Wii success or failure?

Sunday, May 18th, 2008 @ 4:40 pm | Electronics, Finance, Personal

Despite the massive adoption of the Nintendo Wii and huge fan fare did Nintendo hit a home run or set themselves up for a fall?

Current culmulative sales are as follows:

Nintendo Wii – 19 million

Xbox 360 – 16.8 million

Playstation 3 – 8 million

But what is wrong with the availability, I personally know several people who just can’t buy one. This is a huge problem for Nintendo and a major set back for the stock. The consoles pricing has narrowed huge with Sony and Microsoft both cutting prices for their consoles. Microsoft sells more games per console and has a continuous revenue stream from Xbox Live. It is well known that the major manufacturers take a hit on the actual hardware sale in lieu of a 10% royalty on game sales.

By not being able to meet demand Nintendo has short itself short on the Wii by artificially limiting games sales. Console sales will also slow as news hits the markets about the next generation of consoles based on new hardware. Nintendo bet the farm on Wii’s innovative interface, made money hand over fist but could have made more. The next generation of consoles is going to focus much more on human interfaces and be less about hardware.

Since as long as I have been around the key to console sales was powerful hardware. Nintendo proved that creativity will win and differentiated themselves from their competitors. Sony PS3 sales are improving due to the win by Sony on the bluray format, which is huge disadvantage for Microsoft who bet on HD-DVD. A Sony PS3 at current prices is almost free if you were in the market for a Bluray player from the beginning.

I wonder if Microsoft will ever flex its patent rights on direct human interfaces and bring out something truly groundbreaking.