Nintendo Wii: Facing the Inevitable 21 comments
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For two years now analysts have been predicting the imminent demise of the Wii. They have become a bit quiet recently as it chalks up ever more amazing sales success. Yet there are a few reasons why what we are seeing now is the end of the boom.
- Any bubble bursts just as it reaches its biggest size. And the Wii is now selling in massively unsustainable numbers. It just cannot go on.
- The penetration of HDTVs has increased massively over the last two years. Thus cruelly exposing the Wii’s last generation graphics to far more people.
- The Xbox 360 is cheaper.
- The Xbox 360 is a huge amount better than the Wii. It has far more games and vastly more good games. And it has Live, by far the best online gaming portal. Gradually the public will come round to understanding these realities.
- The Wii has a very weak game library. The first party games, a few good third party games. Then lots of dross shovel ware. And game consoles are for playing games.
- Nintendo (NTDOY.PK) have now rolled out all their great and famous properties on the Wii. So they have very few places left to go for the stream of AAA titles needed to sustain a platform.
- The Wii is not making much money for many publishers so they are voting with their feet and allocating their resources to platforms that will make them money.
- Most of the Wii customer base is the very casual “toy” market. They will be very fickle as they move onto the next “must have” trend. The Wii will become tired.
- Money is getting a lot tighter as the world tips into recession. Casual frippery, like most Wii purchases, will be an early casualty.
- Most people likely to buy a Wii already have. In terms of market penetration Nintendo are now going to suffer from the law of diminishing returns.
So there we have it. Plenty of reasons why the Wii must eventually face the inevitable. And because the boom has been so massive the collapse of sales will be equally dramatic. And when will this be? Let’s put it this way, we are experiencing the last big Christmas for the Wii.
Disclosure: None
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This article has 21 comments:
So you prefer xbox360 over Wii, well thanks for that piece of information.
"Most people likely to buy a Wii already have. In terms of market penetration Nintendo are now going to suffer from the law of diminishing returns."
Well yeah... obviously that will happen in the not too distant future, but isn't that really just A FACT THAT SIMPLY STATE WHAT'S OBVIOUS... Wii is leading the sales and will do that until everyone who's interested in bowling or playing tennis in front of their television (be it HD or black and white) has bought one...
and no, average joe doesn't care about GTA 4 or Gears of War, few people honestly do, well sure, since we have this global / american perspective it's in the millions, but it's a comparatively small part. And the reason I mention this with GTA 4 and Gears is because you seem to think that it's strange that people in general haven't understood that xbox 360 has better games...
FOR WHO DOES THE 360 HAVE BETTER GAMES? Exactly, not for everyone. If you are into every kind of game... then buy both a 360 and a Wii, but few people want to spend that kind of money, but I'm just saying, you have to distinguish between the "two markets". I know it's difficult since even Nintendo seems to have a hard time doing that (Animal Crossing commercials directed towards middle age woman anyone?)
I mean, Wii sells because people who weren't interested in videogames before regard the Wii as something that stimulates them, and you mention this in your article as well, although not in a flattering way.
"Most of the Wii customer base is the very casual “toy” market. They will be very fickle as they move onto the next “must have” trend. The Wii will become tired."
The Wii will become tired... well, have you heard anything about Wii Fit? Wii Sports Resort? And do you seriously think that there wont come any big surprises come next year?
I just think it's strange that you continue to write these negative Wii articles, you previously doomed the Wii dead this summer, and now you're back with yet another insightful article on "why Wii will stop selling"... okey, well, so come summer 2009 you will be back with your next article in the subject, or maybe by that time it's called "why Wii 2 will not sell when it's release later this year".
Despite the Wii can't last forever, Nintendo have demonstrated that any prediction on such theme is usually wrong .
So seriously... kickbacks? Salary, what type or remuneration are you getting from MSFT?
morons.
Like Square-Enix announcing Dragon Quest X?
Like Sega putting out a Sonic game and House of the Dead exclusively for the Wii and publishing Wii exclusives like Madworld and The Conduit?
Like Capcom putting Monster Hunter 3 on the Wii and deciding to actually revamp the Wii Exclusive Spyborgs thanks to feedback from Wii owners?
Like Activision breaking down and releasing COD World at War and the crappy Quantum of Solace on the Wii?
Like de Blob and Deadly Creatures from THQ?
I've got all three consoles and am a shooter fan so I give the 360 alot of time when a game like Gears or Rainbow 6 vegas comes out. But let's face it, the fact that Microsoft is trying to tout it's family friendly library and trying to soften its experience with Avatars like the Miis is a sign that they're trying to catch some of what's selling on the wii.
And they'd better make the conversion complete before 2010, when Nintendo has had a 2009 and has already a couple of blockbusters awaiting '10 (No More Heroes 2, Monster Hunter 3, Dragon X). Not to mention the 2nd round Wii madness caused by the casual Wiisports resort.
Duchebag.
Notice that while the PS3 is developing to its potential, which the 360 is already topping, Nintendo is milking most of the market share. those "two big guys" are fighting for the HIGH DEFINITION / traditional segment of the market(reducing profits considerably), Nintendo is alone in the fastest/biggest growing segment of, what was the word?... "toy games". It truly is a pain to see that after all this time, you haven't realized that your train departed long time ago. Contrary to your beliefs, the video gamer of today will not sacrifice money and better graphics over fun factor, as long as graphics are decent enough. Now especially, after the 360 is cheaper, just let the clock tick and convince yourself that not even better graphics and sophistication defeats simplistic fun factor.
Now you've said lots of "funny things" but I just cant let ya go with this one: According to your logic, if everybody buys a wii is game over for nintendo because of diminishing returns!? Thats like saying that if GM sell all their cars now, theyll be in trouble cause they wont have more cars to sell. WOW, thats got to be the rule in economics that I didnt know about.
This is not about which one you like the most or what you wrote on day one. The data is out there...
You know in this console thing, this pc vs mac, hddvd vs blue ray, this office vs lotus...., first is crucial getting MARKET SHARE to at least stay afloat but aiming to become a standard/ semi standard... If you can dominate market share it only gets easier, NOT the other way around.
Remember that those who become a standard will profit enormously but usually do so by sacrificing or delaying profits (that was the plan of the 2 big guys), but look again! Nintendo is capitalizing in profits while eating most of the pie and they have a very favorable cost structure that gives in versatility. That makes for a very dangerous player my friend, do not underestimate 1) Market Share, 2) Capital, 3) versatility. They give lots of options.
If you think that because game developers have not gotten the most outta the wii they are going to stop making games for it, you got it waaay outta line. This is business, if they want potentially huge profits theyll try and make those "toy games" for the wii specially after Nintendo is ever increasing Market Share of consoles and super dominating in games sold.
So before you start "Malthusing" the end, go ask yourself whos holding the cards and whats his game. Oh, and please stop giving the same old excuses, Ive been hearing them for years now.
Just like the lack of a radio "doomed" the iPod to failure, right?
There's a reason you STILL can't find a Wii in most stores: people love them, even people who don't like traditional video games. Get over it. Even better? No "red ring of death" on the Wii.
Skiing in your living room, when you are too old for the slopes--Nintendo understands entertainment better than any other console maker.
-Any bubble bursts just as it reaches its biggest size.
You're thinking of a price bubble. The Wii is the same price it has always been.
-And the Wii is now selling in massively unsustainable numbers. It just cannot go on.
No, it won't go on forever. Sales will peak, and then decline slowly. But they clearly haven't peaked yet.
-The penetration of HDTVs has increased massively over the last two years. Thus cruelly exposing the Wii’s last generation graphics to far more people.
The same people who just don't care whether a game's graphics are last generation or next generation.
-The Xbox 360 is cheaper.
It's been cheaper for a long time, and it has made absolutely no difference to the Wii.
-The Xbox 360 is a huge amount better than the Wii. It has far more games and vastly more good games. And it has Live, by far the best online gaming portal. Gradually the public will come round to understanding these realities.
Stupid public fail to understand reality!!!
-The Wii has a very weak game library. The first party games, a few good third party games. Then lots of dross shovel ware. And game consoles are for playing games.
And Wii owners are buying games. And buying them and buying them. Take a look at the charts in the UK, where you live.
-Nintendo (NTDOY.PK) have now rolled out all their great and famous properties on the Wii. So they have very few places left to go for the stream of AAA titles needed to sustain a platform.
Or else they can make sequels, like every other company does.
-The Wii is not making much money for many publishers so they are voting with their feet and allocating their resources to platforms that will make them money.
It's making plenty of money for companies that invest in it properly. For companies that don't? Like EA? They're in a little bit of trouble. And plenty of people here have already made this point.
-Most of the Wii customer base is the very casual “toy” market. They will be very fickle as they move onto the next “must have” trend. The Wii will become tired.
You said this last year too.
-Money is getting a lot tighter as the world tips into recession. Casual frippery, like most Wii purchases, will be an early casualty.
Most of the world has been in a recession for most of this year already. And what has happened to Wii sales during that time?
-Most people likely to buy a Wii already have. In terms of market penetration Nintendo are now going to suffer from the law of diminishing returns.
The PS2 has sold about 120m units (last time I checked), and the Wii has continually sold faster than the PS2. Why can't it keep going?
-And because the boom has been so massive the collapse of sales will be equally dramatic.
Again, you're thinking of a speculative bubble. And if sales did drop off, couldn't they just decrease the price? Which I think you predicted they would be forced to do in April this year. That prediction didn't turn out too well, did it?
-And when will this be? Let’s put it this way, we are experiencing the last big Christmas for the Wii.
Let's put it this way - I look forward to reading exactly the same article again this time next year.
Look, I agree that the Xbox 360 is really really cool, and if it wasn't for the fact that the hardware is too unreliable I'd probably have one myself. And if you want the best first person shooters etc, you're not going to get them on the Wii. But this is a financial analysis website. You can't just stick your fingers in your ears and ignore every single piece of actual economic evidence about how the Wii is actually performing. Some of your stuff is actually interesting, but you just have a blind spot when it comes to the Wii. Take a break from writing about it, you'll feel better in the long run.
I think Bruce has missed the boat. These "toy" games are immensely popular - and graphics aren't the prime motivator, it's what's fun! Just look at the up-and-coming iPhone/iPod Touch game market. Many analysts are saying that the PSP and DS need to take a look over their shoulder or risk getting run over.
And these mobile games are small, not overly rich in the graphics, but cheap and keeping people entertained.
Remember, that was one of the Wii's original market strategies: we're cheaper than the other guys (especially over the PS3!)
I think someone may have forgotten why people play games in the first place...
"Money is getting a lot tighter as the world tips into recession. Casual frippery, like most Wii purchases, will be an early casualty. "
Casual frippery? Like ALL video games are "casual frippery"! Are you kidding me? No one NEEDS a video game system - ever! The ONLY reason anyone buys a game system is for entertainment.
Now, that said, conventional wisdom shows that two categories actually tend to increase during a recession: alcohol consumption and entertainment purchases (go figure, the people want to "escape" their sometimes nightmarish reality).
Therefore, the recession could actually go easier on the video game industry (not necessarily to the point where these companies don't lose money, of course). And if people are looking to be entertained, it will be in the manner of their choosing, not yours. If they like "toys", they will continue to buy them. There is nothing intrinsically more valuable about a gory shooter or slasher game with hyper-real graphics over a light, colorful, cartoony leisure, party, or platformer game.
Truly, beauty is in the eye of the beholder. Regardless of what you try to convince us to believe.
This is by far the largest steaming pile of fanboy crap to masquerade as serious journalism/analysis I have ever seen in my entire life, and I've been into video games since the oddysey and investing since '87. This is absolutely useless tripe and if there was any justice in the world, Bruce would have to financially reimburse everyone who wasted precious minutes of their lives reading this garbage. I feel ripped off, I want the minutes of my life back both for reading it, and for the time it took for me to write this. Really, the vast injustice of stealing those minutes required me to write this.
Bruce, quit your day job and go pursue something you have competence in. For the good of humanity, please.
This is by far the largest steaming pile of fanboy crap to masquerade as serious journalism/analysis I have ever seen in my entire life, and I've been into video games since the oddysey and investing since '87. This is absolutely useless tripe and if there was any justice in the world, Bruce would have to financially reimburse everyone who wasted precious minutes of their lives reading this garbage. I feel ripped off, I want the minutes of my life back both for reading it, and for the time it took for me to write this. Really, the vast injustice of stealing those minutes required me to write this.
Bruce, quit your day job and go pursue something you have competence in. For the good of humanity, please.
Lots of online stores still able to sell Wii for $50-$100 over retail price.
And they are selling lots of them.
The problem still couldn't find enough supply.
Do you know Wii Fit also out of stock everywhere ?
Mario Kart also out of stock everywhere ?
DS Lite Polar White also out of stock everywhere ?
DS Lite Ice Blue also out of stock everywhere ?
Give me a break.
Nintendo is the only company I know growing in every segment
of their core business, and making very good profit.
the next argument about the quality of games on the 360, its because all the games are just the same- we're seeing this on the wii too, don't get your panties in a bunch. The xbox360 is suffering from constant one-upsmanship, all the market is clawing at the same pile of money: guns, small animals that make tools and crafts, overly muscular steroid enhanced super soldiers, etc. etc. There are subtle differences, but we ain't seeing them unless you SHOW them.
I, myself am trying to revive a broken xbox360 so I can try fable one, and maybe street fighter 4 and with that I'd have to buy a real controller.
this distain, that everyone has with the wii, I can empathize with you, but that feeling with quickly disappear with wii sports resort. Its weird just saying it, but I'm excited for that game, not because my friends will see how much better I am than them, (that's what smash bros. is for), I'm excited for myself to try it out.
Xbox can't produce that and as long as the wii does then they have my dollars.
Early worldwide results from the last 4 weeks: Wii sold 6.0 million units, 360 sold 3.1 million units.
I love you Bruce, but you are cluless!
Another seemingly genius aspect of Wii games is in their simplicity - though simple, these games are highly replay-able and are made with the intention of involving multiple players physically together (whereas on Xbox, internet-based play seems to be the preferable medium).