The Beginning Of The Decline For Nintendo?

By Max Brenn
15:47, December 17th 2007
134 votes
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The Beginning Of The Decline For Nintendo?

All we've been hearing since last year is how successful Nintendo Wii is. But is this phenomenal success cannibalizing the profits of the Kyoto-based gaming giant?

Just as many others have underlined until now, Wii has been the most successful console not only in the history of Nintendo, but in the entire history of console gaming itself. Every single month of 2007, except September, when Halo 3 was launched, has seen the Wii crushing its next-gen competitors in terms of sales, appeal to customers and customer satisfaction. The company's stocks soared, boosting Nintendo's market value to more than 82 billion dollars and sending Mario's creators to No.2 in a top of Japan's most valuable firms. But what it totally lacked during this period was a decent retail stock of Wii.

More than once, Nintendo's officials have bragged with their preoccupation for customers' increasing demand, and Reggie Fils-Anime even announced the upgrade of the production facilities to more than 1.8 million Wii units per month. Was that enough? Obviously not. As the days, weeks, months passed, Wii shortages kept accumulating, and this situation eventually led to the frustration of retailers, which have begun calling Nintendo's wonder-product the "biggest disappointment of 2007". Of course, because they don't have any on the stores' shelves.

Now, a senior analyst from MDB Capital Group named James Lin, estimates that Nintendo will lose approximately $1.3 billion this holiday because of Wii shortages. The huge loss will come from lack of hardware on stores' shelves and the games that will remain unsold. "It's staggering," he said. "They could easily sell double what they're selling."

Recently, Nintendo even made the decision to stop advertisements for the Wii because continuing the promotion campaign would've been "irresponsible", considering that retailers have zero stocks. Instead, Nintendo will try to focus customers ' attention to the DS, which is now en route of becoming the best video-game system in 2007.

More than 6 million DS systems have been sold this year only in the US , which means about 1 DS at every 7 seconds.



© 2007 - 2009 - eFluxMedia
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