Nintendo's Wii Console: A Dark Horse in the Next-Generation Game Console War

Strategic Insights -

Nintendo's upcoming Wii console is gaining attention as a strong contender in the next-generation game console war, analysts say. The console, announced this week at the Electronic Entertainment Expo in Los Angeles, is expected to detail its strategy for Wii and how it plans to compete with rivals Microsoft and Sony. Nintendo's approach has been to focus on making a system that's easy to use and more fun for families to play, rather than pushing cutting-edge technology.

Key Takeaways:

  • Nintendo's Wii console uses a new controller that can detect its relative orientation in 3-D space, allowing players to swing the wandlike remote control like a sword or point it like a gun.
  • Wii can download and play just about every game Nintendo has put out for its past systems, signaling a shift to digital distribution of games.
  • Analysts expect Nintendo's Wii to be priced at less than $300, potentially at $200 or $250, which could make it a competitive entry in the market.
  • Nintendo has a strong portfolio of in-house game properties, including Super Mario Bros., Zelda, and Donkey Kong, which are family-friendly and can cost between $3 million to $5 million to make.
  • Third-party software publishers such as Activision, Electronic Arts, Take-Two Interactive Software, and THQ will also be showcasing their big game titles for the holiday season at E3.
  • Nintendo's Xbox rival, the PlayStation 3, is expected to cost $500 or more at launch, while Nintendo's Wii will be priced lower, potentially pricing games at $40 or $50 instead of $60.

Statistics:

  • Over 400 companies from 90 countries are expected to exhibit at E3.
  • Nearly 1,000 never-before-seen games and products will be shown off at E3.
  • Microsoft has sold 3.2 million Xbox 360 consoles worldwide, including 1.8 million in North America.
  • The Xbox 360 boasts high-definition graphics and greater online game play.
  • The most popular version of Xbox 360 costs $400.

Sources:

  • [1] "Microsoft, Sony and Nintendo to Unveil Future Plans at E3," Reuters, (no date).
  • [2] "Nintendo Targets Lower-End Market with Wii," CNET News, May 10, 2006.
  • [3] "Sony's PlayStation 3 Plays HD Movies," CNET News, January 4, 2006.