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Business Week: Nintendo's Wii May Trump PlayStation 3

A <a href=http://www.businessweek.com/globalbiz/content/jul2006/gb20060727_018869.htm?chan=tc&chan=technology_technology+index+page_more+of+today's+top+stories">new repor...

Jason Dobson, Blogger

July 27, 2006

3 Min Read

A new report from the online edition of Business Week has highlighted the coming battle for consumer dollars between Sony and Nintendo following each company's next-generation console offering to be released this fall. In particular, the report noted that while the PlayStation 2 still maintains control over the current console market, Nintendo could build upon the runaway success of its DS handheld with the Wii in its attempt to usurp the throne from Sony and its significantly higher priced PlayStation 3. Earlier this week Nintendo announced Japanese hardware sales of 2,340,000 units of both the original Nintendo DS and new DS Lite in the last three months, as well as 1,420,000 in Europe and 780,000 in North America. In addition, the company released equally impressive lifetime sales numbers as well for both iterations of the handheld, which put it at 9,240,000 in Japan, 6,130,000 in Europe and 5,900,000 in North America. This adds up to a worldwide title of 21,270,000 units after around a year and a half on sale. Another factor noted in the report which could play to Nintendo's advantage during the next hardware cycle is its emphasis on games aimed at a wider audience than that of its competitors in Sony and Microsoft. The company's recently launched Touch Generations label, which is used worldwide to differentiate its particularly 'mainstream'-oriented titles such as those in the Brain Training series, has seen phenomenal success by offering different types of experiences that cannot be had on other platforms, including Sony's PSP. According to information released earlier this month by Japanese firm Enterbrain, Brain Training For Adults was ranked as the overall top-selling title in Japan for the first half of 2006. "Non-gamers are coming back because there are interesting games people want to play," commented Hiroshi Kamide, an analyst at KBC Securities in Tokyo. "The PSP is a beautiful piece of kit but the games are just rehashes of what you would play on the console." However, the Business Week report was quick to point out that it remains to be seen if Nintendo can replicate the success that it has enjoyed within the handheld market with is upcoming Wii platform. The company has struggled in the sector with its current console offering, and noted this week that hardware sales for the GameCube during the three months ended June 30th, 2006 amounted to only 10,000 units in Japan, while Europe and North America saw sales of 40,000 and 100,000 units respectively. Additionally, the report also noted that hardcore gamers are still more likely to prefer the “raw power” afforded by the PlayStation 3, and that some analysts are still not convinced that the Wii be able to trump the PlayStation 3 once both consoles are released to the public. Yuta Sakurai, an analyst at Nomura Securities in Tokyo, commented in a note to clients on July 25 that he foresees the PlayStation 3 selling through 71 million units by 2011, as compared to the Wii's 40 million. However, the analyst did note the appeal of the Wii, as well as other hardware offering from Nintendo by stating, "Software developers are increasingly interested in creating games for these Nintendo platforms."

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