SAN FRANCISCO—The Wii U, the successor to Nintendo Co. Ltd.'s hugely popular motion-based gaming console, is expected to get off to a faster start than its predecessor, but may have trouble matching the original Wii's long-term success, according to market research firm IHS iSuppli.
IHS (El Segundo, Calif.) forecasts that Will U will sell more briskly in following its launch Nov. 18 than the original did, largely due to pent-up demand from Wii fans. But over the longer term, Will U will need to overcome a fragmented market for gaming and the proliferation of smartphones, tablets and other platforms that support gaming, according to the firm.
Wii was a runaway hit when it was introduced in 2006, providing a less costly alternative to higher priced consoles with more intensive graphics and processing power like Sony's PlayStation 3. The original Wii was also the first gaming system to make major use of MEMS sensor technology to enable motion-based gaming.
Wii sold 3.1 million units in its first month-and-a-half of existence in 2006, according to IHS. The market research firm expects Nintendo to move 3.5 million units of Wii U over a similar timeframe by the end of December. The firm predicts that supply will be unable to keep up with demand.
"As a result of the tight inventory control Nintendo employs to manage its supply chain and strong consumer demand in these opening weeks of launch, we believe it's highly likely that retailers will experience some Wii U shortages in the run-up to Christmas," said Piers Harding-Rolls, senior principal analyst for gaming at IHS, in a staement. "Stock will be replenished in ongoing fashion, but some unlucky shoppers may well miss out."
But IHS said translating Wii U's hot start into longer-term success will be a major challenge. The market research firm forecasts that Wii U sales over the first four years of its life are expected to reach around 70 percent of the Wii's sales volume in the corresponding time frame.
"Long-term success depends on ongoing consumer engagement delivered through the constant release of high-quality content from both first and third parties, a competitive non-games entertainment proposition and a sound digital and online strategy to go along with such innovation," said Harding-Rolls. "Nintendo is still some way short of delivering a comprehensive engagement-led value proposition at the launch of the Wii U."
According to IHS, recent announcements from Nintendo show that the company has identified its weaknesses and is willing to adapt in order to remain competitive. The Wii U games lineup for the launch window features more third-party developers than Nintendo has had for its consoles in the past, IHS said. The company has also partnered with 3-D game engine provider Unity to encourage new games developers to come on board, IHS said.
"How the company executes on these new initiatives will have a substantial impact on the Wii U's ability to maintain its market relevance past the launch phase when competing with the burgeoning choice of connected devices that serve games content to consumers," Harding-Rolls said.