Wii is profitable - analysts begin to realize it
Friday, July 6th, 2007 at 12:56pm by David
As I preach to the choir here at Infendo, I often forget that a lot of people don’t like Wii or Nintendo. I even forget that publishers and developers were until recently still operating under the assumption that Nintendo was failing in the console category. Apparently developers and publishers are now realizing that Nintendo is back and that their non-portable game system is a big deal. From an article at GameDaily:
Why is Wii so attractive? According to Lazard Capital Markets analyst Colin Sebastian, the answer’s simply in the economics: “Based on the typical front-line retail price for Wii titles, we estimate that publishers need to sell approximately 300,000 units per title to break even. In contrast, we estimate that breakeven units for front-line Xbox 360 and PS3 titles are in the 600,000-unit range, or at least double the Wii’s break even level.”
Not to forget about everyone’s favorite dual-screened portable unit, the article goes on to say:
By the end of Nintendo’s fiscal year in March 2008, Sebastian believes that the Wii will have an installed base of nearly 20 million worldwide. He also thinks that tie ratios on the platform will continue to improve and Nintendo will offer more in the way of DS-Wii connectivity.
It’s hard to argue with numbers, maths, and analysts. (Stop snickering, Jack.) Will this truly be a golden age where both 1st party and 3rd party titles will lift Nintendo to the upper echelons of industry domination and fun games?
[Thanks for the tip, John McG!]
July 6th, 2007 at 1:17 pm
yes.
and i will bet more then 20mil base by the end of 2008, since i expect at least 12-16mil by the end of this year. its all really about how much nintendo chooses to ramp up production by the end of this year. they will keep selling non-stop whatever they push out the door with so many big titles coming by the end of this year, and i am willing to bet alot more next year since they still have many smaller franchises to work with.
July 6th, 2007 at 1:20 pm
Well, I think publishers/developers are a little bit harder to win over than the general public, and it makes sense. “Investing” in a $250 Wii is one thing, but spending millions on making a game hoping it will pay off is an entirely different thing.
July 6th, 2007 at 3:01 pm
I sure do hope so. Nintendo is hitting every nail of the head with this generation, but one thing still concerns me, and this has been a problem with any Nintendo system in the post-N64 days. Most Nintendo gamers only like Nintendo games. If a game isn’t made by Nintendo, the fans just don’t turn out for them. This has been stated before from some industry bigwigs, as well. This generation has been a little different, but it’s still a concern. If the fans can welcome 3rd parties titles like they do with 1st party titles, then Nintendo can come out on top. But it’s gotta start with the fans.
July 6th, 2007 at 3:06 pm
Yay!
I’m happy to see the big ‘N regain its long-lost turf. Now that the analysts are siding with the Wii, it’s time to move in on the fanboys. PS3 fanboys complain that the Wii is a fancy GCN and kiddy for not publishing Manhunt 2 (even though Sony did the same thing). And 360 fanboys complain the Wii’s online is terrible and the Wii is nothing but party games. Of course all of this is either exaggerated or false, but whatever; fanboys will always be fanboys…like…me.
July 6th, 2007 at 3:17 pm
To chronotrigger913:
I think it has to start with the 3rd parties themselves! At first I didn’t care where the Wii games came from, but then it started to be too painfully obvious that 3rd party titles for Wii were not up to the level of even Wii Sports in quality… Looks like the trend is starting to change, but you can’t ask fans to support shoddy titles, or you will only get more of them!
Did I mention that all of these games are $50 each, no matter who made them??
July 6th, 2007 at 3:25 pm
That is true, InvisibleMan. For the Wii, 3rd party titles have been crap. I was mostly referring to all Nintendo consoles in the past. But yes, I don’t expect (and want) people to buy crappy games. We would get 3rd party titles, but for all the wrong reasons.
But I do remember a few titles on the GC that were amazing and highly rated, but no one cared about. Prince of Persia: Sands of Time is one.
July 6th, 2007 at 3:32 pm
Walter: Fiscal years end in March. Twenty mil ftw.
July 6th, 2007 at 4:09 pm
I am very happy to see Nintendo doing so well. Every time I go into a Gamestop store I hear atleast a half dozen people inquire about whether or not they have any Wii’s in stock, and the answer is always “no, we are sold out”. I have also noticed that while I am in the store almost all customers are looking at either DS or Wii games…..a year ago it was not like that. I do see some interest in the Xbox 360, which I think is a great system with great games, they just need to fix the problem of their consoles frying out so quickly. Anyhow, to get back on track…..my one concern with the Wii is whether or not there will be enough mature rated games to satisfy us adults. I can see Nintendo’s stand on family fare being very sound business wise, but I hope they realize that there are adults out there who would like to play adult games after the kiddies go to bed. I have to be honest that I am a little confused on where they stand on this subject. They (as well as Sony) will not allow any AO rated games on their system, but just recently announced that there will be new original games available on the virtual console soon, and that they are taking a hands off approach as to what will be made. They will leave content up to the developer…..isn’t that a little hypocritical considering their stand with AO rated games? This whole subject leads me to another question…..why have an “AO” rating category if the console manufacturers and most big retailers will not carry the product?
July 6th, 2007 at 4:13 pm
So the dominant console, that has lower dev costs, with average game pricing about the same as the others is actually more profitable than the others consoles. No frakin way!
July 6th, 2007 at 7:23 pm
Bah, you’re all idiots. People are going to see through the gimmick any day now, and people are just gonna stop making wii games by september.
July 6th, 2007 at 9:39 pm
I was under the impression that the vast majority of games sell in the low tens of thousands of units, and that a game reaching 300,000 in sales would be an amazing smash hit? All those games can’t be losing money can they?
July 6th, 2007 at 9:43 pm
You must call yourself Sharp for being so smart. Thanks for the tip! I’ll throw it away on october… do you know the exact date, so I don’t go out?
July 6th, 2007 at 11:16 pm
Wii sales are now just 1.28 million behind Xbox360 worldwide!!
so it should take about 8 more weeks for Wii to pass Xbox360 at the current rate, or the end of August..
July 6th, 2007 at 11:38 pm
@Gary,
There’s plenty of games for adults on the Wii right now and more on the way. There just aren’t alot of games where you kill things, or punch hookers, which, as an adult myself, seems more immature than mature. I loved games like GTA when I was a teen but that type of game doesn’t appeal to me anymore.
And, no it’s not hypocritical at all. Most AO games are porn or gambling games and are only available on PC. The devs and publishers all know this. Stores like Wal-mart and Target will not stock an AO game for this reason. So, yes, Nintendo can leave the content up to the devs, and still not permit AO games on their systems. There is no hypocrisy. If you want porno and gambling games, you should stick to the PC.
July 6th, 2007 at 11:50 pm
@ Sharp:
You ignorant fool! Developers go where there is money, they make good games hopping to make a good profit. Gamers go where there are games.
It’s all a vicious cycle, and it’s not going to stop anytime soon.
July 7th, 2007 at 2:14 pm
I just read Sharp’s post… So I threw my Wii away. I hate how right he is!
July 7th, 2007 at 11:30 pm
Sharp is just being sarcastic. Leave him alone.
July 8th, 2007 at 11:30 am
Nintendo themselves estimate 14m Wiis sold by Q1/2008 - and that’s more like it.