Nintendo lands punches on Sony in battle of the games consoles


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May 24, 2005
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Nintendo lands punches on Sony in battle of the games consoles

Nintendo confirmed its resurrection from an also-ran in the games console market to a serious challenger to the mantle long held by Sony, as it said sales were outpacing even the most optimistic forecasts.

Shipments of its Wii console - famous for its motion-sensitive, remote control "wand" which allows players to play sports-like tennis or mime sword-fighting - topped its target of 6 million by the end of March, and is believed to be outselling Sony's new PlayStation 3 by two to one. Sales of its handheld console, the Nintendo DS, also surged.

Nintendo had told analysts to expect a record net profit of 120bn yen (£512m) for the year to 31 March. Yesterday it said this would be significantly higher. Sales totalled 966bn yen in the year ended 31 March, up from its previous forecast of 900bn yen, and compared with a consensus estimate by industry analysts of 929bn yen.

"Merchandise does not move in the January-March quarter - that is the norm in this industry," the Nintendo spokesman Yasuhiro Minagawa said. "But ours somehow did."

The Kyoto-based company is marketing both the DS and the Wii as simple-to-use, with intuitive games, and is aiming to attract customers who may never have got into gaming before. The Wii's revolutionary "wand" - plus its lower price and its slightly earlier launch last autumn - has allowed Nintendo to steal a march on Sony in the battle for supremacy in next-generation consoles. Its success surprised industry observers, who expected the main rivalry to be between the PlayStation and Microsoft's Xbox.

"It is clear the Wii is the initial winner in the console battle, but nobody knows how long things stay that way," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "I would like to wait and see what kind of strategy - pricing strategy in particular - Sony will take in its effort to catch up."

The PS3 is on sale for twice the price of the Wii. Sony says it makes a loss on every console, and only expects to recoup its investment through games sales over the long run. That limits its scope to compete with the Wii, but the firm has shown its willingness to press Nintendo on price in other segments of the market. Last week, Sony cut the price of its PlayStation Portable hand-held console in the US to better challenge the DS.

Nintendo's DS opens like a book and offers games starring the company's traditional characters, such as Super Mario, as well as brain teaser-type games. It was launched in 2004 and has recently been revitalised with a new light-weight look. Eight of the 10 best-selling game titles in Japan were meant for the DS in the past business year, including New Super Mario Bros, according to the video game magazine publisher Enterbrain.

By Stephen Foley in New York
Published: 06 April 2007
© 2007 Independent News and Media Limited
the only reason the units are shifting is cos games are copied and u can hack the thing for a tenner! seeing as the console is a loss leader and the profit is in the games then I can predict safely quite the opposite for poor old ninty :(