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Nintendo: Our Business Has Not Peaked
By Kris Graft
January 30, 2009
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"It is not impossible for the Wii's total sales to exceed the final installed base of PS2. Wii still has much more room for expansion."
Kyoto-based Nintendo is riding high; so high that some are now wondering if there's nowhere else to go but down.
Company president Satoru Iwata attempted to allay concerns that Nintendo's growth has peaked, following the firm's decision this week to scale back Wii shipment forecasts and earnings projections for the current fiscal year, which caused shares to slide Friday morning.
He addressed fears that Nintendo's slowing domestic business could be an indication that sales may peak this fiscal year, which ends in March. "I think it is true that new information penetrates through the Japanese market very quickly and that Japanese people tend to get tired of something new very quickly," Iwata stated. "It is also true that the population is smaller when compared with that of other major markets, so it is inevitable that the market starts to feel saturated earlier than others."
Citing previous hardware generations, he noted that the U.S. has twice the sales potential of Japan. Europe, where Nintendo's marketing has improved since the GameCube days, also presents growth opportunities.
"It is not impossible for the Wii's total sales to exceed the final installed base of PS2. Wii still has much more room for expansion," he said.
Nintendo is taking steps to counter slowing Japanese DS sales. In November, the company introduced the DSi, which added more media functionality to the handheld. "We were able to reactivate the Japanese DS market," Iwata noted. The device is expected to release later this year in the West.
Iwata also claimed that many people who are concerned with sales slowdown are using past five-year hardware cycle theories that aren't as applicable to Nintendo's current hardware. For instance, the DS just saw its fifth holiday season and continues to top sales charts.
"I don't think any hardware can enjoy eternal life," Iwata conceded. "Someday, we'll need a new platform for sure, and of course, Nintendo is always preparing for that. However, now that our customer base has expanded this drastically, we do not think it's appropriate to conclude that past platform lifecycle theory can or should be applied to the current generation."
Nintendo said this week that as of December 2008, the company has sold 45 million Wiis and 96 million DS handhelds.
Iwata also said he expects Nintendo to sell more software in the next fiscal year than the current year. "With what kind of software is Nintendo going to achieve this goal? Well, it will be shown at E3 to be held in the U.S. this June."
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Gamers forget that the PS2 is still selling worldwide. For the Wii to surpass the PS2's 140m (and counting) units, the Wii will need to sell at it's current rate for the next three years. A massive task to say the least.
That won't happen because sales of the Wii are dropping, plus by the time 2010 comes around, Nintendo will already have the Wii-HD out and that system will be a different entity altogether, therefore Nintendo will seize Wii production, just like they did with the Gamecube before and the original DS before the DSL.
As much as i love the Wii, the games on that console will never surpass that of the PS2's (in terms of quality) because the system is far too casual, even more so than the PS2.
Most of the developers that create games on the Wii are chasing the big-coin with below par software. Hence, top-class games, games for gamers (not average joe or granny gray) will be far and few between, sadly.
Of course, if it *did* peak, they wouldn't admit it, nor would any company. Also, if they *have* peaked, well, that's a pretty high peak already!
"It is not impossible for the Wii's total sales to exceed the final installed base of PS2. Wii still has much more room for expansion."
Imagine the meltdown that will produce. I cringe just thinkin' about it...
Unfortunately Wii's library doesn't even come close to PS2's in it's prime. Nintendo can brag about hardware all they want, we know who wins in the end.
That really doesn't matter though. Total hardware sales is the sole metric by which the "winner" will be determined - no matter how you, me, or anyone feels about the Wii or PS2's library.
Besides, you should compare the Wii's library to the PS2's after the Wii has been out for more than 2 years. It's not really fair to do that now.
You have to admire their pluck; they could have rolled out a super system to compete with the other two. But have chosen to keep it subtle and understated. All credit to Nintendo, it's been a bumper few years for both Wii and DS.
Even at the early stage it has attained cult status, which I think is going to live on longer than anyone realises. The level of interactivity that Nintendo have brought to gaming is a huge leap forward.
And to that end, I wonder what the Nintendo will bring to the party next generation. VR goggles and gloves maybe, full immersive game play perhaps ? But regardless of my outlandish speculation one things thing for certain... We’ve not heard the last of those crazy Japanese dudes at Nintendo!!
What? The Wii is also hanging its hat on the 10 year cycle rack???
Na, I think going by Nintendo's handhled strategy over the last ten years, they've released a new handheld even when the previous was still hot (the DS was released when the advance was still selling a ton and a lot of people criticised them for that but it worked out). He even said that any console will eventually slow down and will need a new platform that they will be ready for. They will most likely release an updated Wii like the Gameboy Advance SP over the regular GBA, or when they updated the DS to the DS lite, then to the DSi. Just my thoughts.