Being a video game console maker is a lot like being a movie studio: you're only as good as your last blockbuster. And these days, thanks to a lack of blockbuster game titles, fewer game consoles are moving off store shelves.
The Nintendo Wii, the Sony PlayStation 3 and Microsoft's XBox are getting old. What boosts sales of aging consoles are hit games. Nintendo (NTDOY), Sony (SNE) and Microsoft (MSFT) are hungry, maybe desperate, for hits.
Nintendo is especially feeling the pain. What would have been unthinkable less than a year ago is reality now: There are Wii's in stock at stores including Best Buy (BBY), Game Stop (GME) and Wal-Mart (WMT). There have been few hit games in 2009 and that's hurting Wii sales, which fell for the first time since the product started selling in 2006.
Nintendo hasn't announced any game or console news of late to get its customers excited. That can be dangerous for the game and console maker, especially because its retail customers will soon be placing their orders for the holiday shopping season. Industry analyst Satoru Kikuchi says that gamers are "getting bored," the Los Angeles Times reported. "Nintendo needs to keep their attention with new software, but that hasn't happened."
From April through June, sales of Nintendo's Wii and DS handheld game unit fell, while sales of Sony's PlayStation Portable handheld device and PlayStation 3 console also declined. Last week, Microsoft said revenue is down in its unit that includes the Xbox video-game machines. For the Wii, 2008 included hits such as the hot-selling "Wii Fit" and also "Mario Kart." This year, Wii sales will be dependent on sales of "Wii Sports Resort" and "New Super Mario Bros."
The Wii will soon lose the advantage of its motion-sensing controllers, which will also be sold in the next year by Sony and Microsoft. Without new consoles to create hype and sales, all three game console makers are left waiting for the hits. And with more gamers downloading games online, they need blockbusters more than ever.
Anthony Massucci is a senior writer for DailyFinance. You may follow him on Twitter at hianthony.
Small Cap Investing
Learn now to invest in small companies the right way.View Course »