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Nintendo Marches to Its Own Beat

15 Sep, 2006 By: John Gaudiosi

NEW YORK — Nintendo ships its next-generation console, Wii, on Nov. 19 for $250, which makes it the most affordable of the three systems that will compete for consumer dollars over the next five-plus years. Wii will ship with a pack-in game, Wii Sports, which offers consumers an immediate interactive experience with baseball, golf, bowling, boxing and tennis.

Nintendo will ship 4 million Wiis worldwide this year, with approximately 2 million expected to hit the United States. While the company has officially announced 6 million units will be shipped globally by the end of March, analysts like Wedbush Morgan Securities' Michael Pachter expect real shipments to be as high as 2 million more than that. This marks a contrast to Sony, which recently halved its PS3 launch numbers. PJ McNealy, videogame analyst for American Technology Research, sees no hardware issues forthcoming for Nintendo's launch.

There will be 15 games available at launch and an additional 15 games will ship by year's end. First-party and third-party Wii games will sell for $50 or less, which breaks the trend of $60 next-generation games that Microsoft and Sony are instituting with Xbox 360 and PlayStation 3.

But Nintendo doesn't consider Microsoft and Sony competitors in this new round of the console battle. Wii has been designed from the ground up as a gaming machine. Like GameCube, Wii will not play DVD movies of any kind. Instead, the device is all about games. It will offer backward-compatibility with the 500-plus GameCube games, and through digital distribution, gamers will be able to download old NES, SNES and Nintendo 64 games through Wii's Virtual Console ($5 for NES, $8 for SNES and $10 for N64 games). Wii will hold up to 48 game downloads. There will be 30 downloadable games offered this year, with an additional 10 added to the coffers each month beginning in January. In addition to Nintendo, Sega and Hudson Soft games, Activision is expected to offer classic games in 2007 for Wii's Virtual Console.

Nintendo is offering a more-robust online experience through multiple Wii channels. Gamers can download digital pictures and videos via SD cards and share them with friends online. There will also be news and weather channels, and the ability to purchase and download the Opera Internet service for Web surfing. Players will also be able to play online games beginning in 2007, which will mark the first time a Nintendo console will embrace online gaming.

Another stark contract between Nintendo's new machine and the other two next-gen consoles is that Nintendo president Reggie Fils-Aimes said Wii will be profitable out of the box. Nintendo has bypassed Blu-ray Disc, HD DVD and other expensive components in favor of its innovative motion-sensor controller. This allows the company to make money on every Wii it sells, something neither Sony nor Microsoft can do even at the $300 to $600 price points they're charging.

Billy Pidgeon, video game analyst for IDC, said the company is targeting a broad range of consumers, including the Nintendo faithful, lapsed gamers, families, and new gamers.

Nintendo is currently finalizing its marketing plans for the Wii rollout. Perrin Kaplan, vice president of marketing and corporate affairs at Nintendo, said that getting the new console and controllers into the hands of consumers will be the focal point of the grass roots and viral marketing initiative. In addition to having playable Wii kiosks at retail locations, a strategy Nintendo used to get consumers hooked on Nintendo DS, the company will target a broader demographic through malls and consumer events.

Nintendo will focus on the hardware as well as games like Wii Sports Tennis with its TV campaign, which will target traditional TV shows like “24” as well as broader-reaching programming like “The Amazing Race.”

Perrin said that while many mass market consumers will be attracted to Wii because of its price point and interactivity, gamers will likely pick up the console as a second gaming device for home. She expects gamers to choose either a PS3 or Xbox 360, because of the high price points and similar HD game offerings, and a Wii.

Third-party game companies are all on board for Wii, including Electronic Arts, Buena Vista Games, Ubisoft, Konami, Sega and Codemasters. Activision will deliver five of the 15 launch titles this November. Robin Sue Kaminsky, EVP of publishing for Activision, believes Wii offers new gaming opportunities for both original games and ports of existing franchises.

“PS3 and Xbox 360 focus on fast, HD gaming experiences, while Wii allows consumers to interact with games like Call of Duty 3 in a new way, ducking and dodging bullets as they stand firing at the TV screen,” said Kaminsky.

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