Nintendo is changing tactics, combining social-media features and TV screen action with a touch-screen controller as the company, based in Kyoto, Japan, faces competition from an online game market that may grow to $37.9 billion by 2016. The question is whether the new console, Nintendo’s first since it introduced the Wii in 2006, features and games will attract consumers who may have moved on to newer ways to play.
“It changes your gaming, it changes how you interact with your gaming friends and it changes how you enjoy your TV,” Reggie Fils-Aime, Nintendo’s president for North America, said from the stage today at the E3 conference. “It stands to revolutionize your living room.”
Nintendo has lost 48 percent of its market value over the past year and rose 3 percent to close at 9,290 yen in Osaka trading today. Annual sales of games at U.S. retailers including GameStop Corp. have fallen for three years as consumers flocked to online titles such as Zynga Inc.’s “FarmVille.”
U.S. sales of game hardware and software dropped to $17 billion last year from $18.6 billion a year earlier, according to NPD Group Inc., an industry researcher based in Port Washington, New York. Revenue for online games is projected to rise to $37.9 billion by 2016 from $19.3 billion in 2010, DFC Intelligence of San Diego said in September.
“It’s crucial that the new software create demand and a market,” said Satoru Kikuchi, a Tokyo-based analyst at Deutsche Bank AG, who rates Nintendo shares hold. “They need two or three original titles that can exploit the features of the Wii U.”
Titles introduced today include a new Wii Fit that records how many calories players burn, a richer “Super Mario Bros.” and “Just Dance 4.”
Nintendo showed images of “Super Mario Bros.” and its Zelda character in a Wii U webcast by Iwata this week.
“Mario is a necessity” for the initial game lineup, Deutsche’s Kikuchi said.
Harder-core games were represnted by a new Batman title from Warner Bros., “Zombi U” and and Ubisoft Entertainment’s “Assassin’s Creed III.” The company also announced links to video services such as Netflix and YouTube.
The centerpiece of the new machine is a touch-screen controller called the GamePad, which serves as a second screen for games or as an independent screen for functions including video calls or Internet browsing.
The 6.2-inch touchscreen controller, about the size of a tablet computer, lets users connect wirelessly to the console. A player can switch camera angles in a game, change the lighting and flick the picture back to the touchscreen should another person want to watch a TV program.