The Wii's success may not be as sturdy as Nintendo would have us believe, according to some analysts. They have predicted that the console may start to lose ground to Microsoft and Sony in the face of price cuts and its own limited catalogue.
Pelham Smithers, a London- based analyst with Pali International, said, “This Christmas, Wii will win, but not to the same extent they've been winning. Next year, the playing field will level even more.'' He has marked his advice on Nintendo stock as 'sell'.
Smithers thinks that Sony and Microsoft will announce further price drops as production costs lower, putting pressure on Nintendo.
There is concern from some quarters that Nintendo's stock surge earlier this year may leave little room for growth. Shares have fallen 16% since July 26th, the day after Nintendo posted record earnings. This is partly attributed to concerns that the rising value of the Yen will hurt sales outside Japan.
“The valuation is high”, said Hirotoshi Murakami, an analyst at Mitsubishi UFJ in Tokyo who has a rating of 'underperform' for Nintendo shares. “It's easy to get bored with games like the hit title
Wii Sports after just a few times,” Murakami said. “Whether Nintendo can continue to make games that sell well remains a question.”
Meanwhile, Nintendo has just announced that the
Wii is the fastest-selling home console in UK history, having hit the 1 million sales mark after 38 weeks. The platform also continues to perform well in software sales, with it and the DS dominating the UK Top 10 despite their lack of traditional games.
Is the Wii a fad that will soon be overrun by the 360 and PS3? Answers in the Forum, please.