Nintendo has been touting its upcoming Wii U console, but at least one analyst isn't convinced it has what it takes to be a success.
In a note to investors today, Wedbush analyst Michael Pachter said that Nintendo's console, which was revealed last week at the E3 gaming expo, is coming to the market too late, and he's concerned the device might not offer a level of graphical power that will set it apart from the competition.
"We think that Wii U is arriving two years late, given that the other HD consoles already have peripherals for movement," Pachter wrote to investors. "As Nintendo did not provide any specifics around the new console's power or pricing (Nintendo used PlayStation 3 and Xbox 360 game footage in the Wii U presentation), we are assuming that the Wii U is unlikely to provide greater power than the current HD consoles."
Nintendo's Wii U is the game company's best answer yet to its high-definition counterparts, the Xbox 360 and PlayStation 3. Nintendo's current Wii console only supports standard-definition gaming, which many hard-core players looking for advanced gameplay took issue with. The device also lacks the graphical prowess of its competitors. Nintendo has promised to address those shortcomings in the Wii U.
Even so, if Nintendo cannot deliver graphical power that easily trumps the competition, Pachter says, the company will have squandered "a tremendous first-mover advantage," leaving Microsoft and Sony open to capitalize with their own future hardware offerings.
At E3, neither Microsoft nor Sony discussed plans to release new consoles; however, they weren't expected to do so. In a report earlier this year, video game blog Kotaku cited sources who claimed Microsoft and Sony were readying new hardware for 2014. Between now and then, the blog's sources claimed, the companies would double down on their current hardware and motion gaming.
Last year, Sony released the PlayStation Move peripheral, allowing gamers to control onscreen action with their hand movements. A couple of months later, Microsoft released its Kinect controller-free motion-gaming peripheral.
If Nintendo can't deliver an alternative with longevity to not only take on current competitors, but future consoles from Microsoft and Sony, as well, the venerable game company could be in for trouble, Pachter says. To compound its troubles even further, Nintendo will need to think about Wii U pricing in addition to the device's power as it evaluates the competitive landscape. Pachter says he believes Microsoft and Sony will continue to reduce the price of their consoles going forward, and if the Wii U is too expensive compared with those alternatives, it could be in for trouble.
"Depending on pricing, the system will be either a phenomenal success or a phenomenal failure, as competitive bundles for Xbox 360 with Kinect and PS3 with Move are likely to be priced below $300 by the time the Wii U launches," Pachter said.
Microsoft's 250GB Xbox 360 with Kinect bundle is currently priced at $400. Sony's 320GB PlayStation 3 and Move bundle is available for $400, as well.
Nintendo's Wii U is scheduled to launch next year. Pricing and availability have yet to be revealed.
Nintendo was not immediately available to comment on Pachter's statements.