Is the Game Over for Wii?

When Nintendo first introduced the Wii in 2006, they did so with a lower price point than the competition and a focus on capturing interest from all demographics. Demand for the Wii was so high that finding a Wii in a store was a rarity until earlier this year. Since then, Nintendo has dominated in sales of consoles leaving both the Sony Playstation 3 (PS3) and the Microsoft Xbox360 in the dust. In August, both Sony (SNE) and Microsoft (MSFT) lowered the price of their consoles to $300, but the PS3 came out victorious in September with monthly console sales surpassing Wii for the first time. Interestingly, Nintendo retaliated and lowered the price of the Wii to $200 in September.

I wanted to see how traffic to playstation.com and nintendo.com has changed over the past year and what this might tell us about upcoming holiday sales, particularly with the price drops of both the Wii and PS3. While people may visit these sites looking for information on games rather than consoles, I think it is more likely visitors to the site are those interested in researching consoles. Many games are produced and sold by companies other than Nintendo or Sony and have their own websites; and those who don’t already own a console would most likely go to the manufacturer’s website first.

If we look at the chart above, it seems the PS3 price drop gave Sony the upper hand in September, at least for one month.

• For a majority of the time period between September 2008 and September 2009 while the Wii was leading in console sales, nintendo.com was able to draw more unique visitors per month than playstation.com
• Since the announcement of the PS3 price drop in August, the number of unique visitors to playstation.com was larger than the number of unique visitors to nintendo.com for the first time since October of 2008
• Although Nintendo announced a price drop to the Wii in September, it lagged the PS3 both in sales and in unique visitors to its site, suggesting that customers considering purchasing a Wii are not as price sensitive

In addition to the number of unique visitors, we can look at the growth of each website from September last year to September this year:

• From September 2007 to September 2008, both nintendo.com and playstation.com saw little to no change in website traffic
• From September 2008 to September 2009, not only did nintendo.com traffic stay flat, but playstation.com experienced extreme positive growth at a whopping 40%
• It is clear from the first graph that for a majority of 2009 nintendo.com has experienced a declining number of unique visitors, while playstation.com unique visitors have steadily been on the rise

It seems as though interest in Wii has started to slow down in the past year. With the high number of sales Wii has experienced in the past, it is no surprise that eventually it would reach a point where demand slows down. There are only so many people left who want a Wii and don’t have one already.

Sony has also announced a partnership with Netflix allowing PS3 users to stream movies and videos on their consoles starting in November, which could further push interest and sales for the PS3. With a September head start it will be interesting to see if Playstation can stay ahead of the Wii in this upcoming holiday season.

Comments

[Shaftsinker:]

Interesting use of website traffic here.

Game consoles have always had the absolute superior product come out on top, and while the PS3 may never actually catch up to the Wii it will definitely finish out on top of the 360.

Nov 05 11:19 AM

[jwebb1970:]

Really? So why did the Atari 2600 smoke the technically superior Intellivision? In terms of under the hood stuff, the N64 was -on paper - more powerful than the PS1, yet we know what happened to both of those consoles.


On Nov 05 11:19 AM Shaftsinker wrote:

> >
> Game consoles have always had the absolute superior product come
> out on top, and while the PS3 may never actually catch up to the
> Wii it will definitely finish out on top of the 360.

Nov 05 12:30 PM

[Boaz Berkowitz:]

Interesting correlations.

I have to agree with jwebb1970. Marketing and image as well as other factors such as price often wins out over superior hardware and not just in video game consoles. VHS won out over Betamax, PCs over Apples, etc.

Nov 05 12:53 PM

[robert99:]

The Wii will get a bump in sales for Christmas, but other than that, it is done. When it came out, I bought some NTDOY and a Wii to test it out, and came to the conclusion that the Wiimote could be a game-changer, but it would require innovation from Nintendo and third party developers to really do anything interesting with it. Unfortunately, no one ever did anything beyond the obvious. I made 100% on my original NTDOY investment, but I don't think I'll be picking any more up, even though it is damn close to the price I originally paid.

Nov 05 05:44 PM