Monday, April 16, 2012

Wii U: Nintendo will do just fine

Analyst Pietro Macchiarella with Parks Associates sees difficulties ahead for Nintendo. "If those rumors are true, Nintendo's new strategy of appealing to a larger gaming audience, and particularly to core gamers, will become even more difficult to pursue," Macchiarella said. "With likely competition from new Xbox and PlayStation consoles by the end of 2013/beginning of 2014, it seems unlikely that core gamers will be attracted to the Wii U."

Macchiarella does see some positives for Nintendo. "Nintendo has never been successful because of graphics or CPU power. Game play (and the popularity of characters like Mario) made its consoles successful," noted Macchiarella. "A console on par with current generation consoles will be enough to make it appealing to the same people who bought the Wii, as long as the price is right. The main problem I see is that the market has changed compared to six years ago (when the Wii launched). Casual players now have multiple alternatives, particularly on smartphones and tablets. They might think twice about spending $300 on a console, unless they find something really unique about it."

The pricing of the Wii U is more problematic, in Macchiarella's view. "In our surveys, we see that purchase intentions of game consoles for the next few months are a little higher than last year (12% of broadband households expressed intention to buy a console in the first half of 2012 vs. 9% at this time last year). I think this positive trend will continue in the second half of the year (unless there are significant changes in the economic environment). For the Wii U, a $300 pricing point would be very hard to defend in the market, especially with Xbox + Kinect already being sold at that price point and likely to go lower once the Wii U comes on the market. I think the Wii U sales will struggle if priced at $300 and at that point even Mario would not be able to help."

From the article, "Wii U: "Nintendo will do just fine"" by Steve Peterson

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