Nintendo brought the world the mustachioed plumber Super Mario and has sold nearly 200 million Game Boy handheld machines over the years. It's also been coaxing the elderly and other video-game novices to try out puzzles and virtual pets on its DS portables instead of the standard shoot-em-up and sports games. Now the Japanese pioneer of video games is about to embark on its biggest push in home consoles in years with a machine called Wii that puts simplicity above fancy graphics and computing horsepower.
Nintendo Co. is banking on the Wii's remote-controller wand that can be swung around like a tennis racket, fishing pole, drumstick or orchestra baton in easy-to-play games that are expected to appeal to a wider audience than young males. It goes on sale Nov. 19 in the United States and Dec. 2 in Japan.
If all goes well, Nintendo could win back some of the market share it once had in the business with its original 1983 console Family Computer, or Famicom, which was sold in the U.S. as Nintendo Entertainment System.
Nintendo is sticking with its historical fun-and-games roots as a toy maker in positioning itself against offerings from Microsoft Corp., a U.S. software company pushing Internet capabilities of its console, and Sony Corp., a Japanese electronics maker that has ruled the console gaming business since the mid-1990s.
Long history of game-making
Nintendo dates back to 1889, when it made Japanese-style "hanafuda" playing cards decorated with plum blossoms, pine trees and full moons, before moving on to Western style decks of cards and other modern toys.
After pioneering the video game business in the 1980s, Nintendo built up a host of powerful in-house game software offerings, including "The Legend of Zelda," "Kirby" and "Donkey Kong" series, as well as Super Mario and Pokemon — all offered only on Nintendo systems.
But that didn't stop Nintendo from being toppled as the industry leader in home consoles with the arrival of Sony's original PlayStation.
Sony's empire grew even bigger with the PlayStation 2, and Sony has sold more than 200 million PlayStation series machines over the years. It is estimated to control as much as 80 percent of the global home console market.
The successors to the Famicom and Super Famicom — Nintendo 64 and GameCube — couldn't keep up in part because rivals labeled them as machines for younger children. Nintendo shipped a cumulative 32.9 million Nintendo 64 machines, and 21.2 million Game Cubes worldwide.
Success with portables
But Nintendo branched out and scored success in portable game machines with its Game Boy and Game Boy Advance, and most recently with Nintendo DS that features a touch-panel screen. Nintendo has sold 26.8 million DS machines since late 2004 at a rate that's growing faster than any game machine ever.
The DS also broke new ground by offering different types of games, including ones that involved caring for a virtual pet, studying cooking recipes and tackling brain-teasing puzzles. Wii, Nintendo hopes, will continue that trend.
And some analysts are betting on Wii as a surprise winner during the year-end shopping season.
For one, it's defying past stereotypes of the young male geek audience in reaching out aggressively to older people, women and others who may be intimidated by the complex button-pushing required for most existing games.
Hiroshi Kamide, director of research at KBC Securities Japan, believes Wii will not only convert new gamers but also win over PlayStation and Microsoft Xbox fans, who may buy Wii in addition to the latest upgrade PlayStation 3. The PS3 debuts in the U.S. on Friday.
"The Wii will expand the market pie and grow in that sense, but also actually be the second console of choice for all the core gamers," he said, adding that Wii's success will depend on how well it does on both counts.
"It will be very interesting to see how much the market pie grows because of the Wii. But it is still a game console at the end of the day," Kamide said.
Wii already has a pricing advantage at $250, or about half the price of the PlayStation 3 at about $500 or $600, depending on the model. The Xbox 360, which launched last year, sells for $300 to $400.
Nintendo also is preparing more machines. Company spokesman Yasuhiro Minagawa said nearly 400,000 Wiis will be available for the Japan launch date, and likely more for the U.S. launch.
Sony had just 100,000 PS3s for the Japan launch, and 400,000 consoles in the U.S. for Friday's debut. (Its European launch has been pushed back until March because of production problems.)
Nomura Securities Co. analyst Yuta Sakurai believes PlayStation's domination in the industry will get watered down with the arrival of Wii, estimating Nintendo will sell 40 million machines compared with 70 million PlayStation 3 consoles in the next five years.
More critically, the profit is also likely to be better for Nintendo, as Sony is losing money for every PS3 console it sells until it gets a return on its massive investments, he said.
Not just about unit sales
"It's nonsense to measure success by how many machines you sold," Sakurai said. "If it's failing as a business, then it's a failure. Nintendo is doing a fantastic job maintaining profitability."
Sony is expecting to rack up 200 billion yen ($1.7 billion) in red ink in its game unit for the fiscal year ending March 2007, much of it in startup costs for PlayStation 3. By contrast, Nintendo is forecasting profit of 100 billion yen ($845 million) for the fiscal year, as Wii buoys earnings in the second half.
Nintendo also creates most of its game software for its machines in-house, which contributes to its hefty profit. Sony has outside companies making much of its game software.
Nintendo spokesman Yasuhiro Minagawa says the company's name, which means "trusting in luck," believed to refer to hanafuda cards, is telling today in the gaming business.
"You do everything you can. Beyond that, it's luck," he said. "Winners and losers in entertainment aren't decided by reason alone. Trends come and go, and sometimes great things don't sell. It's all so whimsical."