Nintendo Wii: Facing the Inevitable

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 |  Includes: MSFT, NTDOY
by: Bruce Everiss

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 (OTCPK:NTDOY) 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