While the big focus this week has been on the Nintendo 3DS, which finally saw its price and launch date unveiled at a special press event in New York, Nintendo still needs to address their declining Wii console business, which was down 38% in December in the U.S. The Wii declines have hurt Nintendo's bottom line, but so far the platform holder has been reluctant to cut price, and then there's the question of when we'll all see a Wii 2.
During the Nintendo event, we had a chance to chat about the topic with Wedbush Securities analyst Michael Pachter, who seemed rather pessimistic about Nintendo's future console business prospects.
With as much respect for Nintendo management as I can muster, I think Nintendo's completely blown it with their second generation Wii strategy. I think they have the mentality that to launch a new [console] they have to retire the old, and I think that's wrong. I think the right strategy would have been to get a second generation Wii out and keep the old Wii at the same time, and have the second generation be the natural progression upgrade model," he said. "You don't see Mercedes stopping production of the E-Class because they have a C-Class... So they should let people start with the Wii and graduate to the Wii 2, and have online functionality and Call of Duty multiplayer on there and compete with the 360. Instead, they're actually conceding that multiplayer market to Xbox 360 and PS3. They've always conceded it, but now with Kinect and Move, it's a lot easier for people to make 360 or PS3 their starter console."
He continued, "I just think Nintendo's blown it; I think by the time they launch [their next console] if it's Christmas 2011, it's two years too late, and for sure one year too late. So it's over – I don't think they can ever recover. Wii sales will continue to decline and I think Wii 2 will not sell well. And third parties aren't going to support it unless it's really similar to a 360... and when I say similar, I mean so that it's easy for them to port games from 360 to Wii 2. If Nintendo advances the technology, and it's more powerful than a PS3, then no one's going to support it. That's a problem, and so they're really stuck. If they were going to emulate the 360, which is what I thought they'd do, they should have done that in 2009. And if they're going to advance the tech, then 2011 is really not the right year. They're really in between right now."
Ultimately, Pachter acknowledges that he could be wrong. After all, Nintendo's been hugely successful thus far, and we've all certainly learned not to underestimate the company. "All your readers will say, 'Who's that guy to second guess Nintendo management because they're brilliant?' Well, they're right – Nintendo makes a lot of money, and the management has accomplished a hell of a lot more in their careers than I have. I'm just one guy with an opinion," Pachter concluded.
1 Comments
March 9, 2011
Well At least He Covered his ass at the end... I think he needs to see the "it prints money GIF.