Is Sony Worried Nintendo's Plans Could Hurt PS4 Sales?

Sony just revealed how scared it is of Nintendo with a plan to convert original Wii gamers to the PS4.

Jul 17, 2014 at 10:36AM

If you bought Nintendo's (NASDAQOTH:NTDOY) original Wii but never owned Microsoft's (NASDAQ:MSFT) Xbox 360 or Sony's (NYSE:SNE) PS3, Sony thinks that you'll be willing to buy a PS4.

In a recent interview at Eurogamer, Sony Computer Entertainment boss Andrew House stated that a big opportunity for Sony was to "welcome back" gamers who had previously bought a Wii. House plans to do this by having Sony remaster, reboot, or reimagine older PlayStation games for PS4 owners who have never played them before. One example is the upcoming remastered version of Naughty Dog's PS3 game The Last of Us, which Sony believes hasn't been played by a large number of PS4 owners.

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The Wii (L) and the PS4 (R). Source: Company websites.

While House's plans might boost software sales among existing PS4 owners, his plan to bring "lost" Wii gamers back into the fold makes very little sense.

Why targeting the Wii audience won't work
To understand why House's ambitious strategy is flawed, we need to realize that Nintendo's Wii audience was mainly split into two groups -- core Nintendo gamers who previously owned GameCubes and N64s, and new casual gamers, who never took console gaming seriously.

The rift between Sony and Nintendo gamers started with the original PlayStation back in 1994. Many third-party developers abandoned Nintendo's N64 due to its cartridge format, which was more expensive and less convenient that Sony's CD-ROM format. That exodus forced Nintendo to support itself with more first-party games like Mario Kart, Super Smash Bros., and Mario Party -- which are all still prominent franchises today.

As a result, Nintendo and Sony gamers ended up in two different universes playing very different types of games. That gap widened into the sixth, seventh, and eighth console generations.

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The beginning of the rift: Final Fantasy VII vs Super Mario 64.

While House's theory that many Nintendo gamers aren't familiar with Sony's newer franchises may be true, the simple fact is that many of them simply don't care. Nintendo purists likely consider The Last of Us to be an overrated intersection of the Hollywood and gaming worlds, while Sony fans mock Mario Kart 8 as a kiddie racing game. Combining those two worlds is like mixing oil with water.

Meanwhile, casual gamers -- who helped the Wii outsell both the PS3 and Xbox 360 by around 18 million units -- have likely moved on to mobile games like Candy Crush Saga. For many of these gamers, who briefly enjoyed playing Wii Sports with Grandma, the Wii was simply a toy instead of a gaming console. Marketing remade games like The Last of Us and Tomb Raider: Definitive Edition won't convince these customers to pick up a PS4.

Is Sony getting scared of Nintendo?
Although Sony's plan to steal away Wii gamers seems silly, it inadvertently reveals Sony's fear of Nintendo's recent gains.

For the week ending on July 5, Mario Kart 8 was the top-selling game in the U.S. and the entire world. The game has already sold more than 2 million copies since the end of May, and helped Wii U sales climb to 6.6 million units. The Wii U still trails the 8.4 million PS4s that Sony has sold, but it remains comfortably ahead of Microsoft's Xbox One, which last reported sales of 4.8 million.

Looking ahead, heavy hitters like Super Smash Bros., Hyrule Warriors, and a new Legend of Zelda could help the Wii U gain more ground against the PS4. If its Amiibo interactive figurines are as big a hit as Activision Blizzard's (NASDAQ:ATVI) Skylanders, both Wii U and 3DS sales could soar even higher.

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Nintendo's Amiibos. Source: Nintendo.

Nintendo's new emphasis on allowing Amiibos to ferry game data between the Wii U and 3DS should also worry Sony. The 3DS is still the top-selling console of the current generation, with 44 million units sold worldwide -- more than sales of every Wii U, PS4, PS Vita, and Xbox One combined. If Nintendo finds even more ways to connect the 3DS to the Wii U with methods such as cloud-based cross-play, the 3DS could help lift Wii U sales as well.

The Foolish takeaway
Andrew House claims that Wii owners "skipped" a generation by missing the PS3 and the Xbox 360. That's technically inaccurate -- the Wii, PS3, and the Xbox 360 were all seventh generation consoles.

House's claim asserts that the PS4 is not one, but two steps up from the Wii. It's a clear bid to convince "lost" Wii owners to buy a PS4 instead of a Wii U, which is probably what they are considering buying now following the release of Mario Kart 8.

In conclusion, Sony is clearly getting rattled by Nintendo's big gains -- otherwise, it wouldn't need to try to "welcome back" gamers who were never theirs to begin with.

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Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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