Nintendo's Next Big Innovation
Investors shouldn't hold their breath for an immediate turnaround. The company's latest game console, Wii U, struggled at retail before Xbox One and PlayStation 4 were released.
Now that its competitors have arrived (one of which just became the dominant player), Wii U may not have much of a chance.
This is a familiar story to Nintendo executives, who also had to endure weak sales of the GameCube and Virtual Boy. While GameCube played it safe and lost, Virtual Boy was a risky attempt at innovation.
The original Wii, which featured an unproven motion-based control scheme, was also a very bold and risky machine. But consumers loved the concept and purchased 100 million Wii units.
Innovative Problem Solving To Come?
For better or worse, Nintendo is usually at the forefront of new video game technology. More often than not, that technology is nothing like what consumers expect. Nintendo's next innovation is unlikely to be any different.
"I think it will be something…simple," Christine Arrington, Senior Games Analyst at IHS Electronics & Media (NYSE: IHS), told Benzinga. "They will go do some market research with some kids and find some very sensible solution to some problems."
Arrington does not expect Nintendo's next innovation to involve virtual reality or augmented reality, despite the current trend from Sony, Facebook and potentially Microsoft.
"They're trying to bring that into gaming," Arrington said of AR and VR. "I don't think it's going to be anything like that from Nintendo. I think it will be something that they identify that's a much more simple problem that has been annoying people for 20 years and they'll solve it."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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