Super Mario Walloping Sony, Microsoft, exec says
Speaking at the annual Interactive Entertainment Conference sponsored by BMO Capital Markets in New York Cty, Reginald Fils Aime, president of Nintendo of America, said the makers of the PlayStation and the Xbox video game consoles will have difficulty extricating themselves from their focus on expensive, high-definition machines.
“They’ve gone down the path with very expensive machines where they lose money on every console sold,” he said. “They have a significant strategic conundrum and one that won’t be easy to resolve.”
In October, Nintendo reported its profits more than doubled to $1.16 billion for the six months ended September 30 on the strength of its Wii console and Nintendo DS handheld. The Tokyo-based maker of the Super Mario video game series raised estimated shipments of Wii hardware for the full fiscal year from 16.5 million to 17.5 million and Nintendo DS hardware from 26 million to 28 million.
Nintendo, until recently a laggard in the console wars, has embarked on a campaign to extend the market for video games beyond the hard-core 15- to 29-year-old male demographic, Mr. Fils Aime said. The company has accomplished that by offering new DS titles beyond the shoot-‘em-up genre like Brain Age 2, designed to help Baby Boomers maintain their mental acuity. New titles will help users learn French, raise their babies, and find recipes, he added.
Meanwhile the Wii console, launched last year, will have more than 140 software titles at year’s end, “the fastest software build of this generation,” he added. While the Wii’s graphics lack the definition of the latest Xbox and PlayStation, its motion-sensitive controllers let users swing them to play video game versions of tennis, baseball, and golf. In spring 2008, Nintendo plans to roll out Wii Fit, a suite of programs that utilize a pressure-sensitive balance board to do yoga, dance moves, and exercise routines.
“Others have chosen to drive immersion by incrementally increasing graphic resolution,” he said. “We’ve focused on the tactile—how you interact with the game.”
To gain ground on the top-selling Wii, which retails for $250 in the United States, Sony and Microsoft have been cutting prices on their consoles. Last month, Sony dropped the price of the PlayStation 3 with an 80 gigabyte drive to $499 from $599. The Xbox 360, meanwhile, costs $350.
In a conference call after its earnings release, Nintendo President Satoru Iwata said the company is not contemplating matching the price cuts of Sony and possible reductions by Microsoft. “Luckily, we are now concentrating instead on providing enough supply to meet strong demand,” he said.
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