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Friday, December 17, 2010

Wii at $99? If Only...

Pressure is growing on Nintendo to do something, anything about the Wii. Nintendo seems incapable of admitting there's even a problem, even though the Xbox 360 outsold the Wii handily in November despite the $100 or more price differential. EA's CEO is complaining publicly about the Wii's price point, practically begging for a $99 Wii. Of course, third-party publishers are less than happy with Nintendo's support, which mostly consists of benign neglect.

Check out the chart from Silicon Alley Insider, showing how the Wii's sales have been tanking this year. Analysts are looking for a price cut, or a Wii 2/Wii HD, or something to ignite sales. Nintendo basically shrugged and said "We're happy making our smallest annual profit in six years." It's nice that they're trying to revive the DS line with the 3DS, but that's not going to do anything for the Wii regardless of how well it sells. A price cut is the obvious move while marking time to a new console; at $99 the Wii should zoom to the top of the charts again, and maybe revive some interest among third-party publishers in doing a Wii title or two.

The longer term problem for Nintendo is what exactly a Wii successor would do. Sure, they could add HD output, and a faster processor... but then all you have is a closer competitor to the 360 and the PS3, without any of their advantages (like a hard drive, a robust online service, advanced motion control...). Nintendo will certainly want to have something different up their sleeve, more than just horsepower. Perhaps the delay in creating a Wii successor means Nintendo is having problems coming up with something they think people will like, at an affordable price, that gives them an edge in game development like motion control once did.

I'd like to see innovation in the business model, with a revolutionary jump in their online store, to outpace their rivals and get ready for the Apple TV onslaught. But given Nintendo's track record, they will be slow to innovate on the way they do business.

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