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Nintendo President Puzzled By Stock Slide

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News Posted: Fri, Jun 10 2011 3:03 PM
The stock slump that followed Nintendo's Wii U announcement shows no signs of abating; the company's share price is down more than ten percent as of this writing. Nintendo president Satoru Iwata has expressed surprise over the reaction.

"Honestly speaking, the reaction to (Tuesday's) presentation and what I heard from people I met and the mood of the convention did not chime at all with what happened in the stock market," Iwata said in an interview at the E3 games show in Los Angeles on Wednesday. "It's very strange."

Iwata went on to note that the investors' reactions remind him of the uncertainty Nintendo faced after it announced the original Wii back in 2006. "In the end, it is easy to get the mistaken impression that this is just a game console with a tablet," he said. "People who came to the presentation and tried it out have understood very well that it opens up a lot of new possibilities. But people who have not tried it will find it hard to believe that this controller will change things."

The company's investors are reportedly concerned that the Wii U doesn't do enough to close the gap between the hardcore gamers that are seen as favoring MS and Sony. Nintendo's marketing approach may have hurt the company in that respect. Avoiding any discussion of the Wii U's hardware kept focus on the controller, but doing so left investors' with no comparative information.

"At the moment, there is a barrier between the Wii, which is seen as for casual users and the other companies' consoles, which are seen as for core gamers. We are questioning whether that barrier needs to be there," Iwata said.

Hardware 101:

There's a reason we aren't particularly concerned about the Wii U's relative performance. Both the XBox and the PS3 are based on processors and GPUs that were cutting-edge 5-6 years ago. Both companies are on record as stating that they remain focused on developing products for the XBox 360 and PS3 respectively. Nintendo, therefore, is free to launch a new console without having to worry about its two main competitors suddenly launching new systems.

Given how old the XBox/PS3 are, the Wii U could easily outperform its two rivals. Even if Nintendo doesn't aim to do so, the company should have no trouble matching the performance of the XBox 360 and PS3 while simultaneously keeping costs low.

The question of whether or not the Wii U is embraced by hardcore gamers will have little to do with console hardware. It depends instead on whether or not Nintendo wines and dines software developers who currently build their titles around the Sony/Microsoft duopoly. The company probably won't need to try very hard--game developers generally try to release their games for as wide a market as is possible. The Wii U's hardware will be able to support games the Wii previously couldn't.

Investors may be leery of whether or not the Wii U can duplicate the Wii's success, but from a technical standpoint, there shouldn't be any reason why game developers can't deliver the same fidelity for all three systems.
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fefzero replied on Fri, Jun 10 2011 7:00 PM

What I still haven't figured out is how this is supposed to bring more people to gaming - doesn't it seem like a two-screen gaming system would be confusing for a new gamer? Which screen should I look at? OK, now I can play games with the TV off, but how do I do that? Don't get me wrong, I'm pretty excited to see the Wii U, but I don't really see this bringing more people into the gaming fold that weren't there already.

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So if you can afford Nintendos stock now or shortly will be the time to buy it. I have no doubt that Nintendo will be successful with this console especially with the doubts people had about the original Wii.

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AKwyn replied on Fri, Jun 10 2011 8:54 PM

fefzero:
Which screen should I look at? OK, now I can play games with the TV off, but how do I do that?

Pretty simple actually.

Screen 1 = Game.

Screen 2 = Screen that holds the stuff you're holding, map you're playing, etc.

Simple enough right?

 

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pwrntspd replied on Sat, Jun 11 2011 12:12 AM

Dont get me wrong, Nintendo could have something here...but i dont see it. Course some people said the same thing about the Wii. But it seems odd to focus so much on motion control and then go a totally different direction. I can only imagine how much these controllers will cost. In anycase more competition is a good thing, so i wish you the best nintendo, prove us and your investors wrong.

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fefzero replied on Sat, Jun 11 2011 12:15 AM

TaylorKarras:

Simple enough right?

I guess you haven't played video games with my wife. Smile

Seriously, though, I think it could get really confusing. The Wii U is compatible with all of my existing Wii controllers (remotes, nunchucks, classic controllers, balance board, gamecube pads?), plus the new tablet screen controller... does each game have a different control scheme? And can I use multiple tablet controllers?

What I'm saying is that there's still a lot of questions to be answered, even about the controllers.

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Sounds like a buying opportunity to me.

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HHGrrl replied on Sat, Jun 11 2011 3:13 PM

I'm anxious to see the Wii U when it comes out. I'm not sure what to make of it yet, but I'll certainly be paying close attention when it's here and I can actually see it!

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"A few of the things that influence the stock to slide was the fact that Nintendo made an announcement of a new console, which ultimately leads to the current Wii sales to slump. People were thinking of buying a Wii , will now likely hold on till the new version comes out in 2012, and current owners will be hitting Ebay towards selling theirs. Also, this will affect game sales as well in the domino effect. Nintendo can also be credited for the slide directly because of little details giving about the hardware and the no revelation about the media or disc type that will be used for games. It is reported, that the Nintendo Wi U will use 25GB optical disc, though , not Blu Ray, and it will not play Blu- Ray movies, saving cost in licensing.'

-Optimus 

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"It depends instead on whether or not Nintendo wines and dines software developers who currently build their titles around the Sony/Microsoft duopoly." well said Joel. Good point. I would definitely consider getting the Wii U if they offer titles that attract hardcore gamers to the Xbox and Playstation. If Nintendo could somehow do that... and keep releasing family oriented games, then I want me some Nintendo stock. :)

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