Since Nintendo unveiled its next home console, shares in the company have fallen to a 5 year all-time low. Yesterday saw a decline of 5.7%, dropping a further 5.2% as of midday, today. The new platform, dubbed the Wii U, is Nintendo’s first HD console, allowing consumers to play either through their television sets or via the new controller which harbours a built-in touch screen. Chief fund manager of Ichiyoshi Investment Management, Mitsushige Akino, explains:
The product itself is not bad–market expectations had been far too high… it is also a reflection of structural issues caused by a transformation within the market.
The main reason for concern as to how well the Wii U will sell is Nintendo’s target audience. The original Wii was seen as a totally unique experience, using motion controls to open a gateway for non-gamers whilst pressing first party titles to keep the Nintendo core happy. However, this time around not only is the Wii U playing host to multiplatform versions of big-name upcoming titles (Assassin’s Creed, Dirt, and Batman to name a few,) but it’s also employing innovative technology via a tablet-style device, which has been compared to the iPad and similar products. We suspect that investors are cautious of Nintendo trying to reach out and satisfy nearly all gaming-related consumer groups where other competitors are already dominating (Apple with the tablet market, Sony and Microsoft with online/hardcore console gaming,) and though the company may well achieve that goal, for now it seems unlikely.
Source: Wall Street Journal