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The Wii won, but for how long?

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Nintendo’s Wii is on track to outsell Sony’s record-setting PS2 at 115 million units sold. That’s according to comparative NPD sales data for both systems. No other console has sold faster in its first eight months of availability than the Wii.

Despite its undisputed initial success, however, several industry pundits remain unconvinced. “The Wii will fade,” they say, suggesting that the machine’s novel motion-controls and antiquated graphics technology will soon cause the system to wane in popularity.

They’re probably right, assuming one of two scenarios. Scenario A: Nintendo and/or its third-parties are incapable of delivering compelling software throughout Wii’s life cycle (however long that may be). Or Scenario B: That Nintendo will not release a Wii successor before the traditional five year shelf life expires.

Despite what core gamers may think, Nintendo has marketed loads of compelling software thus far. Notice the use of “marketed” as opposed to “delivered.” The latter is up to the individual gamer to decide, whereas the former is completely up to Nintendo. And they’ve done a brilliant job so far in telling the world that they make the most entertaining home console. Perception is everything, and Nintendo owns it at the moment. Because of this, people continue to gobble up Wiis, and third-party publishers have more exclusive games forthcoming for the system than both the Xbox 360 and PS3 as a result.

Wii vs. PS2 launch sales (NPD)Wii vs. PS2 launch sales (NPD)

But Nintendo can’t last on great marketing and the novelty of Wii Sports alone. They must keep a steady influx of Wii Sports-eque games in the pipe like the forthcoming Wii Fit and Wii Music if they wish to keep their audience engaged. To fill in the gaps and appease those looking for more traditional games, Nintendo’s venerable list of first-party titles such as Mario, Metroid, and Zelda, and non-deviant third-party games should broaden the console’s library rather nicely.

Analyst Michael Pachter agrees.

“I think consumers will favorably respond to the system as long as games stay fresh and fun,” he says. “That may be a very long time.”

That being the case, Scenario A seems unlikely provided Nintendo doesn’t get lazy. Given their recent taste of success, it’s doubtful they will.

There is one caveat with Scenario A, however; that is the relevance of the hardcore gamer to Wii’s sustainability. If Nintendo is in fact expanding the market, then all should be well at Redmond headquarters. But if Nintendo has merely rallied traditional gamers for a short time while only adding a small number of readily-seen non-gamers, the company could be in trouble as the Wii’s current lineup of games does little to sate the long-term appetites of hardcore gamers.

So what if gamers, including the casual ones, ultimately grow tired of Wii’s limited graphics and processing power in just two to three years? Analyst Michael Pachter says not to overlook Nintendo’s ability to abandon the standard five year life cycle when it comes to releasing a Wii successor.

“Consumers may hope for improved graphics, and my guess is that Nintendo will comply,” he says. “In two or three years, commodity prices for graphics processors and CPUs may decline to the point that a High Definition Wii could be introduced. If so, Nintendo will likely introduce one.”

In other words, anything is possible. If Miyamoto and company have taught us anything over the last year, it is that they can’t be underestimated.

How long can the Wii keep winning, then? The short answer: as long as Nintendo stays on top of its current game (regardless if you like their offering or not) and Microsoft or Sony don’t start selling a comparable substitute.

Granted, external factors such as third-party games and the public’s growing interest in high-definition televisions are sure to play an important role, but Nintendo appears to have the first issue in the bag, and the second one may not be that far behind.

Original story

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August 18, 2007 - Posted by | video games

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