Shortages of the ultra-popular Nintendo Wii game console may do what Microsoft (NASDAQ: MSFT) Xbox 360 and Sony (NYSE: SNE) PS3 have not been able to do in the competitive marketplace. They may give the two companies trying to catch the Wii a leg up for the holidays. Nintendo "said it cannot keep up with demand and that U.S. consumers should expect shortages this holiday season," according to The New York Post. The paper adds that "just last month the Wii became the best-selling console over Microsoft's popular XBox 360 and Sony's ailing PlayStation 3, pulling a virtual hat trick by making the Wii the must-have device in North America, Europe and Japan."
The news is bad for Nintendo shareholders by good for Microsoft and Sony. Microsoft has just launched is popular "Halo 3" game which has already hit sales of over $300 million. Early evidence shows that the game has helped double Xbox 360 sales in the early going. Sony has just dropped the price on the PS3 in Europe, and the industry believes that it will follow suit in the US.
Nintendo may have fallen into one of the great traps in consumer electronics--underestimating the popularity of its own product. If so, it is a major gaffe for the Japanese company. It is hard to imagine Apple (NASDAQ: AAPL) running low on iPods, iPhones, or Macs. But, then again, it may be better run than Nintendo is.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
10-08-2007 @ 9:59AM
Derric said...
Nintendo hasn't been able to keep up with demand yet, but that hasn't stopped them from demolishing the PS3 and, to a lesser extent, the Xbox 360 month in and month out. While Nintendo takes the initiative to introduce more intuitive ways to play, Sony and Microsoft were content to stick with what's been done for the previous twenty years. Faced with that competition, it's understandable why Nintendo may have only been cautiously optimistic in regards to the Wii.
10-08-2007 @ 12:44PM
walk0nwalls said...
That may be so, but it still be said that irregardless of whatever intuitive or novel control schemes that Nintendo has introduced to the market, the facts still stand that of the consoles the Wii is still technically the weakest machine. Part of the Wii's power is that it appeals to a significantly larger demographic than the more traditionally-focused 360 and PS3.
Indeed the Wii is powerful, but its still a long way away from winning over the staunchest of gamers. In that field the 360 has done well to convince most hardcore gamers that it's a console to back, with a large availible library of diverse games it boasts an easy purchase for any gamer looking for a wide range of gameplay experiences.
The Wii itself must overcome the few remaining hurdles to its marketplace control, which is to say: a more diverse library, proving its capacity for being a future-safe investment, and widening third-party support.
Do not speak of the PS3, it will come from the grave and drag you down into the ground from whence it came and you will suffer as horrid a stigma as it suffers in the gaming world.
10-08-2007 @ 2:52PM
DJ said...
"The news is bad for Nintendo shareholders by good for Microsoft and Sony."
Bad news for Nintendo shareholders? That's news to me. I bought my Nintendo (NTDOY) at about $26 a share in November before the Wii launch,
It hit $30 by December, $40 by May, $50 by early July, and $60 by late July.
It's at $69 today.
10-09-2007 @ 9:54AM
tone said...
Yeah, our buddy Aime made the announcement quite awhile back. I'm just not sure if it's a marketing ploy or not though.
10-12-2007 @ 3:27PM
Joshua J. Slone said...
"It is hard to imagine Apple (NASDAQ: AAPL) running low on iPods, iPhones, or Macs."
It also took iPod about 3 years (http://en.wikipedia.org/wiki/Image:Ipod_sales.svg) to sell what Nintendo has in 9 months. It took iPhone a few months to reach 1 million, a number Wii has hit each month since launch.
Wii has had stronger demand than any gaming console before it, and even record-setting production hasn't been enough.
11-23-2007 @ 10:25AM
JukeBox said...
"Do not speak of the PS3, it will come from the grave and drag you down into the ground from whence it came and you will suffer as horrid a stigma as it suffers in the gaming world"
What?