Nintendo Stock Price Slumps, AMD Claims Wii U Design Win

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News Posted: Wed, Jun 8 2011 8:40 PM
ATI designed the original Wii's 'Hollywood' GPU and is handling the next-generation Wii U's graphics processor as well. AMD made its own announcement in the wake of the Wii U's debut yesterday, claiming that the custom Radeon HD GPU will enable "high-definition graphics support; rich multimedia acceleration and playback; and multiple display support."

We suspect the new chip's 'multiple display support' refers to the new controller's 6.2" display rather than any multi-screen co-op gaming experiences. It makes sense for Nintendo to go this route--the less work that happens on the controller, the longer its battery life will be.

The move to a "Radeon HD" GPU sheds some light on what we can expect from the console's GPU. Hollywood was reportedly based on the Flipper graphics processor used by the Nintendo Gamecube. Both chips are fixed-function products (the R600-derived chip at the heart of the XBox 360 is programmable).

Calling the Wii U's GPU a customized Radeon HD part strongly implies that the next-generation chip will significantly more powerful than the Wii's current solution. How this impacts game development and overall preformance remains to be seen. Nintendo could opt to keep the new chip's clock low in order to guarantee silent running and low power consumption. Historically, the company has chosen to maintain profitable margins and small systems rather than pushing existing technology to its maximum potential.

Investors React

In other news, investors weren't pleased with Nintendo's Wii U unveiling; the stock closed down more than five percent today. Shuji Hosoi, an analyst with Daiwa Securities, said that the decline was due to uncertainty in how Nintendo would compete with the tablet/smartphone gaming market. "People are puzzled whether this will really sell. it would be extremely difficult because the competition is so intense," he said, referring to products such as the iPad from Apple Inc. and other rivals. "People have already changed."

If this sounds like deja vu, it's because we heard the same concerns voiced five years ago. Investors then were worried that Nintendo was betting the farm on a gimmicky motion-controller concept that would alienate core gamers who wanted more than cute sprites and retreads of classic titles.

Gaming on smartphones and tablets may be red-hot for the moment, but there's no scientific proof that trends in these two markets are siphoning game purchases elsewhere. The most popular mobile games are titles that can be played for a few minutes at a time; there's no evidence that a customer who buys Angry Birds is thus less likely to purchase the next Final Fantasy.

If nothing else, the Wii U has gotten people talking about gameplay and design, just as the Wii did years ago. There's no reason to think the new tablet controllers are more gimmicky than the motion controllers of the past five years; Nintendo has ridden that gimmick all the way to the bank.
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"I'm all in for the new Wii U, the tablet based controller gaming brought E3 to its knees and you can safely say Nintendo took top honors in terms of attention and wowness. While stocks might have fell a bit , it is no concern, Nintendo has been solid for how many years now? They alway revolutionize gaming, this is no different."


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AKwyn replied on Wed, Jun 8 2011 9:20 PM

You and a few people may like it but then again, not every person in the world shares your opinion. Sure, the world might of changed in terms of consoles but then again, hardcore gamers never change.

We'll just have to wait and see how it goes.


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LBowen replied on Wed, Jun 8 2011 9:29 PM

I enjoy mobile gaming and all but PC/console gaming will always be #1 in my book. The CEO of Angry Birds said console gaming is on its way out to be replaced social and mobile gaming. Nintendo is one of the gaming greats and even if this design fails I can't see them just dropping out of the business so easily.

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The nicest thing is that existing Wii games are compatible with the console so they already have a existing library of games that people can buy from. This is especially important for people that do not already own a Wii. It also sounds like the tablet controller will not be required to play most games but merely will enhance it. Or as Ed pointed out save marriages by freeing up the TV :)

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Nintendo knocked it out of the park with the Wii.

I put nothing past them anymore. This next device should sell well, as Nintendo is not afraid to push the envelope.

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Joel H replied on Thu, Jun 9 2011 3:10 PM

I'd be less confident in the Wii U if Nintendo hadn't already spent years developing games that utilized two displays. There will always be games that take poor advantage of the DS or the existing Wii motion controller; I daresay there'll be games that use the tablet controller's second display badly as well.

With that said, Nintendo was able to deliver sufficiently good Wii titles to turn the console into a smash hit. There's no inherent reason to think they can't do the same thing with the Wii U as well.

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