Product shortages, recalls, and long lines at retailers may hurt game console sales, but holiday purchases of accessories are booming
During a holiday season when two of the hottest game consoles—the Nintendo Wii and Sony Playstation 3—are sparsely available, sales of game accessories have been racing along like a souped-up car right out of Need For Speed.
In November, U.S. sales of game console accessories such as controllers, cameras, and external drives, were up a peppy 19% to $158 million from $133 million during the same period last year, according to market researcher NPD Group. Nintendo led the add-on category, selling 270,000 Wii Remotes, the best-selling game accessory, and 153,000 Wii Nunchuck controllers, the fourth best-seller.
The $39.99 Wii Remote is a hit this season because it's the first controller with wireless, motion-sensing technology built in. Gamers control the action on the screen by swinging their arms and moving their bodies (see BusinessWeek.com, 11/16/06, "The Big Ideas Behind Nintendo's Wii"). In Wii Sports for example, the game which comes with every new Wii machine, players mimic real sports actions such as throwing a bowling ball or swinging a tennis racket with the controller in hand.
Even reports that the thin plastic strap which attaches a safety wrist-band to the Wii controller breaks easily, resulting in smashed TV sets, game controllers, and windows, and even minor personal injuries, hasn't slowed add-on sales. Nintendo says it would ship replacement straps to all Wii owners who fill out an online form or call a toll-free number.
Indeed, the Wii Remote has opened the door for a host of companies who now want to improve upon it. Third-party peripheral makers have discovered that by cradling the wireless controller in the shell of a tennis racket, steering wheel, or golf club, for example, you create an entirely new gameplay experience without the cost of a new controller. British company Joytech, for example, offers a $29.99 Sports Pack which complements the Wii Sports game. The Wii Remote simply snaps into scaled-down, plastic versions of a golf club, a tennis racket, and a steering wheel, to simulate the feel of actual sports equipment.
While Nintendo's initial showing in the console and accessories market has exceeded expectations, rivals Microsoft (MSFT) and Sony (SNE) are still firmly entrenched in the world of gaming. Microsoft's Xbox 360 console, now over a year old, sold about 100,000 more units than Nintendo's Wii in November, according to reports. The Xbox 360's $39.99 wireless controller was second behind the Wii Remote in accessory sales, at 251,000 units.
Sony's $49.99 SIXAXIS controller for the Playstation 3 is equipped with wireless Bluetooth technology which, like the Wii remote, can sense physical movements in real time—though the motion sensors are not as sophisticated as Nintendo's. In November, the SIXAXIS was the seventh-best selling game accessory at 98,000.
Other popular game accessories in November were Nintendo's $29.99 NDS Lite Start Kit, with sales of 154,000, and Sony's $24.99 PS2 Memory Card, at 152,000.