Although Microsoft Corporation (NASDAQ: MSFT) and Sony Corporation (NYSE: SNE) sell fine gaming consoles, both companies still are far behind competitor Nintendo Co., Ltd (OTC: NTDOY). The small white box known as the Nintendo Wii has outsold both competitors since it was released over a few years ago and, month after month, it proves its sales dominance over far more capable and advanced consoles. But, as gearheads and feature freaks continue to not understand, better doesn't translate into popular. While the Xbox 360 and Playstation 3 compete on many levels from polygons to high-def audio, the Wii provides engaging gameplay. And, it appeals to more than thumbstick junkies.It's not that the Wii is the best gaming system ever. It just has mass appeal where the other two do not. It also, for the longest time, had a price advantage at $249. While both Sony and Microsoft made numerous price drops and bundle reconfigurations to try and compete on price, the Wii has remained steady at $249 and has handily outsold the other two. Is it really that good? Numbers don't lie. Sony, as an example, spends so much making the incredibly advanced Playstation 3 that it may never make any money off the console itself, no matter how hard it tries. Same goes for Microsoft, which probably loses less money per console than Sony. The "making money with software and royalties" gambit and losing a ton on the hardware itself is dicey and will continue to be so.
What to do? Not much -- the Nintendo Wii has sold 43.75 million units over the last year, to 26.49 million Xbox 360 units and 18.82 million Playstation 3 consoles. Could Nintendo -- of all console makers -- cause Sony to give up on the Playstation 3 and just cut its losses? Microsoft has the bank to continuing competing, but Sony can't stand around and lose tons of money (again and again) on each Playstation 3 sold. The Wii may not be the most powerful or best-looking console, but that does not matter. It engages and creates return customers again and again. That alone will keep it shining for years to come.
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Reader Comments (Page 1 of 1)
12-31-2008 @ 7:52PM
painting said...
Anyway, ecomonics is the essential, I think. Only improve the ecomonic then he can be accepted by peoples.
12-31-2008 @ 8:30PM
Iridium said...
The Wii just proves that in today's society media hype is king. Hype stocks and get rich. Hype a terrible game console and sell millions.
The Wii provides engaging gameplay for about two weeks. After that the novelty wears off and the console sits unplayed.
The Wii doesn't create return customers. If it did then Wii game sales would be great. Instead the game sales are terrible.
If 2008 proved anything it proved that substance doesn't matter, only how good you are at bullshit.
1-01-2009 @ 2:16AM
sitruc said...
Fortunately for Nintendo, many of their hits are in house and their console is making a profit unlike the PlayStation3.
1-01-2009 @ 6:29AM
al coholic said...
Disclaimer...I am not a gamer.
However, we went to dinner at a neighbor's house a couple of weeks ago and after dinner I was coerced linto playing baseball and bowling on the Wii.
I actually enjoyed it.
To me it seems like more family fun for the observers as we all took turns gyrating in an attempt to throw a curveball, or bending our bodies to help a bowling ball get the pins.
As a non gamerI think the Wii is more group friendly than just watching people shoot aliens.
1-01-2009 @ 7:56AM
keith said...
Iridium- you are so so right. The Nintendo Wii is just that, WE wish it was a real gaming system. My boss got one for her birthday, and it came with the Wii fit. She said she used it a couple of times and that she does'nt even touch it anymore since it tells her that she is fat. LOL. I got my son one for his birthday, then an Xbox later at xmas. my son is 11 and he does'nt play it anymore because he said that there are'nt any games on the system. The xbox on the other hand is a tool i use to help with school and chores and my son is an A student and every trash can in the house is always emptied. This story here seems to suggest that if you sell alot of products over your competition, that you must be the best. Well the Wii sells the last i checked, sold 1 game per system, the Xbox sells 8 1/2 games per system and dominates all systems with this history making attach rate. Proof is in the pudding.
1-01-2009 @ 9:26AM
Rick said...
I think the problem is you just don't get it. The reason the Wii is so successful is that it crosses the age barriers. When I was a teenager (many moons ago) I would spend 10 12 hours a day in arcades mastering everygame. As you get older you realize thats alot of wasted time. Now that I'm 40 I never thought I would own a playstation or X box or whatever but I have kids so I gave in and bought one some years ago and the used it but it was very anti-social. Then I played a Wii last year and changed my mine and bought one and have not regretted it since. The reason, it's social. It even gets some of my friends who are kind of quiet out of their shell. You've never seen more competiton than when you have Mario Kart going with 20 or so friends over and loser has to sit. Hard core gamers may never understand (I didn't until I got one) but it's the social aspect and the ease of use that makes it so popular. And FYI I lead a high school youth group in my home and half of them get there early and stay late just so we can all play. Furthermore I know of at least 5 of my friends who have bought a Wii after playing at my house and they are having the same results I did................