Bloomberg News

Nintendo Debuts Wii U Console at Home as Handheld Sales Jump

December 09, 2012

Nintendo Co. (7974)’s Wii U home video-game console debuted in Japan after sales of its 3DS handheld player drove an expansion of the country’s video-game market in the first half for the first time in five years.

The video-game maker’s first home console since 2006 comes in two versions at 26,250 yen ($318) and 31,500 yen with a 6.2- inch (16 centimeters) touch-screen controller called the GamePad. U.S. customers bought 400,000 units in the first week of sales that started Nov. 18, the company said Nov. 26. Japan sales began Dec. 8.

The high-definition Wii U’s GamePad lets users wirelessly connect to the console so characters can jump between the device and a TV, a feature Kyoto-based Nintendo is betting will help lure players away from smartphones and tablets. Japan, the world’s third-largest economy, is also the fastest growing major video-game market, as demand in the U.S. and Europe slumps.

“Nintendo has a better chance to succeed in Japan, as they have more strongly rooted fans at home,” said Satoru Kikuchi, an analyst at Deutsche Bank AG. Still, “success in the U.S. is required to generate profits.”

Yodobashi Camera Co.’s store in Tokyo’s electronics shopping district of Akihabara opened at 8 a.m. on Dec. 8, the first day of sales, two hours earlier than usual, as about 100 people lined up to buy the Wii U.

U.S. Videogame Sales

“I’ve been waiting for this for so long, and I’m thrilled to finally get it,” Ryoji Iriyama, 41, said after purchasing the console and “Super Mario Bros U” software at Yodobashi Camera. “I’m going to play this with my daughter as soon as I get home.”

U.S. consumers spent 11 percent less on video games, consoles and accessories in November than a year earlier, led by fewer purchases of consoles and handheld players. Retail spending on the products totaled $2.55 billion last month, down from $2.87 billion a year earlier, industry researcher NPD Group Inc. said in an e-mailed statement.

Industrywide sales of videogame machines and software jumped 11 percent to 175.3 billion yen in Japan in the six months ended Sept. 30, according to Enterbrain Inc. Nintendo led the gain after boosting sales of its 3DS handheld by cutting the price and introducing its “New Super Mario Bros. U” and Capcom Co. (9697)’s “Monster Hunter 3 (Tri) G.”

In Japan, Nintendo may face a challenge from its own handheld players, besides competition from smartphones and tablet computers such as Apple Inc. (AAPL:US)’s iPhone and iPad, said Tomoaki Kawasaki, a Tokyo-based analyst at Iwai Cosmo Holdings Inc. (8707) Nintendo aims to sell 5.5 million Wii U consoles and 17.5 million 3DS players this fiscal year, it said in October.

“Nintendo must offer a very distinctive feature to convince consumers to spend more than 30,000 yen to play with the Wii U,” he said. “Nintendo needs to expand its range of customers.”

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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