Nintendo Co. Ltd
) has launched Wii U, its first console upgrade in six years
since the release of Wii. The Wii U is equipped with next
generation game play capabilities. Apart from having the regular
features of a video game console, Wii U's major upgrade includes
wireless GamePad, a new controller with a built-in 6.2-inch touch
In addition to the two analog joysticks, camera and speakers,
Wii U is laden with an accelerometer and a gyroscope that are
used for motion-controlled games. Wii U is priced at $300 (Basic)
and $350 (Deluxe).
The enthusiasm of gamers for the new console is evident from
the fact that Wii U is already sold out in many U.S. stores.
Moreover, research firm IHS Screen Digest expects Nintendo to
sell 3.5 million Wii Us in the U.S. in 2012 itself.
The fact that it was introduced during the holiday season will
no doubt help numbers. Incidentally, the console's predecessor,
Wii, had sold 5.84 million units in the first four months after
it was released in 2006.
The games that are available for Wii U are
New Super Mario Bros. U
. Other games that are available are
Just Dance 4
FIFA Soccer 13
Madden NFL 13
Call of Duty: Black Ops II
Looking at the broader landscape, Wii U is expected to boost
the lackluster hardware sales performance of the gaming industry.
In the last NPD video game sales report for the month of October
2012, hardware sales plunged 37% year over year. This is not a
one-off incident as video game hardware sales have been trending
down over the past year.
Industry experts have blamed the lack of upgraded consoles to
be the primary reason for this decline. There may be some truth
in the theory, since popular video game consoles, such as
) Xbox 360 is almost 7 years old (launched in 2005) and
) PlayStation 3 is as old as Nintendo's Wii.
So, the need for an upgrade was long due and with Wii U we
believe that the upgrade cycle has just begun. Hereafter, both
Sony and Microsoft are expected to launch their new consoles in
2013. The long-term prospects of these hardware upgrades are
positive for the video game industry. However, the hardware sales
decline is likely to continue in the near term as customers might
postpone their purchases to get the new and improved
Moreover, competition from social games and the emergence of
mobile platforms, such as smartphones and tablets have been and
remain headwinds for video game hardware sales. Video game
publishers are now inclined to make games that are compatible
with these devices. However, on the positive side, hardcore
gamers preferring to play the games on consoles only abound.
Currently, EA, Activision and Microsoft have a Zacks #3 Rank,
implying a short-term Hold rating. However, Sony and Nintendo
carry a Zacks #2 Rank, implying a Buy rating in the short
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