Nintendo Faces the Music

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It seemed like a surefire hit: Unite Nintendo's (OTC BB: NTDOY.PK) top-selling Wii console with the popular music-simulation game genre to create Wii Music. Surely, the world would lift high its lighters and cheer for an encore.

So why the deafening silence?

Wii Music has been a disappointment, according to this morning's Wall Street Journal. The newspaper leans on industry watcher NPD for data, showing that Wii Music sold just 297,000 copies last month. That doesn't compare well to Activision Blizzard's (Nasdaq: ATVI) Guitar Hero World Tour; its Wii version moved 475,000 copies in the same month.

The article also points out that older Nintendo titles, like Wii Fit and Wii Play, are outselling the music-improvisation game.

Am I worried? Not particularly. Activision's Guitar Hero franchise has a few years of brand recognition under its belt, so of course it'll have the initial advantage. Wii Fit has benefitted from initial shortages when it first came out, so the breakthrough exercise title is still coasting on months of built-up demand. And Wii Play? Come on, now. The only reason that title sells briskly is because it comes with an extra Wii controller for the price of a stand-alone game.

None of which guarantees that Wii Music won't be a flop, of course. Game designer Shigeru Miyamoto created Mario, Link, and in recent years, Nintendogs for the DS and Wii Fit. Nintendo's willingness to take chances on Miyamoto's wild ideas has helped the company smoke Sony (NYSE: SNE) and Microsoft (Nasdaq: MSFT) in the latest round of the console wars. But obviously, not every bet will pay off.

If anything, Nintendo may ultimately miss here because it showed up fashionably late for a change, long after Guitar Hero and Viacom's (NYSE: VIA) Rock Band carved out their shares of the market. Wii Music introduces new wrinkles into the genre, but not enough to really stand out. And it lacks the modern soundtrack that is driving sales of the two niche leaders.

However, Nintendo doesn't need Wii Music to be a hit this season. The 11 best-selling items in Amazon.com's (Nasdaq: AMZN) video game category as of this morning are all Wii-related products.

And yes, Wii Music is one of those best-sellers. Maybe this musical bet will prove a sleeper hit on its way to the top of the charts.

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Longtime Fool contributor Rick Munarriz is a fan of Nintendo and he has most generations of the console and handhelds around. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy plays a mean air guitar.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 16, 2008, at 12:52 AM, ghworldtour wrote:

    Gamers do not like WiiMusic. I have rented it and it is suited for the 4-6 yr. old crowd. GH:WT and RB2 for the are my expected winners for the Wii WiiMusic will not be a hit. Grnadparents may buy it as an XMAS gift, but the kids won't be rushing out for it. WiiFit and WIiPlay are good family games. I have both the Wii and the Xbox360.

  • Report this Comment On December 16, 2008, at 7:38 PM, rockt wrote:

    An important point to note is that Nintendo probably made more from the 200k wii music sales than they did from the 400k guitar hero sales

  • Report this Comment On December 25, 2008, at 3:49 PM, 4comment wrote:

    interesting that the MFool is promoting Nintendo as "recession proof" in their latest e-mail promotion / NTDOY is down 34% on the year - better than the market but sure as heck not recession proof / what am I missing?

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