Nintendo’s Wii U console, built with television and other features meant to appeal to Mom and Dad, will first attract their game-playing kids with exclusive titles, the president of the company’s U.S. unit said.
“It’s Mario, it’s Zelda, it’s great first-party content that’s our secret weapon,” Nintendo of America President Reggie Fils-Aime said today in an interview at Bloomberg’s New York headquarters. “The fact that it doesn’t exist on your tablet, the fact that it doesn’t exist on your smartphone, is going to drive consumers to enjoy our products on our devices.”
Nintendo, the world’s biggest video-game machine maker, is trying to prove $350 hardware and $60 games are must-haves this holiday, even as casual players drift toward free titles played on smartphones and social-networking sites like Facebook Inc. (FB)’s. When the original Wii arrived in 2006, Apple Inc. (AAPL)’s iPhone wasn’t yet on the market, “Angry Birds” didn’t exist and social-gaming company Zynga Inc. (ZNGA) hadn’t been founded.
The Osaka, Japan-based company needs a hit to reverse its losses. Lackluster demand for Nintendo’s handheld game console, the 3DS, which can display images in 3-D, coupled with a stronger yen that eroded overseas earnings, led to Nintendo posting both a net loss and an operating loss in the year ended March 31 -- the first time that’s happened since the company went public in 1962.
Nintendo’s strategy is two-fold, according to Fils-Aime. First, great titles, including some that others don’t have. Second, add features such as TV that will help make the console, with its tablet-like controller, a central part of the living- room experience.
“There’s a lot there for parents to get excited about, but the message is that this is a gaming console,” Fils-Aime said. “Whether you have physical platform or an electronic one, without the content, you’re dead.”
The Wii U will go on sale on Nov. 18 in the U.S. with new games “Super Mario Bros. U” and “Nintendo Land” that won’t be found elsewhere, Nintendo said this week.
There’s something for teens too. The machine adds high- definition graphics and offers innovative ways to play using a touch-pad controller, giving the Wii the potential to also appeal to traditional gamers.
In the past, Activision Blizzard (ATVI), Electronic Arts (EA) and other core-game developers have focused on games for Sony Corp. (6758)’s PlayStation 3 and Microsoft Corp. (MSFT)’s Xbox 360 because of the Wii’s limitations.
Activision, based in Santa Monica, California, said yesterday it will sell a Wii U version of its upcoming “Call of Duty: Black Ops II” that has features unique to the console and its GamePad controller with a 6.2-inch diagonal widescreen. Ubisoft Entertainment (UBI)’s “ZombiesU” horror-shooter game also will be exclusive to the console.
Most of the 50 games Nintendo said would be available by March will be in stores before Christmas, Fils-Aime said. The company projects it will sell 10 million Wii U and older Wii consoles in its first financial year. Fils-Aime declined to break out Wii U projections.
Nintendo has about 7 million fans worldwide who are likely to buy a new console, analyst Michael Pachter at Wedbush Securities in Los Angeles, estimates. The company could sell 10 million Wii U consoles in its first 14 months, or about half what it sold in the same period for the Wii, Michael Olson, an analyst with Piper Jaffray (PJC), said in a research note.
“We remain cautious on the sell-through potential for the Wii U due to a soft economy, unprecedented competition and what we view as a disappointing clunky form factor, user interface and operating system,” Olson wrote.
Nintendo will begin selling the Wii U in North America three weeks ahead of Japan, because the competitive holiday shopping period kicks off in the U.S. with Black Friday after Thanksgiving, Fils-Aime said.
The basic unit with eight gigabytes of storage will sell for $300. A deluxe version will cost $350 and come bundled with 32 gigabytes of memory, “Nintendo Land,” a game bundle featuring iconic characters, a charger for the GamePad controller and other accessories.
“Are we an anachronism? No way,” Fils-Aime said. “By creating software and marrying it to strong hardware, we believe we create groundbreaking experiences.”
Nintendo hasn’t ruled out paying developers for exclusive content, Fils-Aime said. The company also plans to set up kiosks in malls and stores to let consumers get their hands on the device.
The company is trying to duplicate the buzz that made the older Wii a must-have holiday 2006 stocking-stuffer, Tony Bartel, president of Grapevine, Texas-based retailer GameStop, said in an interview.
“When people experience Wii U, that’s where the excitement starts,” Bartel said.
Nintendo also has considered creating subscription-based services for some of its content, though it would not follow the model of Microsoft’s popular Xbox Live subscription, which requires people to pay $60 annually for premium content, Fils- Aime said. He declined to elaborate.
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