Netflix and Nintendo have finally announced that the streaming movie service is coming to the Wii later this spring, but if you ask Wedbush Morgan analyst Michael Pachter, this move is actually not very significant.
"We are not convinced... that the addition of the Wii to Netflix’s stable of Internet-ready devices will have as significant an impact as did the Xbox 360, nor as significant as we expect for the PS3," Pachter said. "In our view, only a small percentage (likely fewer than 20%) of Wii owners have connected their consoles to the Internet, which is required to activate the Netflix service. In contrast, we believe that more than 75% of Xbox 360s are connected to the Internet, and more than 80% of PS3s are connected."
While the adoption of Netflix for Xbox Live actually did spark some subscriber growth for Netflix, Pachter does not see the same thing happening when it comes to the Wii consumer base.
"While we expect some traction from today’s announcement, we do not perceive that the addition of the Wii will jump start Netflix activations. Instead, we think that the Wii installed base will embrace the Netflix service only gradually, and think that this alliance will allow Netflix to continue the momentum started last year with its Xbox 360 partnership," Pachter noted. "We believe that the Xbox 360 installed base is approaching saturation for the Netflix service, and think that the addition of the PS3, the Wii, and other consumer electronics devices will allow Netflix to maintain its prior pace of subscriber additions as new customer additions from the Xbox 360 installed base begin to slow."
It's ironic to think that the console with the largest installed base (26 million in the U.S.) would have the least impact on Netflix growth, but we believe Pachter's reasoning is sound here.
5 Comments
8 months ago
WHY do people still listen to Pachter? He is usually wrong with his predictions and has become a joke among gamers. He is also basing his prediction on a guess (he admits he has no idea how many Wii owners have connected their system to the Internet). Pachter is a joke and people should stop giving him attention.
6 months ago
It will be a success for them, but not to the extent that they would hope. It's true that a minority of Wii owners are online, but the exact percentage is probably only known by Nintendo. And the disc is not for technical reasons; the PS3 is using one as well. It's merely a way to get around the 360 exclusive contract which stipulates the solution be a downloadable file. Anyone who owns multiple consoles will not use the Wii for netflix unless it's for their kids in other room. The primary HD console will be used for the living room movie service. The problem here is that the mass market Nintendo consumer is not a technically savvy bunch like the hardcore among us; they're unlikely to use streaming movie services at all, let alone through their game systems. Regardless of that, this partnership will still be nothing but positive for both Netflix and Nintendo.
4 months ago
im not surprised by this as the casual gamers (wii) are not that interested in creating a home entertainment center around their wii, vs people that have the ps3 or xbox
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3 months ago
This service could prove to be useless if Wii owners don't want to connect their consoles to the internet. Everybody already has more than one source of streaming movies, why bother to see them with the Wii?Easy Saver
2 months ago
To be honest i don't think most Wii users would use this service. Most use their console to play active motion sensor games. It's a slightly different console than something like the PS3 where many users use the multimedia functions.
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