Honestly, right now Nintendo could announce that every Wii console has a one-in-five chance of causing cancer, but that still wouldn't stop the onslaught of rabid Nintendo fan boys and girls from picking up their own console this Nov. 19. While I question their wisdom in launching the Wii a mere two days after Sony's (supposed) PlayStation 3 launch, it does ensure that they will be a major presence come Black Friday, the busiest shopping day of the year, and consequently, this holiday season.
On the other hand, guaranteeing that the U.S. gets the majority of the first-run consoles will go a long way towards improving Nintendo's dismal reputation in the American console market. It has enough clout in Japan to survive a minor shortage there at launch, so it's best that they concentrate on its weakest consumer territories at first. According to www.1up.com, Nintendo aims to ship four million Wii consoles worldwide before the end of 2006, with the U.S. getting most of them.
In terms of production alone, Nintendo is already killing Sony in the future marketplace. Sony recently announced that it has been forced to delay the launch of the PS3 in Europe, Africa and Australia (among other territories) until March 2007. In other words, Sony has delayed the PS3 everywhere in the world that isn't America or Japan.
They expect to ship nearly half of Nintendo's estimates: two million units to the U.S. and Japan by the end of the year, with about 1.1-1.2 million of that batch coming to the U.S. From numbers alone, we can infer that the Wii will end up with the larger install base by 2007.
Nintendo also seems to have picked the perfect price point for both consumers and their own benefit. The $250 price tag is significantly lower than the Xbox 360's at $400 or the PS3's at $600, which will make it a no-brainer purchase to casual gamers and uninformed parents. And while it's $50 more than their traditional launch price, the slightly higher price gives Nintendo a major advantage over their competitors: a console that makes a profit!
Manufacturers traditionally sell new consoles at a loss. This helps to create a larger install base than would be possible if the hardware was unsubsidized. At launch, the Xbox 360 hardware probably cost upwards of $700, and estimates of the PS3 hardware put it close to $1,000. Manufacturers make this gamble hoping to eventually recoup their losses with game purchases and a dedicated user base. Sometimes, however, this doesn't pay off-just look at the $4 billion (!) Microsoft lost with the original Xbox.
It doesn't take a statistician to realize that the numbers are completely in favor of Nintendo at this point. It will be shipping nearly twice as many consoles and actually making a profit off of them as well! Sony will ship a quarter of the amount and will lose hundreds of dollars with each unit sold. It's a recipe for instant success for Nintendo, and one that will certainly help to restock its coffers after completely deserting the Gamecube two years ago.
Nintendo, it seems, is learning from its past mistakes. While it's taken it two last-place consoles to figure this out, it has finally realized that it doesn't have to play into the all-too-typical hardware performance race to have a successful console. Sony, meanwhile, is making pretty much every mistake possible with their upcoming launch. With only a few months left before the PS3 launch, we can only sit back with dropped jaws and stupefied faces: The PlayStation 3, ladies and gentleman, is a shipwreck in progress.
E-mail Devindra at dahardawar@amherst.edu to see if he's as geeky as these articles make him seem. He may or may not kick serious ass at Smash Bros.