Nintendo (NTDOY) president Reggie Fils-Aime claimed today that despite an apparent slowdown in sales of the company’s Nintendo Wii video game console, the stock is still on track to outpace competitors Sony (SNE) and Microsoft (MSFT). Nintendo is projecting 18 million in Wii sales for the fiscal year ending March 2011, a decrease from the previous year’s 20.5 million for the video game console.
Fils-Aime looked to assuage possible Nintendo shareholder fears in a post on the company’s Japanese website: “[When] you look at the absolute number of units sold, it is clear that our pace is dramatically better than the other home consoles.”
It’s true that Nintendo’s chief competitors have showed significant momentum in the last twelve months. Microsoft’s Xbox 360 has continued to perform well after five years on the market. Traditionally, a home console’s shelf life is around six years, so the Xbox’s continued health speaks well to of Microsoft’s future in the space. Sony’s Playstation 3 has shown dramatic growth following a realignment of the Playstation brand and the release of a remodeled console at a reduced price last August. Still, Sony and Microsoft’s systems are trailing the Wii by a significant margin. Since its launch in November 2006, the Wii has sold over 70 million untis worldwide, trouncing the Xbox 360’s 40 million lifetime sales as well the Playstation 3’s 35 million lifetime sales.
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At last week’s E3 event, both Sony and Microsoft unveiled new technology to extend the lifecycle of their home gaming machines. Both the Sony Move, a wand-style controller used for motion controlled videogames in the style of Nintendo’s Wii, and the camera-based, hands-free controller the Xbox 360 Kinect have been developed to lure away the family audience Nintendo has captured with the Wii. What remains in question is whether or not consumers will be willing to spend the sizable sums to purchase Sony and Microsoft’s new technology.
Both manufacturers’ consoles, including the newly released, redesigned Xbox 360, are priced at $299. Sony will be selling a Move bundle, including one wand controller, the Playstation Eye camera, and a game, at $99, but additional controllers will cost $50 a piece. Microsoft hasn’t announced a final Kinect price yet, but all indications point to a $149 retail price. These technologies are a sizable investment for a consumer population that is still cautious of spending. In comparison to the value proposition of Nintendo’s current Wii SKU that includes a controller, two games, and a Wii Motion Plus accessory for more accurate controls in addition to the console at $199, Fils-Aime’s claims of steady momentum seem accurate.
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This means continued good times for Nintendo shareholders. Nintendo’s stock soared last week following the announcement of the company’s new handheld gaming device, the Nintendo 3DS. A dual-screened device that includes both touchscreen and motion control technology, the 3DS also features stereoscopic three-dimensional graphic effects that do not require users to wear 3D glasses. Nintendo hasn’t announced pricing or a release date for the 3DS, but promises that the device will release in all major markets by the end of the fiscal year in March 2011.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
