Nintendo: The Wii Bubble Has Burst 39 comments
-
Font Size:
-
Print
- TweetThis
Inevitably, and for reasons explained many times here, the Wii bubble has finally burst. In the half year to the end of September sales were down by 40% compared with the year before. Nintendo (NTDOY.PK) president Satoru Iwata has no option but to admit: “Wii has stalled.” He even admitted that the price drop has failed to arrest the decline: “With the price drop, sales returned to a certain level, but they just did not reach the level of last year around this time”. Which was all as inevitable as night follows day.
A lot of the success of the Wii was just a fad. People became lemmings under the onslaught of peer pressure, just like with the Hula Hoop and Rubik’s Cube for previous generations. And fads have very sudden endings as the zeitgeist moves on to something new.
The Wii is a very strange and paradoxical device. Its hardware capability is mainly last generation, yet it boasts an innovative and compelling gesture interface. Most Wiis are bought as family toys and are little used, yet it has some amazing games including possibly the stand-out title of this generation, Super Mario Galaxy.
The Wii has had its popularity and life massively extended by the Balance Board and Wii Fit, but there are only so many overweight middle aged women willing to pay so much in a feeble attempt to assuage their vanity. So it looks like this market is exhausted, much to the dismay of the many publishers who thought that this was a bandwagon they could jump on. The reality is that the Balance Board is panning out as being the Reebok Step Mark 2.
It doesn’t help that you can buy a vastly better machine, the Xbox 360, for less money. Even Sony (SNE) has tried to be more price competitive and has improved its act in many other ways. Both machines are introducing gesture interfaces that will finally remove the Wii’s main trump card.
We have known for a long time that the Super Wii is on the way with HD graphics and a rumoured Blu-Ray disk drive. But this is thought to be coming some time after the middle of next year and the market needs it now. Nintendo has gotten its timing very wrong this time.
It has to be said that the Wii has done video gaming a massive amount of good. It has taken the medium to new markets and new demographics, vastly expanding it for everyone’s benefit. Nintendo has introduced new genres of games and extended old genres in a prodigious burst of creativity. And it has continued in its fine tradition of production values that put most of the rest of game publishing to shame.
So what is going to happen? Well it is a golden opportunity for Microsoft (MSFT) (and to a lesser extent Sony) to make hay whilst the sun shines. They can fill the vacuum that Nintendo has created. They need to give tens of millions of Wii owners a compelling reason to upgrade and I am sure that their marketing teams are working at doing exactly that. And my prediction still holds that the Xbox 360 will ultimately sell more units than the current non HD version of the Wii.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 39 comments:
Better machine indeed. LOL
No... my PS3 does not RRoD, have a drive fail, I don't pay 800 points (with a conversion rate to USD so you get confused and spend more, its a science) to change my online name, I do not have server outages on bad days and connection problems to Live, my TV does get sounds from my PS3 and the list goes on.
We need more than MSFT to rule this market because they will be the death of gaming. Monopoly is shyte for everyone. PS3 please.
Was it a bubble? I don't think so, but it became a bad alternative when no new must have titles got published for it. I think they could have avoided this situation if they had managed to make the WiiWare store their key distribtuion channel for must have titles. After all, the console is regarded by most as a place for new experiences, Nintendo themselves say that graphics isn't what's most important but gameplay is. So... with the Wii they had created this machine that sported low-tech and an original, interesting interface. Thus, the best way to go for them from thereon would have been to get a lot of indie developers on board and allow them to distribute their titles on WiiWare and make a lot of advertisement for the WiiWare channel on TV and the net.
Future titles similar to Wii Sports Resort could have been distributed mainly here. This didn't happen.
So their problem is with the lack of any software at all to speak of. Not that the console isn't HD and lacks Blue-Ray. The concept of the Wii as a console was never flawed, the game distribution and lack of actual games was.
Wii Sports Resort is what the first Wii Sports should have been (although it still lacks online play similar to Mario Kart Wii), so a lot of consumers see this as one and the same product, and new consumers are confused as to why they need to buy Resort separately; they also don't see any other incentives to buy the console. Galaxy caters to the youngest demography as do Metroid and Zelda, but they don't really showcase the wiimote in any amazing new way, so the youngest demography are also slightly confused here. They like Galaxy, but that title alone isn't a reason to buy the console.
If it is as you say that the "Super Wii" will be released next year, then I hope that the new Zelda title they are developing is developed with HD graphics in mind so that they can easily convert it to the "Super Wii" when that console is released. As Nintendo has stated it's a lot more expensive to develop a title with HD graphics, but if they are investing a lot of time and effort in "new Zelda" in terms of story, gameplay, gameworld, then they should also invest in making the graphics compatible with their next console as well, even if it wont come out until 1 or 2 years from now. I'm just saying this because it would be a good idea considering Nintendos track record in releasing Zelda titles (they take a long time to develop). Then again, their next console will probably be immensely more powerful so it questionable if it's really such a good idea to develop with two so distinctly different platforms in mind.
Wii's idea is great, but it's just that they didn't follow through with enough games to maintain a full head of steam. In order for a console to succeed, you need 3rd party developers to produce good games for it, otherwise its potential goes unfulfilled. Nintendo came out with some great games for the Wii, but without the 3rd party developers onboard to provide more good titles, then the Wii was quickly exposed as an under-supported console being passed over by developers for the graphical superiority of 360 and PS3.
I think that 3rd party developers only hurt themselves by not producing more Wii-focused titles from the start, to take advantage of Wii's great install base. Instead you saw scenes of major publishers fuming at Sony to reduce their console prices. These developers could have made stronger efforts to change their mindsets towards exploiting the fresh untapped frontier of motion control, but they were too mired in their traditional ways of thinking.
I have yet to see a Wii game that uses the finer control of Motionplus to allow me to toss a grenade at an enemy, or to fling a Tron Deadly Disc. I have yet to see a game that makes use of the Balance Board for duck-and-reload like Time Crisis. I have yet to see a game that makes use of the Wii jogging style of locomotion to allow me to travel around a playing field hunting badguys, while jogging on the spot in my living room. I have yet to see a game which employs the same fun punching dynamics of Wii boxing, to allow me to similarly wallop supervillains, or even just to box against an opponent on the internet. Etc, etc.
There were so many game ideas that 3rd party developers could have pursued for the Wii, but these business-as-usual developers were just so entrenched in their traditional ways of thinking, that they couldn't come up with creative new ideas in the direction of motion control. It makes me worry that when Microsoft's Project Natal comes out, game developers will once again be all thumbs.
They simply haven't internalized the possibilities of motion control yet.
You can state your opinion that the 360 or PS3 are better systems and there is merit in those opinions, but how is that newsworthy? Why is this article in the news anyway? Even if they should, it is laughable to think that any systems will sell more than the Wii this gen.
The article writer is ignorant (or trolling), has an agenda against the Wii, used quotes and figures out of context and is basing life cycle sales on an anomaly. Odd how the writer did not even mention the PS3 and its success and impact on the past few months so he probably has something against the PS3 too.
Again, how is some fan boy opinion in Google News, who approves this? You people really should check what you publish.
The PS3 has been outselling the 360 for the past few weeks by about 100,000 consoles per week. It's obvious this gap will become greater as the holiday season hits as it's obvious that now, especially after the recent price drop the PS3 is the superior system in terms of value and capabilities.
And also on that note the 360 is only 7 million units behind the Wii which is small when compared to the PS3 which is 16 million units behind (all these figures are for the U.S.)
What I'm getting at here is the gap here is not one that Microsoft will benefit from as much as Sony will, especially if the buyers in these markets make informed decision about which console to purchase. I'm not knocking the 360 but when comparing it to the PS3 it's clear the PS3 has better value (free online, free full HD capabilities, free wi-fi adapter, blu-ray player etc.)
But none of this is a surprise, but rather part of the natural life cycle of a product. The recent price drop was a clear indication of this.
Nintendo's games will not be enough save them if they want to remain the industry leader. They will need innovative hardware, not software.
But yes, they do make some fine games :)
On Nov 01 08:27 AM Big Moving Stock wrote:
> Gaming is a part time passion of mine, since childhood many moons
> ago. Agreed that Nintendo does not have the most technically superior
> hardware but they do have something nobody else has and probably
> never will. They create the best 1st party software by a long shot
> and they own the best franchises in the history of gaming. Mario
> - Zelda - Metroid, etc.. Nintendo has never tried to have the "best"
> hardware or machine, but what they have strived for and largely succeeded
> at, is producing the software and games that are the most fun and
> appealing to the largest audience of users, both casual fans and
> hardcore gamers. I Love Nintendo!
If Microsoft's and Sony's upcoming motion control systems take off, it will have been because Nintendo carved a path ahead of them with the Wii. And yet, if Nintendo were to release a Wii-2/Wii-HD next year with superior graphics than its rivals, even while MS and Sony field their new motion control systems, then the lazy developer community will go rushing back to Nintendo to shelter under those superior graphics, rather than venturing into the bold new world of motion control, which would require them to think differently. Instead, developers would much rather shun change and fall back on the same old comfortable practice of increasing the number of polygons on their models and slapping higher resolution textures on them.
Nintendo needs to generate more excitement by coming out with a new Wii model. Something with REAL HORSEPOWER. This would combine its interface with the best video - surpassing the XBox 360 and PS3.
This would bring excitement to real gamers - the ones who sustain a platform - rather than the casual players who lose interest.
I haven't played on my Wii for the past year. Unfortunately, the video is still like playing a toy rather than a more photorealistic console like the PS3.
With the PS3 also playing Blu-Ray Disks, with the cost going down, with Netflix on PS3, the Wii was being outstripped.
Fad? Bubble? Doesn't really fit either definition after almost 3 years of record-breaking sales without a price drop (e.g. the hula hoop you cite was a true fad with a much shorter boom-to-bust cycle), and a control interface that you yourself have stated "is the future of gaming".
"People became lemmings under the onslaught of peer pressure". Peer pressure? Really? In your mind, THAT was the main driver of Wii sales? Like being pushed to try cigarettes by the cool kids behind the bike sheds at school? Interesting theory. Idiotic, but interesting. Some evidence would be nice. Maybe some photos of the kind of 'people' you know who buy Wii's to fit in with their peers would be good for a laugh.
"Most Wiis are bought as family toys and are little used" Again, more conjecture presented as fact? Considering the Wii still has a decent ratio of software sales to installed hardware it must mean that the few people still using their Wii's must be buying a crapload of software each to compensate. Or, you could be wrong. Hmmmm.
My favorite line has to be about how, and I paraphrase a little, Balance Board sales require "overweight middle aged women willing to pay so much in a feeble attempt to assuage their vanity". I always find I respect a journalists opinions more when they throw in a bit of sexist stereotyping for good measure. Really adds credibility.
Anyway, Wii sales are dropping. Not so unusual given that it's been out for 3 years, we are in the throes of an excessively severe recession, and its pricing is no longer very competitive. Even though its sales drop is steep, its numbers are still strong compared with rival machines, and given its record performance so far some sort of saturation is to be expected. Considering current monthly numbers, the impending release of Super Mario Bros Wii, the huge installed base, blah, blah, blah... even with a fall in profits this year, this 'fad' still has enough life to keep Nintendo crying all the way to the bank for a while yet.
(Your prediction that the 360 could catch up to the Wii if Nintendo discontinues it and sells an HD version? Wow. What a gift for pointless precognition. So basically if Nintendo takes its horse out of the race when it's furlongs ahead, maybe Microsoft's horse could catch up? Good to know. Brilliant. Of course we're just looking at unit sales and ignoring any reference to actual profits right? And how Nintendo has a seemingly insurmountable lead this generation in both hardware and software profitability. Because that's not really important for a financial site anyway...)
It is quite possible sales have been hurt by the economy.
Consider that the value conscious buyer may be the hardest hit by unemployment and furloughs.
A game console is not exactly a necessity for Parents.
One only needs to read the post to conclude the WII is no Hula Hoop. But having had a Hula Hoop I can assure every parent you could save a fortune with that toy vs these toys and still get your exercise. And who cares about unit sales when the more you sell the more you lose? I believe Microsoft has always lost money in this area (a Bill Gates pet project)
Every gaming system since the begining has seen falling sales and hype dwindle after three years. And when you add a depression less people can afford or want to pay for the endless cost of expensive never-ending accessories ( each one costing more than a Hula Hoop). One can agree with the Author's use of the word Peer-Pressure as it relates to many parents. My parents didn't want to deprive me of a $5 hula-hoop but many of todays parents even poor parents think one must buy there children all the hottest toys like $200 iPhones or $300 gaming systems and $60 games.
Still, Nintendo and Wii will not be a Fad. They face a bad economy and end of system cycle but they have always had a loyal following that will continue. I do agree with those who say they've had fewer must own games which is an issue. But my son will always want the next gen of what ever Nitendo produces even as he moves into his late 20's.
On Nov 01 03:00 PM doublenic wrote:
> Misguided analysis based on supposition without supporting evidence
> leads to an expectedly poor conclusion...
>
> Fad? Bubble? Doesn't really fit either definition after almost 3
> years of record-breaking sales without a price drop (e.g. the hula
> hoop you cite was a true fad with a much shorter boom-to-bust cycle),
> and a control interface that you yourself have stated "is the future
> of gaming".
>
> "People became lemmings under the onslaught of peer pressure". Peer
> pressure? Really? In your mind, THAT was the main driver of Wii sales?
> Like being pushed to try cigarettes by the cool kids behind the bike
> sheds at school? Interesting theory. Idiotic, but interesting. Some
> evidence would be nice. Maybe some photos of the kind of 'people'
> you know who buy Wii's to fit in with their peers would be good for
> a laugh.
>
> "Most Wiis are bought as family toys and are little used" Again,
> more conjecture presented as fact? Considering the Wii still has
> a decent ratio of software sales to installed hardware it must mean
> that the few people still using their Wii's must be buying a crapload
> of software each to compensate. Or, you could be wrong. Hmmmm.<br/>
>
> My favorite line has to be about how, and I paraphrase a little,
> Balance Board sales require "overweight middle aged women willing
> to pay so much in a feeble attempt to assuage their vanity". I always
> find I respect a journalists opinions more when they throw in a bit
> of sexist stereotyping for good measure. Really adds credibility.
>
>
> Anyway, Wii sales are dropping. Not so unusual given that it's been
> out for 3 years, we are in the throes of an excessively severe recession,
> and its pricing is no longer very competitive. Even though its sales
> drop is steep, its numbers are still strong compared with rival machines,
> and given its record performance so far some sort of saturation is
> to be expected. Considering current monthly numbers, the impending
> release of Super Mario Bros Wii, the huge installed base, blah, blah,
> blah... even with a fall in profits this year, this 'fad' still has
> enough life to keep Nintendo crying all the way to the bank for a
> while yet.
> (Your prediction that the 360 could catch up to the Wii if Nintendo
> discontinues it and sells an HD version? Wow. What a gift for pointless
> precognition. So basically if Nintendo takes its horse out of the
> race when it's furlongs ahead, maybe Microsoft's horse could catch
> up? Good to know. Brilliant. Of course we're just looking at unit
> sales and ignoring any reference to actual profits right? And how
> Nintendo has a seemingly insurmountable lead this generation in both
> hardware and software profitability. Because that's not really important
> for a financial site anyway...)
No, the Wii isn't a fad nor was it in a bubble. If the author had taken a few minutes to research the lifecycle of game consoles through the ages, he would have noticed that every game machine goes through what the Wii goes through. This applies to the Atari 2600, the Nintendo Entertainment System, the Dreamcast, etc.
Does he think sales of anything can be sustained for the lifetime of the product? Was Frosted Flakes cereal once in a bubble? How about the old fruit-flavored roll-ups? I guess they were in a bubble too.
The writer is obviously not a professional scribe. This is something he does on the side, right? Right? I would hope so. The level of research, writing, and "journalism" on Seeking Alpha is deplorable.
I don't write articles for free if they dont pay I dont play haha
having said that i enjoy the commentary from the posters here even though the bulk of them know very little about investing
This is a great place for the contraraian indicator
when the majority of people criticize someone it is usually because they are right
That triat is most valubale about seeking alpha
On Nov 01 03:00 PM doublenic wrote:
> Misguided analysis based on supposition without supporting evidence
> leads to an expectedly poor conclusion...
>
> Fad? Bubble? Doesn't really fit either definition after almost
> 3 years of record-breaking sales without a price drop (e.g. the hula
> hoop you cite was a true fad with a much shorter boom-to-bust cycle),
> and a control interface that you yourself have stated "is the future
> of gaming".
>
> "People became lemmings under the onslaught of peer pressure". Peer
> pressure? Really? In your mind, THAT was the main driver of Wii
> sales? Like being pushed to try cigarettes by the cool kids behind
> the bike sheds at school? Interesting theory. Idiotic, but interesting.
> Some evidence would be nice. Maybe some photos of the kind of 'people'
> you know who buy Wii's to fit in with their peers would be good for
> a laugh.
>
> "Most Wiis are bought as family toys and are little used" Again,
> more conjecture presented as fact? Considering the Wii still has
> a decent ratio of software sales to installed hardware it must mean
> that the few people still using their Wii's must be buying a crapload
> of software each to compensate. Or, you could be wrong. Hmmmm.
>
>
> My favorite line has to be about how, and I paraphrase a little,
> Balance Board sales require "overweight middle aged women willing
> to pay so much in a feeble attempt to assuage their vanity". I
> always find I respect a journalists opinions more when they throw
> in a bit of sexist stereotyping for good measure. Really adds credibility.
>
>
> Anyway, Wii sales are dropping. Not so unusual given that it's been
> out for 3 years, we are in the throes of an excessively severe recession,
> and its pricing is no longer very competitive. Even though its sales
> drop is steep, its numbers are still strong compared with rival machines,
> and given its record performance so far some sort of saturation is
> to be expected. Considering current monthly numbers, the impending
> release of Super Mario Bros Wii, the huge installed base, blah, blah,
> blah... even with a fall in profits this year, this 'fad' still has
> enough life to keep Nintendo crying all the way to the bank for a
> while yet.
> (Your prediction that the 360 could catch up to the Wii if Nintendo
> discontinues it and sells an HD version? Wow. What a gift for pointless
> precognition. So basically if Nintendo takes its horse out of the
> race when it's furlongs ahead, maybe Microsoft's horse could catch
> up? Good to know. Brilliant. Of course we're just looking at unit
> sales and ignoring any reference to actual profits right? And how
> Nintendo has a seemingly insurmountable lead this generation in both
> hardware and software profitability. Because that's not really important
> for a financial site anyway...)
I also have a Wii, which I bought 2 MONTHS after launch and still had to camp out at Best Buy to get. I still can't believe Nintendo would underproduce what they knew would be one of the hot toys for several years. I also can't believe the sheer volume of crap that Nintendo allows to be sold for the Wii. From the NES to the Gamecube Nintendo has kept a tight reign on content for their consoles and only allowed top quality games to get released. Apart from Nintendo's own games and a small number of third party games (mostly cross platform) the Wii is a wasteland of garbage games that I wouldn't pay $5 to download, let alone $30-50 to buy in the store.
Believe it or not, I was originally going to get a PS3 and ONLY a PS3 but the high price at launch basically killed that deal for me. I am now too committed to the 360 and Wii to contemplate buying a PS3 especially considering that the PS3 has few exclusives that really make me want to buy one and I have no need for Blu Ray, as upscaled DVD is good enough for me. Even with the new $299 price drop, it's not worth it for the handful of games I would actually play. Most of the best games on PS3 are cross platform anyway and the online experience is sub-par compared to XBox Live and Marketplace. I don't think PS3 is going to pass up the 360 or Wii before the end of this console cycle.
On Nov 01 08:11 AM elmerfudpucker wrote:
> The XBOX360 a "vastly better machine"?? Have you even heard of the
> "red ring of death"? They are cheaper for a reason. Give this simple
> search a try www.google.com/search?...;source=hp&q=x...
>
>
> Better machine indeed. LOL
As for Wii, Nintendo made so much off it because its higher priced for an inferior product and more importantly they were the developers of the games. Do you remember the first Nintendo? Black box games? All Nintendo created...now they need the 3rd party developers to step up but most of them are already signed up with xbox and are always going to develop for that platform first and the others later...
On Nov 02 07:28 AM Norevenand wrote:
> The author is a clown. He has no business writing about an industry
> he knows nothing about. It's also telling that the less knowledgable
> readers throw in their comments like sheep because of a catchy headline.
>
>
> No, the Wii isn't a fad nor was it in a bubble. If the author had
> taken a few minutes to research the lifecycle of game consoles through
> the ages, he would have noticed that every game machine goes through
> what the Wii goes through. This applies to the Atari 2600, the Nintendo
> Entertainment System, the Dreamcast, etc.
>
> Does he think sales of anything can be sustained for the lifetime
> of the product? Was Frosted Flakes cereal once in a bubble? How about
> the old fruit-flavored roll-ups? I guess they were in a bubble too.
>
>
> The writer is obviously not a professional scribe. This is something
> he does on the side, right? Right? I would hope so. The level of
> research, writing, and "journalism" on Seeking Alpha is deplorable.