Nintendo President Puzzled By Stock Slide

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.