Analyst: DS and Wii success bad for the market. (Say what?)
The success of Nintendo will be bad for the video games industry; at least according to Kaufman Bros LP analyst Todd Mitchell. Before loyal Nintendo supporters take umbrage on this statement, we should go over the data presented by Mitchell and consider what he is saying.
Most analysts agree that the fourth quarter sales of Nintendo was really strong. They have made this declaration because Nintendo has sold 23.56 million DS units and 5.84 million Wiis for the 2007 fiscal year. In addition to this, 123.55 million copies of DS games and 28.84 million copies of Wii games have also been sold. These numbers have eclipsed the original expectations by a large amount. The only product that didn’t hit the mark was the Wii which was expected to sell six million units.
So why is this bad? The success of both consoles may not be a “positive dynamic” for the major video game publishers. Since Nintendo has stimulated market growth and re-segmented it in its own favor, publishers are left with only a smaller market share as compared to Nintendo. Case in point: the author’s company believes that only Super Mario Galaxy and Metroid Prime 3: Corruption will “highlight this phenomena this holiday season”. In addition, the “likely shorter product cycles of Nintendo’s platforms” will have major publisher having a hard time catching up.
Now they have made some valid points, but it’s all speculation based on the current market numbers. We’ll have to see in the coming months whether or not it holds true.
Via CapMarkets.com
The success of Nintendo will be bad for the video games industry; at least according to Kaufman Bros LP analyst Todd Mitchell. Before loyal Nintendo supporters take umbrage on this statement, we should go over the data presented by Mitchell and consider what he is saying.
Most analysts agree that the fourth quarter sales of Nintendo was really strong. They have made this declaration because Nintendo has sold 23.56 million DS units and 5.84 million Wiis for the 2007 fiscal year. In addition to this, 123.55 million copies of DS games and 28.84 million copies of Wii games have also been sold. These numbers have eclipsed the original expectations by a large amount. The only product that didn’t hit the mark was the Wii which was expected to sell six million units.
So why is this bad? The success of both consoles may not be a “positive dynamic” for the major video game publishers. Since Nintendo has stimulated market growth and re-segmented it in its own favor, publishers are left with only a smaller market share as compared to Nintendo. Case in point: the author’s company believes that only Super Mario Galaxy and Metroid Prime 3: Corruption will “highlight this phenomena this holiday season”. In addition, the “likely shorter product cycles of Nintendo’s platforms” will have major publisher having a hard time catching up.
Now they have made some valid points, but it’s all speculation based on the current market numbers. We’ll have to see in the coming months whether or not it holds true.
Via CapMarkets.com
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