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Analyst: All of Nintendo’s Fortunes Tied to Wii U

25 Jul, 2012 By: Chris Tribbey

Just months before it’s released, the success of the Wii U will determine the future of Nintendo, according to Michael Pachter, analyst with Wedbush Securities in Los Angeles, and with little details released thus far, the long-term success of the console is murky.

“Although we continue to believe that Wii U has the potential to replace declining sales of the Wii at higher price points, it is uncertain how the device will be positioned versus the competition, so we are unprepared to model that it can drive positive [year-over-year] unit sales growth in [2013],” he wrote in a note to investors.

Nintendo is releasing its new console before Sony Computer Entertainment or Microsoft can release their next-generation consoles, but with no technical specifications, release dates or pricing, it’s hard to gauge whether the Wii U will be half the hit its predecessor was, Pachter wrote.

Meanwhile, sales of the handheld Nintendo DS will decline faster than anticipated, Pachter predicted, and sales of the handheld 3DS will not grow as fast as expected “as casual gamers become comfortable with more affordable gaming on smartphones and tablets.”

“The Wii and DS have lost momentum, and sales of the 3DS are unlikely to fill the gap,” Pachter wrote. “It is clear that a large portion of the Wii audience is slowly shifting to either HD consoles or to social games, while it is equally clear that mobile game sales are cannibalizing handheld game sales. We think that Nintendo’s hardware and software sales will continue to decline until it launches the Wii U.”

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