Nintendo Plays Catch Up in Shifting Gaming World

by Christopher Freeburn | June 4, 2012 10:30 am

Facing pressure from smartphone-based games and entrenched console competitors, Nintendo (PINK:NTDOY[1]) announced that it will launch its own online network[2], called the Miiverse. The new network will rival similar online networks already in place for Sony‘s (NYSE:SNE[3]) Playstation and Microsoft‘s (NASDAQ:MSFT[4]) XBox 360.

Analysts cited by The Telegraph said that Nintendo was coming late to online gaming and would have to struggle to gain a foothold with online gamers. An early showing of the company’s most upcoming Wii U console did not impress investors who see mobile platforms like Apple‘s (NASDAQ:AAPL[5]) iPhone and iPad emerging as competitors to expensive dedicated gaming consoles.

Nintendo will officially unveil[6] the Wii U at Los Angeles’ annual Electronic Entertainment Expo (E3) this week. Previous Nintendo consoles — including the Wii — have sold almost 100 million units, besting consoles from Sony and Microsoft, the Wall Street Journal noted.

However, Nintendo sales have slackened recently and the company recorded a loss last year after its 3DS hand-held console generated lackluster sales. The company expects revenue to drop another 26% in the current fiscal year.

In addition to mobile devices, Nintendo faces competition from social gaming providers like Zynga (NASDAQ:ZNGA[7]), which offers free online gaming.

The Wii U brings a number of upgrades including high-definition graphics, which rivals Microsoft and Sony already offer, and tablet-like controls. The console will likely be priced between $250 and $350.

Endnotes:
  1. NTDOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NTDOY
  2. it will launch its own online network: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/electronics/9310365/Nintendo-to-launch-Miiverse-for-news-games-console.html
  3. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  4. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  5. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  6. will officially unveil: http://online.wsj.com/article/SB10001424052702304821304577440633755327436.html
  7. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA

Source URL: http://investorplace.com/2012/06/nintendo-plays-catch-up-in-shifting-gaming-world/
Short URL: http://invstplc.com/1nL9P0v