Pachter: PS3, 360 may begin to cut into Nintendo’s market share later this year, timing of 3DS announcement surprising
“Nintendo’s overall performance has fallen short of our expectations, with software down over 30% and Wii hardware units down almost 50%. The company may have faced supply constraints for its hardware, but staple titles like Wii Fit with Balance Board and Wii Play were also well below historical levels. We are hopeful that the supply situation for hardware and for these key titles will correct in March; if not, we think that weak sales may suggest waning consumer support. We expect continued momentum for the PS3 due in part to its list of exclusives in early 2010 (Heavy Rain, God of War III, MLB the Show 10, et al) and Blu-ray compatibility. We are less sanguine about a March or April catalyst for the Wii, as there are no exciting first party exclusives until May (Super Mario Galaxy 2). Over the last several years, the Wii has benefited from being the cheapest console, but a consistently declining tie ratio causes us some pause. We believe that the PS3, with multiple high-profile exclusives and the newly-announced Move Controller, and the Xbox 360, with Project Natal, may begin to cut into Nintendo’s market share later this year, and think that it is possible that the three consoles divide the market more evenly at holiday. The DS continues to sell at an amazing pace, and we expect solid sales in March with the end-of-month introduction of the DSi XL. We also expect solid software contribution in March from the release of the Pokémon games, which we project will sell 5 million units combined world wide. We found the company’s announcement of the 3DS somewhat ill-timed, coming the week before the launch of the DSi XL. In our view, the company’s announcement warned consumers that the DSi XL would be obsolete within a year, and we were surprised at the timing.” – Wedbush Morgan Securities analyst Michael Pachter
I’ve got to admit, Nintendo’s first-party lineup for the first few months of 2010 is bland. However, it’s possible that the company is allowing third-party titles like Red Steel 2 and Monster Hunter Tri to shine. And then we’ve got three fantastic titles – Super Mario Galaxy 2, Sin and Punishment: Star Successor, and Metroid: Other M – all within about a month of each other. Regarding Sony and Microsoft, we’ll have to wait and see if they are able to capture the same type of success Nintendo has with their motion control devices.
