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Nintendo Wii struggling for sales

Last Christmas Nintendo Wii was the hottest selling gift. Everyone wanted it. It was cheap and loads of fun. It was everyone naturally choice when it came to gifting a gaming console. Sadly, things have changed a LOT.

A year after with Christmas being less then a month away, Nintendo Wii doesn’t seems to be enjoying the royalty it enjoyed last year. Well, its in a far worse condition then it would have ever expected.

Nintendo Wii was the No.1 gaming console in U.S in sales now it has fallen to No.3. But the company’s U.S. chief insists there’s still a significant market.

Nintendo Wii in Crisis

Nintendo Wii in Crisis

At Next-Gen Video Games in the Mid-Wilshire district, it has been two months since a customer bought a Nintendo Wii, the console that became a sensation for letting players swing a virtual tennis racket or steer a virtual car with a flick of the wrist.

Owner Jeff Bryson has three on hand for the holiday season, significantly fewer than last year, and he’s not even sure he’ll find buyers for those.

“The Wii has really slowed down,” Bryson said on a recent evening in his store. “It’s tough to sell.”

Just three years ago, Nintendo Co.’s video-game device was nearly impossible to find, as hard-core gamers clamored for it along with novices, including families with young children and grandparents drawn to its easy-to-use wand. From January 2007, just after it launched, until last May, the Wii was the top-selling game console nearly every month in the U.S.

But things have taken a decided turn. The Wii fell to No. 3 from No. 1 this year, with sales down 24% in the U.S. Sales of Microsoft Corp.’s rival Xbox 360 are up 34%, and Sony Corp.’s PlayStation 3 has risen 14%.

Games for the device are on a similar downward slope. Electronic Arts Inc. recently told investors that Wii game sales outside of Japan fell 34% in the recent quarter and are expected to be “down sharply” for the full year. Many who have bought a Wii appear to be letting it gather dust rather than buying new games.

“The success of the Wii has been bound in large part to people who enjoyed it as a fad and have now moved on,” said Marc Jackson, chief executive of video-game finance and consulting firm Seahorn Capital.

Success of Nintendo Wii came largely from an untapped market: infrequent game players. But infrequent game players by definition also don’t make for repeat customers when it comes to buying new Wii games. They’re also the ones whose attention has recently turned to online social games such as Farmville.

During the week of Thanksgiving, Nintendo sold 600,000 Wiis in the U.S., up from 550,000 in 2009.

“The industry’s interest in the Wii has been like a roller coaster,” said Joe Minton, president of DDM, an agency that helps sell the game studios’ ideas to game publishers. “First they ignored it, then there were a few successes and they all tried to get on it. Then a lot of games failed and so there has been a pullback.”

Nor are game developers themselves overly eager to focus on the Wii.

“When you have an original idea, you want the best platform with the most cutting-edge technology to showcase it,” said Jason Alejandre, president of Tarzana-based Game Mechanic Studios. “That’s one reason most developers prefer not to work on the Wii.”

In early 2006, with the GameCube struggling and the Wii raising eyebrows for its funny name and lack of power, some in the industry said Nintendo should abandon the console business altogether. They were soon eating their words.

“Nintendo is contrarian by nature and they always seem to have a longer-term plan than their competitors,” Jackson said. “I’m sure they’re figuring out what to do next and it’s going to surprise everyone.”

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