SAN FRANCISCO--Nintendo Co. (7974.OK, NTDOY) said it sold out of
its new Wii U console during its first week on the market,
indicating strong demand for the company's next generation of
videogame devices.
Nintendo said it sold more than 400,000 Wii U consoles after its
release in the U.S., according to internal metrics.
"Wii U effectively sold out at retail," said Reggie Fils-Aime,
head of Nintendo's operations in America. He said Nintendo is
shipping more devices to its retail partners, but demand is
outstripping supply. "As soon as Wii U hits the shelf, it's selling
out."
Nintendo said the sales were comparable to the original Wii when
it was first released six years ago. Analysts and industry
executives alike have expressed concern about whether the new
device, whose marquee feature is a controller with an integrated
touchscreen tablet, can reignite interest among consumers that the
originally Wii console created.
The device launched last week in the U.S., amid a protracted
slump in videogame sales. The industry has been suffering from a
dearth of new device and game sales at retail stores throughout the
country for nearly a year, according to market researcher NPD
Group. The reasons for this slump have included a lack of new games
and compelling new hardware to play them; larger economic concerns
following the recession; and consumers' increasing interest in
playing games on smartphones and tablets, rather than specialized
videogame devices.
Nintendo is the first of the major game makers to release a new
console in this environment, attempting to reverse its own trends
of contracting sales for its Wii console. That device has sold
nearly 100 million units world-wide since its release in 2006,
Nintendo said, and has averaged about eight games sold per
device.
But competitors such as Sony Corp. (SNE, 6758.TO) and Microsoft
Corp. (MSFT) aren't far behind. They have already integrated motion
controls, a top selling point of the Wii, into their offerings, and
are expected to unveil new devices themselves sometime next
year.
Nintendo said it was pleased with the Wii U's sales so far, as
well as interest in the roughly 30 game titles that were available
during the device's launch, such as its own "New Super Mario Bros.
U" and Ubisoft Entertainment SA's (UBI.FR) "ZombiU"
post-apocalyptic shooting survival game.
Sales of videogames are particularly important for Nintendo. The
company has acknowledged that the device is being sold at a loss,
despite its starting price of $299. Historically, the company has
focused on selling its hardware at a profit from the outset. This
time, however, the company said the loss is easily reversed: the
sale of one piece of software helps to bring the device back into
the black, Nintendo said, underscoring how important game sales are
to the company.
"It is critical that we get consumers to purchase software to
engage with the system," Mr. Fils-Aime said, adding that the
company's goal is to increase sales of all games made for its
devices. "That's the fundamental of the business model."
One of the things that may help the company this time around is
its added services for the device, such as the ability to access
Netflix Inc.'s (NFLX) library of movies and television shows, as
well as its Nintendo's own Internet-connected features, such as its
new Miiverse gaming social network, which debuted last week.
Overall, Nintendo said it sold more than 1.2 million videogame
consoles in the past week, including the Wii, which sold more than
300,000 units, and its handheld game players, such as the 3DS,
which rung up more than 250,000 units.
Write to Ian Sherr at ian.sherr@dowjones.com
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