Survey Questions Nature of Demand For new Nintendo Console

Nintendo's next-generation Wii console is expected to be one of the biggest unveils at E3 this year, but data from Nielsen suggests gamers aren't especially eager for the new system. The organization's poll data shows that while 27 percent of those polled are interested in a new Nintendo, 25 percent and 24 percent would also be interested in new systems from Microsoft and Sony.

"Gamers interested in next-generation consoles" isn't the sort of headline that wins Pulitzer prizes, but Nielsen doesn't stop there. The organization's data suggest that the Wii's user base continues to resist attempts to analyze it strictly in terms of traditional console demographics, writing: "The sheer size and diversity of this audience speaks to the opportunity and challenge for Nintendo in converting Wii gamers to a new platform."

The vague references to 'opportunity and challenges' is analystspeak for "We aren't sure what to expect." Nielsen can get way with saying so because no one else knows either, present company included. The Wii, which turns five in November, was supposed to prove that Nintendo didn't understand the grown-up needs of the audience whose childhood it had so thoroughly dominated.

Nielsen's upgrade interest rates among gamers who own more than one console. While it demonstrates a greater amount of interest for Sony and Microsoft's offerings respectfully, the gap isn't large enough to predict huge changes in console uptake trends.

With the Wii, Nintendo bet that gamers would love swinging a short stick around so much, they'd overlook the console's near-complete dearth of seventh-generation features. It won, big time. Part of the console's success, as Nielsen alludes, is precisely that it tapped demographics that its competitors didn't capture. Whatever Nintendo unveils at E3 this week, you can expect it'll be weighed against the question of whether or not the Wii 2 is good enough to persuade that non-standard demographic to upgrade.

We suspect the next-gen console will incrementally upgrade the Wii's current processing and graphics power. This translates into HD video support, some form of internal storage, and possibly an integrated wireless modem. Backwards compatibility shouldn't be an issue--manufacturing technology has advanced to the point that Nintendo could squeeze significantly more performance out of the Wii's existing Broadway CPU and Hollywood GPU by increasing their clockspeeds and expanding the original designs.

Whether the upgrade is judged incremental or significant will likely have less to do with the system's bullet point specifications and more to do with its control mechanisms. Here, Nintendo is playing from a strong position. The Wii has been out long enough that the company can expect solid upgrade numbers even if the Wii 2 offers incremental upgrades to HD video and internal storage. Anything past that--including new control interfaces--is strictly icing on the cake.