Wednesday, April 25, 2007

Sony, Microsoft - All your base are belong to Wii

CNN Money reports: [edited]

A year ago it looked like game over for Nintendo's console business. The Kyoto-based gamemaker - whose Nintendo Entertainment System ushered in the modern age of videogames - was bleeding market share to newer, more powerful systems from Sony and Microsoft.

Even as the videogame business grew into a $30 billion global industry, Nintendo saw its U.S. hardware sales shrink to almost half of what they had been nearly 20 years earlier.

Today, as anybody within shouting distance of a teenager knows, Nintendo is the comeback kid of the gaming world. Instead of joining Sony and Microsoft in the arms race to pack their consoles with ever-higher-performance graphics chips (to better attract sophisticated gamers), Nintendo built the Wii - a cuddly, low-priced, motion-controlled machine that broke the market wide open by appealing to everyone from grade-schoolers to grandmas.

Unorthodox? Maybe. Effective? You bet.

The Wii is a pop culture smash of such dimensions that Nintendo still can't make consoles fast enough. Even so, it's outselling Sony's PlayStation 3 and Microsoft's Xbox 360. And while its competitors lose money on every console they build, expecting to make it back selling high-margin games, the Wii was designed to sell for a profit from the get-go...

[The rest of the article is a good analysis of how/why Nintendo has succeeded. ed]

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