Wednesday, January 31, 2007

The Winner is Nintendo Wii

In this New York Times article it is argued that the Nintendo Wii has hit the top spot with gamers overtaking Sony's Playstation.

SAN FRANCISCO, Jan. 30 — Some of the video game industry’s smartest minds thought that couch potatoes wanted richer graphics and more challenging virtual worlds. It turns out that a lot of potatoes simply wanted to get off the couch.

That may be the best explanation for the growing popularity of the Nintendo Wii, the new video game system that has players jumping, punching and swinging, giving them an aerobic workout right in front of their television sets.

The Wii, which uses an innovative wireless controller to translate the players’ motions onto the screen, has upset the order of the video game world. In electronics stores and elsewhere, there are growing signs that the Wii has taken the lead in buzz and sales over another new console, the Sony PlayStation 3, which offers new superlatives in processing power and graphics.

The competitive picture became clearer on Tuesday, when Sony reported disappointing profits that industry analysts attributed largely to the expensive and shaky rollout of the PlayStation 3 and lukewarm demand for the complex machines. By contrast, Nintendo said last week that its own third-quarter sales were up 40 percent from a year earlier, buoyed by Wii sales.

Both consoles were hard to come by during the holiday shopping season. This week, visits to stores in San Francisco, New York, Boston and Austin, Tex., turned up several with PlayStation 3’s in stock, while the Wii was sold out.

The PlayStation, reflecting Sony’s longstanding dominance, seemed destined to be the one that gamers would snap up. But the Wii is winning many converts who are playing games by moving not just their thumbs but the whole complement of limbs.

“You’re up and you’re moving, and it makes you feel more involved,” said Tracy Ciardiello, 28, a stay-at-home mother in Berkeley Springs, W. Va., who bought one of the last Wiis available at a Wal-Mart nearby on Sunday morning. “After an hour, a thing pops on the screen that says, ‘Why not take a rest?’ That just made me laugh.”

The Wii and the PlayStation 3 were both released in November and are competing with the Microsoft Xbox 360, also a more powerful game machine. It is a battle with immense stakes, given that the video game industry generated more than $12 billion in sales last year.

It is too early to declare a winner. Video game industry analysts said one question hanging over the Wii was whether it was a fad, or whether it would end up creating a new generation of more casual game players — or even become a viable alternative to more powerful machines.

But it appears that Nintendo has already created an unexpected three-way contest, while calling into question conventional wisdom that video games are the domain of testosterone-driven gadget freaks who can zone out for hours while conquering computer-generated foes.

“Nintendo came at things sideways — they made stuff that’s silly and fun,” said Jeff Gerstmann, senior editor of GameSpot, a Web site with video game news and reviews. “It has created a new style of gaming.”

Nintendo recently announced that during the holiday quarter, it shipped 3.2 million Wii consoles and sold 17.5 million games. Sony said it shipped 1.84 million PlayStation 3’s in the quarter, and sold 5.2 million copies of game software for the console.

Nintendo might sell more Wiis if it could make and ship more of them. Company officials said they are shipping around a million worldwide every month, half of those to the United States, but retailers say they cannot keep them in stock.

“The last time they were here, we had 40 and they sold out in 15 minutes,” said John Weeks, who works in the electronics department of the Target store at South Bay Center in Boston. The Wii was last in stock there on Sunday and sold out quickly, making the console physically demanding for shoppers as well.

“I heard there were people here at 5 a.m. waiting,” Mr. Weeks said.

Target shoppers in search of a PlayStation 3, however, were in luck. In addition to the handful out on the floor on Tuesday, there were at least 15 PlayStations in back waiting to be sold.

Retailers around the country said that while the PlayStations had been selling well, they were generally remaining on the shelves for a few days or a week.

Helping the Wii is its $249 price, compared with $499 or $599 for the PlayStation 3, depending on the model, and $299 or $399 for the Xbox. The competition seems to be benefiting all three companies by getting consumers interested in a medium that has languished a bit.

Dave Karraker, a spokesman for Sony Computer Entertainment of America, said the Wii did not belong in the same category as the more powerful PlayStation 3. “Wii could be considered an impulse buy more than anything else,” he declared.

Mr. Karraker said Sony was selling out the 100,000 PlayStation 3 units it was shipping into the United States each week, albeit somewhat more slowly than before Christmas. “The frenzy we saw at the holidays has subsided a bit,” he said.

Besides, Mr. Karraker added, Sony thinks the Wii is attracting newcomers, while the PlayStation will be the console of choice for hard-core and committed gamers.

So is the Wii expanding the video game market, or is it stealing customers from Sony and Microsoft?

For Will Brazelton, 23, a student at San Francisco State University, the answer is both. An avid gamer, he said he planned to buy a PlayStation 3 eventually, but he was in a local EB Games store on Monday seeking a Wii. He said the system seemed especially fun. Also, his sister, even though she is not an avid gamer, had agreed to pay half.

Alas, the store had no Wiis, and the manager, Joe Conforti, told Mr. Brazelton that there was not any sure path to getting one.

It is “basically luck,” Mr. Conforti advised. He said the calls were coming in hourly from people interested in a Wii, and that when stock does come in, it lasts only an hour or two.

For some serious gamers, it is not a question of choosing among systems. Robert Davis, 29, a martial-arts instructor who lives in Canarsie, Brooklyn, and owns a PlayStation 3, an Xbox 360 and a Wii, said the Nintendo console was an enjoyable alternative but not a replacement for the more advanced machines. “It’s fun mainly because it’s different, but once that wears off, some people are just couch potatoes,” he said.

Perrin Kaplan, vice president for marketing at Nintendo of America, said the Wii was changing the perception of what kinds of games adults like to play. The console, she said, “has turned it all upside down.”

Ms. Kaplan bristled at Sony’s suggestion that the Wii only appeared to be in higher demand because there had been fewer shipments of it. “That’s absolutely inaccurate,” she said, adding that Nintendo was at least equaling Sony’s shipments.

Still, analysts said the challenges for the Wii included whether Nintendo and third-party developers would produce enough games to keep console owners and prospective buyers happy. GameSpot said developers planned to release some 76 games for the Wii in 2007, compared with 127 for PlayStation 3.

“At the end of the day, Wii is a terrific secondary system for hard-core gamers,” Mr. Gerstmann of Game- Spot said. But he added that many such gamers had not yet embraced PlayStation 3. “They’re waiting for the good games to come out,” he said.

Some gamers echoed that sentiment. “If I get the PlayStation 3, it would be after the price drops and I see what new games come out,” said Alex Chan, 23, a graduate student from Sacramento, who was with some friends at an EB Games store in the CambridgeSide Galleria Mall in Cambridge, Mass. He said he already had a PlayStation 2 and was interested in getting a Wii.

The Ciardiello family, in West Virginia, are converts to Nintendo, having made a transition from the PlayStation 2. Ms. Ciardiello, who has three young children, said her husband did some research about which console to buy. She said he liked the idea of getting started without spending a lot of time reading a manual — and, more fundamentally, being a bit active while they played.

That part, she said, has been borne out. “My husband broke a sweat playing golf on there,” she said.

Katie Zezima contributed reporting from Boston, Cassi Feldman from New York and Bill Kidd from Austin, Tex.

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