Starting this Sunday, the Wii’s price will drop to $199, in response to price cuts by rivals Microsoft and Sony. The Xbox 360 Elite and PS3 prices have both been cut to $299 and Nintendo hopes this latest move will give a boost to Wii sales as we enter this year’s holiday season. Sales of the Wii console in 2009 are down 10% from 2008’s blistering pace and Sony is gaining momentum with their new PS3 pricing.
While the price cuts may help this years sales numbers, it looks as though 2009 will be the first year since 2004 that the gaming industry will see a year-over-year sales decline.
With strong sales of the Wii, DS and top selling software, analysts anticipate Nintendo will post a record operating profit of $5.3 billion (yes, with a “b”) for their fiscal year which just ended on March 31st.
With their competitors reeling (Sony is expected to post record losses), combined with the phenomenal launch of the DSi, which sold an incredible 600,000 in the US and Europe in its first weekend, Nintendo is in a position few other companies can claim: cash rich, sales continuing to rise and a hot new product that will ensure continued success through 2009.
John Davidson over at WhatWePlay.com broke the latest Wii rumor story last week: a Wii 2.0 HD console is in the works.
“High definition visuals are assured, as is a greater emphasis on digitally distributed and backwardly compatible content, indicating that the new system will feature some form of local storage medium such as a hard drive or large flash memory solution. It has also been indicated that Nintendo’s emphasis is again on what the consumer will hold in their hands and interact with, rather than the “console” itself.”
This ain’t no “pretty it up a little and they’ll buy it” approach, either. Nintendo is spending some serious money in research & development.
“Based on figures from Nintendo’s annual financial reports, the company is currently spending more than ten times as much on research and development as it was five years ago, and since the Wii was launched in 2006, R&D spending has more than tripled. While this could be attributed to any number of additional projects, the level of spending suggests that a large project is in the works. In 2003, Nintendo declared that $34 million was spent on R&D. This figure steadily climbed to $103 million in 2006 (the year that the Wii launched) and the following year bumped dramatically to $370 million.”
The 3 way dogfight with Nintendo, Microsoft and Sony will only continue to push R&D spending over the coming years. At this rate, our current consoles will be compared to Pong in 10-15 years…
It’s been heavily rumored that both Microsoft and Sony are looking to create their own Wii Remotes for their systems. It’s an obvious move. The Wii has done incredibly well, so logic dictates that a Wii Remote-like controller for the other systems would do well too, right? So everyone is jumping on the bandwagon and getting motion control. Does this scare Nintendo? Hardly.
In a recent statement to investors, Nintendoâ€™s Satoru Iwata said:
â€œ…what matters to us is whether or not we can continue to constantly create and offer new surprises one after another. If we can, then (other attempts to mimic the Wii Remote) should not be a big threat. The efforts in this field to try to appeal to a wide variety of customers are something in which we saw potential early on and that we have been working on the longest, so there appears to be no reason whatsoever why we need to be concerned.â€
I say this is absolutely true. Of course Iwata fails to mention that these added-on motion controllers for the 360 and PS3 will probably also lackluster since they’ll likely garner little developer support, and will probably fade off into gaming history like so many needless peripherals before them. The reason the Wii Remote works and works soÂ well is that it is Nintendo’s main focus, not a secondary form of control. Developers are forced to work with the innovation, not just encouraged to. There is a difference between committing yourself to an idea and being involved in it. It’s like my rowing coach use to say, “The difference between commitment and involvement can be seen in a breakfast of eggs and bacon. The chicken was involved; the pig was committed.” The point? Motion controls and ideas like the Wii need to be all-in or they’re just going to suck.
Also, it’s a well known fact that the first to the party always does better than the late comers looking for a quick buck. Fashionably late does not apply to the world of gaming.