Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Microsoft's Xbox and Sony Must Avoid Nintendo's Mistake

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Wii will miss you, Nintendo (NASDAQOTH: NTDOY  ) .

The Japanese gaming pioneer halted production of the original Wii console in Japan earlier this month. It confirmed on Friday that shipments to Europe are also being discontinued. The scaled-back production of the bar-raising console that encouraged gamers to get off the couch with its motion-based controller will continue to feed stateside gamers.  

"There is no change in the status of Wii in the United States, and it is available for purchase this holiday season," Nintendo of America tells enthusiast website GameSpot, but its demise here is just a matter of time. With production being scaled back, it will be hard to get third-party developers to back the platform. Unlike Microsoft (NASDAQ: MSFT  ) and Sony (NYSE: SNE  ) , Nintendo is best known for its in-house games. That would seem to serve Nintendo well, but how actively will it continue to develop Wii titles for just the fading U.S. market? 

It's over. Don't make the mistake of buying a Wii. It's a dead console walking. Nintendo wants you to buy a Wii U, but it was selling poorly before a recent aggressive price cut. Nintendo is anchoring itself on the console front to the Wii U that hasn't gained serious traction with gamers. If it doesn't have a strong holiday selling season, it wouldn't be a shock to see the Japanese icon pull back and focus on its more popular handheld gaming business and putting out software for other platforms. 

This brings us to Microsoft and Sony. They're rolling out new systems next month. Pre-orders have been reportedly running strong for both the Xbox One and PlayStation 4. Some may argue that the two consoles are too expensive, but Sony's PS4 is cheaper than the PS3 when it was introduced. However, it will be interesting to see whether they follow Nintendo's lead in nixing the current platforms when their next-generation gaming boxes hit the market.

One can argue that Microsoft and Sony have a bigger reason to discontinue the Xbox 360 and PS3. The new consoles run on an entirely new chip architecture. Advanced Micro Devices (NASDAQ: AMD  ) has been winning some analyst raves now that it's the company powering all three consoles, but Microsoft and Sony's switch to AMD hardware make it incompatible -- organically -- with older titles. A cloud-based solution is in the works, but it won't be available in time for either launch. This may make it awfully tempting for both companies to cut the cord with supporting the Xbox 360 and PS3, but that seems unlikely. Nintendo may be willing to all but turn its back on Wii owners, but Sony and Microsoft know they will continue to have tens of millions of gamers on earlier platforms for years.

Nintendo's decision should not influence Microsoft and Sony. After all, Sony is still even selling its PS2 to make sure there are entry-level choices out there. That will be important with the Xbox One and PS4 hitting the market at price points of $499 and $399, respectively. The price gap won't be as narrow as we saw between the Wii and the Wii U. If anything, Nintendo's retreat should fortify Sony and Microsoft's efforts to keep the low end of the market going.

Microsoft and Sony can't repeat Nintendo's mistake by getting rid of the current consoles when the new ones roll out next month. The game's still being played.

Who will win this war?
The future of television begins now, with an all-out $2.2 trillion media war that pits cable companies against technology giants. The Motley Fool's shocking video presentation reveals the secret Steve Jobs took to his grave and explains why the only real winners are these three lesser-known power players that film your favorite shows. Click here to watch today!


Read/Post Comments (9) | Recommend This Article (1)

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 October 26, 2013, at 2:35 PM, mitch079 wrote:


  • Report this Comment On October 26, 2013, at 2:49 PM, Stolentime wrote:

    That article doesnt make sense.

    But still im an idiot for buying Nintendo stock, i knew all consoles Would sell...

    Im an idiot why didnt i take microsoft or sony..

    Anyway they will still Focus on Wii u Even if holiday season is bad, stop scaring potential wii u buyers

  • Report this Comment On October 26, 2013, at 3:23 PM, KingLinus3000 wrote:

    Nintendo always end production of past consoles faster then their competitors. There's no reason to sell a Wii when their focus is a backwards compatible Wii U.

    Holding on to the older model haven't worked well with nintendo, so why bother.

  • Report this Comment On October 26, 2013, at 10:29 PM, CyanideInsanity wrote:

    How is stopping wii production a mistake? The wii u is FULLY backwards compatible with wii games.

  • Report this Comment On October 27, 2013, at 1:55 AM, wonderpill wrote:

    Well if you are an investor, you should only buy stock in products that you know have a future. Nintendo stock has been strong, because they HAD great games that they have allowed to flounder in the past few years. These games, which were initially marketed to people now in their 30's and 40's, were revitalized with the Original Wii. The top selling games when I was a kid, have the same names as the newer games, allowing for the parents to make the buying decision.

    These kids grew up. They want Call of Duty, and Halo, and Headsets. My cousin told me that the only thing he wanted for Christmas, was XBOX LIVE. He didn't want Mario anymore. You know who wants Mario? People that don't want to buy a Wii... or a WiiU.

    The neat thing about the WiiU, is that it is what we all wanted from a console 10 years ago. The WiiU would have destroyed the 360 and the PS3, even at current mark-up... the fact is, they thought that after using technology that was 5 years old, to make the Wii, they thought that people will just get the new console... but the problem was, there was no gimmick.

    The next gen consoles, are above and beyond their predecessors by so much, it is almost guaranteed, that there will be one in every house, by 2015.

    If Nintendo is smart, it will sell off its hardware division to a slow start company, and do what it has always done best... Pimp out Mario, Samus, and Pikachu, and make a better handheld console.

    If Microsoft and Sony are dumb, they will try to get into the handheld market, any deeper than they already are. In fact, I am sure, that Nintendo could get them both to sign a 10 year Do No Compete, in exchange for license to the Mario Kingdom, or Pokemon... or even Metroid.

    The Only problem that I can forsee with Sony and Microsoft, is that they figure out that a merger would allow them to compete against Valve...

    See ya'll again in 7 years.

  • Report this Comment On October 27, 2013, at 2:13 AM, midarkmind wrote:

    I am sorry but what is all this doubt about Nintendo? Just because things are slow now, doesn't mean the wii u doesn't have a self life. If they pulled out on the console market it would mean they are gone pretty much for good. And I don't see that happening just yet do you? Yes this could be the last console but it doesn't mean that wii u isn't going to have great games for it. Nintendo is still going to support it for many years to come. The economy in the US and japan are bad right now but Nintendo has to just weather the storm. And even if Nintendo has one bad console, they can still make another. Its not like here in the US where companies go bankrupt left and right. Its Nintendo, they are going to be around as long as console are around...

  • Report this Comment On October 27, 2013, at 6:24 AM, Ichyichy wrote:

    If the stop making consoles, they will become meaningless like sega.

    Anyway i hope Nintendo will have success, yes Microsoft and Sony are a problem, they have the best adverising.....

    Man if not im doomed, if they dont come Big i blame My cousin

  • Report this Comment On October 27, 2013, at 2:34 PM, KingLinus3000 wrote:

    @ wonder pill, I enjoy my Mario and my Wii U just fine.

  • Report this Comment On October 30, 2013, at 3:17 PM, Stealth2k wrote:

    such a retarded article. All this site does is bash Nintendo without fact or reason

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2701000, ~/Articles/ArticleHandler.aspx, 9/30/2016 1:21:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,327.60 184.15 1.01%
S&P 500 2,170.13 19.00 0.88%
NASD 5,316.94 47.79 0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 1:06 PM
MSFT $57.51 Up +0.11 +0.19%
Microsoft CAPS Rating: ****
NTDOY $32.99 Down -0.22 -0.66%
Nintendo CAPS Rating: *
SNE $33.34 Up +0.10 +0.30%
Sony CAPS Rating: ***
AMD $6.96 Up +0.29 +4.36%
Advanced Micro Dev… CAPS Rating: **