RSSUS: HD Systems Losing Still More Ground to the Wii
02/12/09
US
- The Wii has now surpassed all gains that the HD Console market made
before the tiny-white-system-that-could went on sale. Combined, the
XBOX 360 and the Playstation 3 have a 3.01 million system lead on the
Wii--a little less than what they started with when the Wii launched.The HD systems (referenced by the intelligentsia of gamderdom as "Next Gen") looked to be gaining momentum against the onslaught of Nintendo's mass-audience appeal, and at one point had a 5.4 million system lead on the Wii.
Now, that lead is disappearing just as quickly as copies of Wii Fit are moving off the shelf. Why is such a nebulous number important? Because analysts, including this one, have suggested that perhaps the combined numbers of HD system sales were keeping 3rd parties from making serious games for the Wii.
That argument barely holds water at this point. The HD-to-Wii ratio has been dropping nearly every month for the past year and still the Wii looks to be the stepsister of western-focused genres. The current and probably most accurate statement at this time is that 3rd parties have whole-heartedly dismissed the Wii as an "outside the hardcore" demographic and are treating it accordingly.
This latest news, though, might begin the turnaround of that perception. The Wii continues to sell despite the down economy, generally something one would expect for systems with a harder-core following. Japanese companies are committing to it, including titles like Madworld, Monster Hunter, and Dragon Quest X (a little further off).
Perhaps that will change in the west as well. EA has supposedly started to focus its energies on the Wii platform despite the majority of its catalog selling millions of copies on the 360 and PS3 (see: Madden, Burnout, etc). Maybe by focus, they mean, "make quality games for it." That would be an interesting change from the what many 3rd parties have done so far.
(click to enlarge)
In the December quarter alone, Microsoft made a massive $4.2 billion in
profits, that is approx twice what Nintendo is gonna make for the
entire year, going by their own profits predictions. And Microsoft has
a massive over $20 billion in cash in the bank right now.
And while Microsoft's profits were down 11% in that quarter, Nintendo's profits in the same December quarter were down even more, at 46%.
If Microsoft were to make a price cut of $100 on the 360, and sell the same 10 million units they sold last year, their annual profits wil be down $1 billion, but they'd still be making over $15 billion in profits per year.
On the other hand, if Nintendo made a similar $100 price cut on the Wii, and sold the same over 20 million units they sold last year, their entire annual profits would be near wiped out.
That would decimate their share price, which is already down over 55% in the last year alone{http://www.bloomberg.com/apps/quote?ticker=7974%3AJO}
Remmember, even when Microsoft was making big losses on the XBOX1, they still managed to make record profits in the billions every quarter for Microsoft as a whole.
Of course whether Microsoft or Ninetndo would go about cutting prices in that fashion, and take down their profits and share prices, is another matter altogether.
And while Microsoft's profits were down 11% in that quarter, Nintendo's profits in the same December quarter were down even more, at 46%.
If Microsoft were to make a price cut of $100 on the 360, and sell the same 10 million units they sold last year, their annual profits wil be down $1 billion, but they'd still be making over $15 billion in profits per year.
On the other hand, if Nintendo made a similar $100 price cut on the Wii, and sold the same over 20 million units they sold last year, their entire annual profits would be near wiped out.
That would decimate their share price, which is already down over 55% in the last year alone{http://www.bloomberg.com/apps/quote?ticker=7974%3AJO}
Remmember, even when Microsoft was making big losses on the XBOX1, they still managed to make record profits in the billions every quarter for Microsoft as a whole.
Of course whether Microsoft or Ninetndo would go about cutting prices in that fashion, and take down their profits and share prices, is another matter altogether.
