Wii U underwhelms investors, as Nintendo shares plummet to five-year low


Nintendo’s share price has fallen 5.7% following the unveiling of Wii U during the company’s E3 Media Presentation yesterday.

Investors felt that Nintendo failed to address concerns that the firm is missing the games industry’s shift to scoail networking – causing shares to spiral to a five-year low.

The Wii U, complete with a new, unique touchscreen controller, is regarded as Nintendo’s attempt at winning back hardcore gamers from rivals such as Microsoft, Sony and Apple, having garnered early praise from industry critics following its announcement this week.

Meanwhile, investors have stated their worry that Nintendo are remaining too centred upon hardware, with the market continuing to shift increasingly towards a software battle with players worldwide engaging readily through online networks – something that Nintendo has failed to dip in to. Wii U, I hope, will be the turning point.

“Although some experts seem to like the new device, I expected Nintendo to move more into the social networking business,” commented Mitsuo Shimizu, deputy general manager at Cosmo Securities in Tokyo. “It’s a warning from investors that the company should reconsider its business strategy and move more aggressively into social gaming operations.”

Nintendo’s Global president Satoru Iwata immediately dismissed questions about the Wii U’s lack of emphasis on network capabilities, explaining that the company’s hit games have always been social experiences.

“It’s not that we’re negative about the network, but if we ignore those customers who don’t link their game consoles up to the Internet, that goes against our strategy of expanding the games market,” he told reporters during a Nintendo roundtable discussion held at E3 this week. “We are just trying not to shrink our own market.”

Nintendo have still left themselves plenty of time to make modifications to Wii U, and whilst its form is unlikely to change, the firm is still able to address worries, perhaps suggesting that they intend to gauge reaction following its E3 reveal.

Industry critics have praised the unique controller for the console, with Wedbush analyst Michael Pachter commenting: “Nintendo is ahead of the curve for once. It can do anything a tablet can do and people might be asking, why can’t my iPad 2 do this kind of gaming too?”

“The controller is a breakthrough,” adds Sterne Agee analyst Arvind Bhatia. “Overall, Wii U looks good, but I have to say I wasn’t blown away.”

Media also showered praised on the console, with Gamespot’s Editor-in-Chief Ricardo Torres: “It’s smart for a number of reasons. There are two levels of interface, the touchscreen for casual gamers and the buttons for more core types. They have a lot of games core gamers care about. It’s like a sandbox for developers. It’s up to them to decide the experience that works best.”

This was echoed by Iwata, who stated”There are so many developers already responding to creating new games for the videogame system we are proposing with Wii U. It can satisfy all tastes with deeper gameplay actions.”

In any case, it is certainly an exciting time to be a Nintendo fan, and I’m looking forward to seeing more information regarding the Wii U being released over the coming year.

[Thanks, Reuters]

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