Wii will, Wii will rock you

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/11/MNP714MI95.DTL

Wii will, Wii will rock you
Ryan Kim, Chronicle Staff Writer
Thursday, December 11, 2008

The Nintendo Wii is poised to dominate the holiday season for the third year in a row, an unprecedented trifecta for a gaming console that is proving impervious to the economic recession.

While the gaming industry historically has been able to resist the drag of economic slowdowns, the Wii has managed to soar, thanks to its innovative motion-sensing control scheme and broad appeal among non-gamers. The wonder device continued to fly off shelves even as Nintendo announced it was increasing production for the holiday selling season by 50 percent over last year.

The NPD Group, a consumer research firm, reported Thursday that Nintendo sold 2 million Wiis in November, twice as many as last year. It was a record number for a non-December month and a staggering feat considering that the machine was released in November 2006. The company also sold 1.57 million Nintendo DS portable gaming devices, also impressive for a handheld that has been on the market for four years.

"Everything about the Wii is unprecedented," said Cammie Dunaway, Nintendo of America's executive vice president of sales and marketing. "The strategy of making it fun for anyone to play video games, the innovation with the Wii remote and the broad category of titles and the sales levels, it's all unprecedented."

Low price, broad appeal

The tough economic times might actually be lifting Nintendo's sales. The relatively cheap price of the $250 Wii console along with its appeal across an entire family makes it an even more appealing choice for households, said Dunaway.

"Families are looking for inexpensive and fun activities that they can enjoy at home together, and the Wii solves that need," she said.

Overall, the video game industry, aided by the Wii and DS, looks golden heading into the home stretch of holiday sales. According to NPD, the industry last month raked in $2.9 billion in the United States, a 10 percent increase over last November despite having seven fewer post-Thanksgiving shopping days. The industry is still on pace to hit a record $22 billion in sales this year, NPD analyst Anita Frazier predicted.

Thanks to increased production, the Wii frenzy appears to have eased a bit for customers, who in previous holidays were left to camp out at stores or pay a hefty premium online for the device.

Frenetic chase

But the Wii is still a huge seller and dominates gift conversations. And in many cases, the chase for a Wii feels just as frenetic as it did last year.

"Demand for the Wii System is actually the same or higher than at the same time last year," said Marc Owens, the customer experience manager at the Best Buy store in Pleasant Hill. "Positive word of mouth about the benefits of the system has continued to drive demand at sell-out levels for the console."

Online auction site eBay said the most searched product on Black Friday was the Nintendo Wii, of which 3,171 were sold that day. Even on Cyber Monday, Nintendo Wiis were selling for an average of nearly $350, a $100 premium over its list price. In the past 90 days, eBay has sold 125,211 Wiis for about $45 million collectively.

Even non-gamers like it

Ted Pollak, market analyst for Jon Peddie Research and portfolio manager for the Electronic Entertainment Fund, said the Wii has the chance to be the most successful entertainment product ever. He credits Nintendo with expanding the market to include not just hard-core gamers but more women, girls and older players.

"Nintendo came up with a platform that's unique in that it appeals to core gamers and totally untapped gamers," Pollak said.

Two years ago, when the latest generation of hardware fully got under way, analyst Michael Pachter of Wedbush Morgan Securities projected the PlayStation 3, the Xbox 360 and the Nintendo Wii would walk away with about equal shares of the market. Now, he believes the Wii could sell as much as its other two rivals combined and ultimately eclipse the lifetime sales of the PlayStation 2, which he once thought was untouchable.

The PS2 sold 43.2 million in the United States over its lifetime and peaked at 8.2 million in 2002. The Wii, which has moved 15.4 million units so far, has sold about 8 million through 11 months of this year and is poised to shatter the PS2's annual record with a strong December showing.

"If Nintendo sells 400,000 more units in December, they will have sold more consoles this year than in any other year," Pachter said. "That's mind boggling that the Wii is on pace to be the most successful console of all time."

E-mail Ryan Kim at rkim@sfchronicle.com.