Nintendo May Be Leaving Casual Gamers Behind With Wii U

The Wii U looks cool, but it may be too much for original Wii fans to handle.

Travis Hoium
Travis Hoium
Jun 13, 2011 at 12:00AM

The new Nintendo (OTC BB: NTDOY.PK) Wii U has evoked a lot of reaction from the game market, both positive and negative. It seems nearly everyone was impressed with the demos, but there are still many questions unanswered about the device. Here are a few highlights if you missed them:

  • 1080p HD graphics have finally made their way to Nintendo.
  • A new controller design has a 6.2" touch-screen display that opens a world of possibilities for developers.
  • Controllers now have double joysticks and trigger buttons opening the possibility for more "hard-core" games.
  • The controller can be used instead of a TV.

Gamers at E3 were excited about possibilities, but the stock market has had an entirely different reaction. Nintendo's stock has tumbled since unveiling the Wii U, falling 12.3% since Tuesday, and management can't figure out why. Company President Satoru Iwata said, "reaction to (Tuesday's) presentation and what I heard from people I met and the mood of the convention did not chime at all with what happened in the stock market." Uncertainty may be one reason why, and investors may be concerned Nintendo is leaving casual gamers behind.

Lessons not learned
One of the things that made the Wii so successful initially was a lower price than competitors, making it affordable for a wide audience. At launch, the Wii was just $250 and came with Wii Sports, a game many people never got past. By comparison, Microsoft (Nasdaq: MSFT) priced the Xbox 360 at $400, and Sony's (NYSE: SNE) PlayStation 3 was $500 for the smallest hard drive.

Nintendo hasn't released pricing information, but controllers have a 6.2" touchscreen, so we aren't talking about a cheap endeavor. If each new controller costs, say, $100 or more, that's a tough pill to swallow.

There's also increasing competition from smartphones for the casual gamer's attention. I have an Xbox 360 and a Nintendo Wii, but I use my Apple (Nasdaq: AAPL) iPhone to play games more often than either of those devices. If Apple wants to, it could turn the Apple TV into a de facto console, use iPhones as controllers and change the way casual gamers play. In fact, Nintendo's new controller looks a lot like an iPhone with a bunch of added buttons.

Wii U may be trying to catch up with Xbox 360 and PlayStation 3 on a technological level but may be alienating casual gamers in the process, and that wouldn't make the stock market happy -- especially as new competitors enter the low end of the market.

Giving the industry a kick in the pants
As fellow Fool Patrick Martin pointed out recently, the gaming industry -- Activision Blizzard (Nasdaq: ATVI) in particular -- has been less than creative lately. Most games are extensions of old titles, but very few new characters are being invented. Electronic Arts (Nasdaq: ERTS) and Take-Two Interactive (Nasdaq: TTWO) are having success with new games like L.A. Noire, but the entire industry could use a good kick in the pants to get gamers excited.

Maybe this is what we are looking for, or maybe it's a step we're not ready to take.

Foolish bottom line
Until pricing details come out about Wii U, it's going to be tough for the market to make an educated guess on how successful the device will be. The problem right now is that the original Wii's $250 price tag seems out of reach for the new device, and that has investors running for the exits. Do you think the Wii U will be a smashing success? Leave your thoughts in our comments section below.

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