything productive. First it's too late to emulate the Xbox 360 tech into the next gen Wii and if it was more powerful then the PS3 they wouldn't sell any consoles. WTH? This guy makes no sense.
0 0 [Posted by: SteelCity1981  | Date: 01/26/11 07:44:45 PM]
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10. 
there is no analysis done, nintendo did not lose anything.
it's just xbox and ps catched up.
declining sales is not a bad sign, as though, declining iPod sales of today shows something bad.

0 0 [Posted by: zodiacfml  | Date: 01/26/11 08:49:12 PM]
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11. 
Nintendo did not lose anything, even if it didn't quite care about its core gamers.

What i mean is, while Nintendo might have left its core gamer basis, it's got casuals instead who do not ask for too much about graphics, and mainly want fun, playable games for them that are not too hard and if possible playable with friends.
They actually achieved that, and won the war in my opinion.

The problem with Microsoft and Sony, is that they seemed to have mainly focused on high quality graphics, and on core gamers, a smaller gaming base.
What is more, it seems they're mainly focusing on big license games, which usually requires huge funds and thus, MUST be sold at milions units to make a profit out of them, while Nintendo most likely did not have to put too much money into their games and didn't quite care about big license games which weren't going to hit their target customers anyway.

Remember this, manufacturers, Nintendo's aims has always been to bring fun to people, whether they are casual or hard core gamers. And they've pretty much always succeeded in hitting both (except this time maybe, but they made up for it quite easily by increasing their market shares).

If you want evidence of this, just take a look at all the Wii shortages, how many people got in their household a Wii, and how both its competitors had to go and copy Nintendo.

It is too late, competition, Nintendo has already been here, and now they're leaving you with the crumbles, you're not going to steal the cake and Nintendo is already baking the next cake while you're still trying to steal the old one.
0 0 [Posted by: Kurata  | Date: 01/27/11 03:04:13 AM]
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12. 
The new portable Nintendo 3DS cost more than Wii, and it will be another revolutionary device. So don't worry about Nintendo, they are the only company that actually makes profit out of selling game consoles. And a big one, from what I've heard...
0 0 [Posted by: TAViX  | Date: 01/27/11 05:20:13 AM]
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13. 
I think that the Nintendo 3DS is not the revolution. In my opinion, this game will not work as well as the wii, however it seems to adress hardcore gamer rather than casual, considering you shouldn't be playing it for too long either.
But 3D does not seem to be the next step into evolution, but more like a transition period in my opinion.
It is too early to try to see whatever sales the 3DS will bring about, and in my opnion, the 3DS will NOT be the next greatest hit.
0 0 [Posted by: Kurata  | Date: 01/27/11 07:51:42 AM]
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14. 
It's the games that sell the Wii. Unless you like first person shooters or sports games there is little reason to buy a PS3 or XBox 360. The Wii targets an entirely different audience. It's like saying the minivan market will dry up because the new Ferrari is out.
0 2 [Posted by: user99  | Date: 01/27/11 10:58:05 AM]
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15. 

Also it doesn`t matter if you brought the WII and then you brought ...another console and now don`t use the WII because it doesn`t matter.

You brought a WII job done to Nintendo.

It`s like a Amiga 1200 sales bouncing up and down on PC sales
and sony and Microsoft should give Nintendo a clap for being much smarter than both of them in their console approach.

At an angle this analyst is very short sighted.
0 0 [Posted by: efex  | Date: 01/28/11 12:16:53 AM]
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16. 
Of course it does matter. If you bought a WII and is using it, you will eventually be led to buy more games as you're interested in this system and might want to find interesting games to play with friends or alone, thus letting Nintendo make a bit more money instaed of just settling with a single console sale.
0 0 [Posted by: Kurata  | Date: 01/28/11 01:30:02 AM]
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