• On BNET: 24 killer apps for a flash drive
July 14, 2008 10:08 AM PDT

Why Microsoft and Sony should be scared of the Wii

At this year's E3, Microsoft and Sony will be taking the stage to discuss the future of their consoles. After that, Nintendo will gloat about its success and take the opportunity to tell the world that its Wii is second to none.

Of course, during all those press conferences, Nintendo will be the only company to even mention its competitors. Microsoft and Sony, on the other hand, will only talk about the other and make it abundantly clear to everyone that Nintendo isn't being considered a real competitor to either firm.

And just in case you don't believe me, Sony CEO Howard Stringer at a conference last week said that he doesn't even think the Wii is on the same level as his company's console.

"I've played a Nintendo Wii," Stringer said last week at the Allen & Co. media conference in Sun Valley, Idaho. "I don't see it as a competitor. It's more of an expensive niche game device."

Sorry, Howard, but lest you forget, the Wii is very much a competitor of yours and if you keep thinking otherwise, you won't stop the butt kicking.

The Wii, Playstation 3, and Xbox 360 are all competitors and so far, the Nintendo Wii has taken the top spot. Sure, it may be priced substantially lower than the others, its library of games is much different, and the way you play the games doesn't mimic anything we've ever seen in a video game, but that alone doesn't make it any less of a competitor.

The way I see it, Nintendo, Sony, and Microsoft are all vying for the same customers -- gamers. And although Nintendo has been able to entice other consumers into the space that had heretofore never had any reason to play games, we simply can't denigrate its performance and downgrade its ability to be a major success in this generation.

By its very nature, competition assumes companies are working against each other for the same dollars. And although Microsoft and Sony don't want to believe it, Nintendo is taking money out their pockets every day while they try to tell the rest of us that it's not really happening.

I'm awfully sick and tired of listening to Sony and Microsoft denigrate Nintendo and try to make it seem like it's not even in the gaming industry. On numerous occasions I've been told by both companies' PR teams that Nintendo isn't a competitor and that mantra has been repeated over and over by their CEOs and other top-level executives.

Here's a newsflash: when I go to Gamestop, Target, Wal-Mart, GameCrazy, and any other video game retailer, the Playstation 3 and Xbox 360 is sitting right next to the Wii. And when people run down to their local Gamestop to buy a video game, they buy those Wii titles instead of Xbox 360 and Playstation 3 games.

Just because the Wii does gaming differently, it doesn't mean that it's not a video game console. According to Stringer, the Wii is just "an expensive niche gaming device," but I think that comment alone shows exactly why Sony can't get out of its own way in the business. If the Wii was just another niche device, it wouldn't be selling nearly as well as it does and whether Stringer and his cronies want to believe it or not, it wouldn't be beating the hell out of his console.

In reality, Microsoft and Sony are saying this to make themselves feel better. And while it may help them get through the tough times for a while, the reality of the situation dictates that they stop burying their heads in the sand and accept the fact that Nintendo is a major competitor.

If they don't, there's not a chance in the world that either company can supplant the Wii as the leader in this generation.

Want to know what Don is up to? Follow him on Twitter and FriendFeed.

Don Reisinger is a technology columnist who has written about everything from HDTVs to computers to Flowbee Haircut Systems. Don is a member of the CNET Blog Network, and posts at The Digital Home. He is not an employee of CNET. Disclosure.

Recent posts from The Digital Home
The Digital Home Video: Hands-on with Silent Hill: Homecoming
Apple: The cheaper alternative?
The Digital Home Video: Should you buy The Godfather on Blu-ray?
Will Halo 3: Recon turn the Halo series around?
The Digital Home Video: Why Apple needs to target students
Add a Comment (Log in or register) 116 comments (Showing first 20 comments)
by dmsto July 14, 2008 11:40 AM PDT
Isn't that what the CEO of GM said back in the early 1970's when asked about Toyota?
Reply to this comment
by 22mojom22 July 14, 2008 12:33 PM PDT
i honestly don't think that his comments about the Wii being a niche system are completely out of line. I think both Microsoft and Sony have for a long while been acknowledging the fact that they have no intention of competing with the Wii because they feel that the Wii and Nintendo have targeted the product at a different segment of the population then Sony or Microsoft. It obviously has been a success as no one can deny the numbers that the Wii is pulling down. That being said though the Wii for the most part does primarily appeal to the casual gaming market. While there are a few hard core titles available for the system the attatch rates for the system speak to the fact that a majority of the Wii owners out there are not purchasing software in droves. It sadly still looks like the Wii is trapped into the same problems that plagued the Game Cube in that only the 1st party Nintendo titles are truly successful. Sony and Microsoft on the other hand appear to have a different demographic in mind for their systems. That demographic being the segment of the population that has traditionally been buying video game consoles. Nintendo was smart in their positioning, because the niche that has received their attention is huge and the sales reflect it. However, in terms of the video game buying public it is still a niche. Granted Sony and Microsoft have their own niche that they are targeting. I think that the decision by Sony and Microsoft to let the Wii have their niche and the fact that they are aware of the fact that they can exist with in that same space is a wise decision. The only thing that I can see threatening this market view is if 3rd party development on the WII takes off to the point that it can allow the Wii to compete directly for the hearts and dollars of the 'hardcore' audience of Sony and Microsoft. The Nintendo Wii is without a doubt a refreshing piece of hardware in terms of it's abilities. However, there needs to be development on the platform that will take advantage of the unique abilities of the system. The Wii could be brilliant for FPS games and as Metroid proves, if implemented correctly the Wii can deliver an experience that is totally unique compared to the other systems. the problem with the Wii is that where are the games that provide these experiences? Nintendo could very well secure a large share of the hard core audience by creating titles that utilize the special gifts of the system to offer hard core experiences that go beyond just a gimicky control scheme. That being said, I hope that Nintendo realizes how tenuous their window of opportunity is to grab these hard core players. As each month passes the hardware gap between the Wii and the other systems will only grow and become more apparent. For all it's innovative control scheme the Wii games are really going to not ever look much better then they do now. The same can not be said for the other consoles especially the PS3. As far as the PS3 goes developers are really just starting to scratch the surface of what that system might be possible of doing. To put things into perspective, I have long felt that the PS2 was never really used to it's full potential until the appearance of God of War, a game that came very late in the console's life cycle. The PS3 has that same potential, and that is why I believe over time in spite of the numbers in Nintendo's advantage will in the long run prove to be the longest living of this console generation. Microsoft has a bit more to be worried about because their hardware will hit a ceiling long before Sony's will. However, I am sure with see the XBox 720 appear once that plateau has been reached.
Reply to this comment View all 2 replies
by gyranthir July 14, 2008 12:44 PM PDT
Hacking the Wii is much easier, and lots of people don't even pay for games for the Wii any more.
It's not a DVD player or a BlueRay DVD player, so that puts it in a different category. It's not a media center style device.
The Wii is a fairly novel, non-gamer niche toy. For children/groups/old people, 80% of it's games are for E audiences with very little acknowledgment of the normal gamer market.
The broadway processor it uses is the same cheap POS that the gamecube used just over clocked. In my opinion it's over priced and nintendo seems to be purposefully limiting the supply to make the demand higher. Because the parts to make the Wii are so ridiculously available that there should be no reason for a shortage.

In closing, it's not even in the same ball park as the other 2 console media center devices. It may be beating them on sales, but it's not a true competitor in the market where the other 2 aim.
Reply to this comment View all 3 replies
by ewookie July 14, 2008 12:50 PM PDT
Don, I think you're close, but not quite. Sony and Microsoft are not competing with Nintendo. They are not competitors with Nintendo because they (Sony and Microsoft) are the REAL "expensive niche game device". That's what Microsoft and Sony are missing. They are aiming at a smaller, hard-core gamer audience while Nintendo aims for everyone. Also, Microsoft and Sony are not focused on gaming. They are focused on becoming the entertainment center of the digital living room. Microsoft and Sony are at war for this position. Nintendo is only focused on gaming for the masses, while Microsoft and Sony are focused on multimedia for the masses.
Reply to this comment View reply
by k3yblademast3r July 14, 2008 1:06 PM PDT
ok are you a gamer? I have all three systems and the only one i dont play is the Wii. When I as a gamer go to gamestop, I dont even look at the Wii games for one reason, THEY SUCK!!! The are like two or three games worth looking at and all the rest are crappy. The only reason why the Wii is ahead in hardware sells is because it had good marketing and a one month old baby could play it. NO it is not in the same league as the PS3 or the XBox 360. And it wont be until Nintendo starts appealing to the hardcore gamer instead of the baby/child gamer. And the Wii is not in top place over the other two consoles. If you look at the XBox 360 software sales they have sold more first-party and third-party games than the Wii and PS3 COMBINED!! And that is what matters. Also the PS3 and the 360 have features that people actually want. For example Blu-ray, online play(for 360 at least), and DVD players! The Wii doesn't even have a DVD player!! And at last years E3 (if you even know what that is) the biggest thing that nintendo had to show was a fitness game that doesn't help you get fit and basically tells you that you are fat!! Wow, that was sooooooo impressive and that's really going to show the competition. Guess what?! It's not because they don't have any competition becasue there is no way they can compete with the PS3 or the XBox 360. Me, as a gamer, is going to leave the Wii for the people who calls themselves gamers (little kids and probably the writer of this article) and I'll go play my PS3 and XBox 360, like the people who really are gamers.
Reply to this comment View all 4 replies
by jkart7 July 14, 2008 1:08 PM PDT
The buck stops here: Nintendo is making more bucks. Thus, it is not only a major competitor, but it is the heavy weight contender. Sony & Microsoft are circling their wagons, trying to convince us that Nintendo isn't a competetor. Here's the deal, though: they know that Nintendo is a competitior, & they don't know what to do about it, except to resort to their last pathetic death cries " The sky isn't falling."
There's all this talk about the "true" gamer market. But check this out: the gamer market is a fluid concept. Nintendo is recreating the gamer market.
When Sony & Microsoft come up with exteremly popular kid's characters like Mario, Luigi, Yoshi, & Pikachu, then maybe my kids will want something to tdo with them. Until then, who cares about Microsoft or Sony?
Reply to this comment
by No_Spark July 14, 2008 1:14 PM PDT
I would suppose an argument could be made that all gaming systems is a "niche" market.

The problem is, that this market is very cost sensitive AND needs to be fun. After all it is only a game! Sony attempted to tell the market what they were going to get and you have to like it because we are Sony. Then out came the David of the gaming industry.

So what is really going on here?

I believe that game console managers at Sony and Microsoft sold the next level or two of management on the XBOX and PS3 as what ALL consumers really wanted. Guess what? It wasn't...
Now these gaming managers have to deploy various smoke and mirror tactics to keep their jobs. After all Sony and Microsoft executives expect their people to be on top of the market's wants and needs. If the product is a REAL bomb then a CEO comes out and defends the thing. He has to defend it otherwise, he is seen as making bad hiring descisions.

But you can bet your investment dollar that Sony and Microsoft are developing the next generation of the Wii type controller strategy for their products while I am writing and while they are criticizing. And watch, when they come out with their "new" systems they will tell you why it isn't like Wii and why it is better!

I read the comment that the best way to by a blu ray player is through the PS3. What the is that!!! I want a gaming system, not a top end video player. Does this suggest that Sony, now that they have the monopoly on video format, will insist their licensees have to include PS3 style gaming system on their blu-ray players?

So at this point I see the positions like this

Winner: Wii - for creative thinking. Or the little engine that could.
Runner-Up: Microsoft - At least Bill Gates didn't have to get involved.
Loser: Sony - The CEO had to come and defend an expensive blu-ray player/gaming system that played like every other gaming system since Pong. Just with a real good picture.
Reply to this comment View all 2 replies
by Charpman July 14, 2008 1:16 PM PDT
I don't think they compete anymore than sci-fi books compete with romance novels. They are different markets that sometimes overlap. Everyone, including me, that owns a Wii also has either a 360 or a PS3. The Wii is the least played. More for party moments or niche games, just like Sony says. I play my 360 every day, Wii...maybe once or twice every other month.
Reply to this comment View reply
by LetsGoOs July 14, 2008 1:27 PM PDT
"Here's a newsflash: when I go to Gamestop, Target, Wal-Mart, GameCrazy, and any other video game retailer, the Playstation 3 and Xbox 360 is sitting right next to the Wii. "

Don, good article. But I'm going to go right ahead and call your BS. The wii is not right next to the 360 or PS3 because its still sold out. I think the thing that seperates how successful these companies have been in the gaming industry is that Nintendo has seen profits from their hardware unit for some time now while the PS3 and 360 are still/are just out of the red.
Reply to this comment View all 2 replies
by todonn1 July 14, 2008 1:27 PM PDT
Nintendo is totally a niche system. If you want a system for your kids or geriatric aunt, you should definitely buy a Wii. But, If you are a serious gamer, buy a PS3 of Xbox. The Wii is nice but 90 percent of its must-have games are Nintendo-made button-mashers with cartoony-graphics and sound. The rest of the Wii library consists of average to weak efforts 3d party platofrms with no in-depth gameplay. Say what you want about the Wii's broader appeal, but serious gamers make up a substantial portion of the gaming market and for them, the Wii has little to offer.
Reply to this comment View reply
by cmeplay July 14, 2008 1:31 PM PDT
Funny how it's not a competitor, yet when it came time to step up to the next level of game system, I chose the wii. Sure I wanted one of each, but what it came down to is my wife thinking some of the wii games looked interested...and even fun! I jumped at the chance of getting her into playing some games with me, and figured I can always sell the wii and get a 360 after she got tired of it. Well we play all the time now and have had it for many months now. Heck, we've even lost a few pounds and got in a little better shape thanks to the fit we got not to long ago. I havn't looked back at the 360. Sure they are fun, but I'm a wii convert, and proud of it.
Reply to this comment
by Mappy44 July 14, 2008 1:32 PM PDT
I've read through these comments and I think it?s absurd when it?s said that this isn?t a system for ?hardcore gamers?. I for one have been a game console owner since my Atari 2600 and have owned 2 game consoles from most generations. I have to bring a few points after reading this article.
1. Graphics/Processing power does not make a video game more/less fun to play.
2. If you group Xbox and Playstation as a ?media center device? that puts them in more of a niche market that I guess Wii is not part of.. But we are talking about gamers not movie buffs
Reply to this comment
by yamanoor July 14, 2008 1:41 PM PDT
Come on, Microsoft and Sony both are saying this to themselves? That was just an idiot from Sony brushing off Wii.

Don, Do you write or just scribble? Double check. MS just cut their price by $60. Where do you think the motivation for that came from?

I am sure MS is worried about Wii, its just wishful thinking on Sony. I am also surprised they have decided to not cut prices on the Don'tPlay Station (except that it would only add to more losses).

All said, this game's still a see-saw. There is no clear winner. There is a clear loser - Sony. They were at the top of the game once. In all likelihood, they will never be there again!
Reply to this comment View all 2 replies
by dude_master July 14, 2008 1:44 PM PDT
The Wii is totally a niche system. It is a console built for everyone, not for gamers such as the Xbox and PS. Anyone that wants to argue my point listen to this, old people buy the Wii, senoirs. People buy it for their toddlers. It is a system built not to be taken seriously.

The Wii is just a gimmick.

Ever since I saw the specs for the Wii I knew that I was not the least bit interested. I was like "Ooooh, motion controllers, they've only had those for about a decade now." anyone that has ever played virtual baseball or time crisis knows what I mean.

Reasons the Wii sucks
1. motion controllers are default "why would I want to move my character with my thumb when I'd have to swing my whole arm instead!" The technology isn't relatively new anyway. Also, the secondary controllers are gamecube controllers? N64's controller's retarded son?
2. the graphics just straight suck for this day and age, it's like the Gamecube took a couple vitamins. The PS2 runs smoother graphics in a LOT of games.
3. no dvd or cd player features, even a ps1 could play CDs.
4. 90% of there games are retarded kiddy games, i think they have around three M rated games. Their games in general are simplistic and feel kiddy, even the so called mature ones.
5. It pretty much relies on Mario and his friends to get sales from real gamers.


So they've pretty much made a kiddy console for people who don't even play over one hour a day (if at that).



The Wii is a gimmick, get over it, grow up and go get yourself a real console with real games not "Mario and Sonic at the Olympics - Tibetan Oppresion".



Once again ps and xbox pwn the wii, to nooby death.
Reply to this comment View all 4 replies
by t-b0ne July 14, 2008 1:48 PM PDT
To prove that the Wii is a real competitor to the PS3 or Xbox 360, you must show that the money spent on it would otherwise have gone to one of the other two consoles. I just don't see that. The PS2 was the best selling console of the last generation. If you look at number of consoles sold per month since launch, the PS3 is selling just as well as the PS2 did, even though it is competing with the 360.

Two important factors that don't appear to be considered here are console life spans and game sales. Game sales are where console developers make their profits. And looking at the technologies, the PS3 and 360 will be around longer than the Wii. I think as console prices continue to drop and more people buy HD TVs, the momentum will shift toward the PS3 & 360.

The Wii isn't dominating the market. It has created a new one. The reality may be that once Sony and Microsoft figure that out, they will be the one's eating into Nintendo's market.
Reply to this comment View reply
by Jeema July 14, 2008 1:49 PM PDT
"In closing, it's not even in the same ball park as the other 2 console media center devices. It may be beating them on sales, but it's not a true competitor in the market where the other 2 aim."

It doesn't need to be a competitor in the "media center device" market because no such mainstream market exists. Except of course in the fantasy world of Sony corporate hubris and denial.

And meanwhile Nintendo is laughing all the way to the bank...
Reply to this comment View reply
by GamesShoudBeFUN July 14, 2008 1:54 PM PDT
I've been a serious gamer since the ATARI 2600. In my opinion, the best system out there right now is the Wii. Sure, the XBoX and PS have better graphics, but the Wii is more fun. All these so called hardcore gamers out there who are all about PS and XBoX, go ahead and buy yourself a top of the line gaming PC and see how your console compares. I'll tell you right now, it won't. All the top title games for these two consoles are the same FPS's that I've been playing for 10 years, with slightly better graphics with each iteration. BORING.

I have more fun playing 8-bit nintendo games then I do playing the same old thing with a pretty face lift on a High end gaming console. The reason is this:

When the main focus of your system is to push the boundaries of your graphics, that is what you will get, games that look great. I like games that look good just as much as any one, but if it isn't fun or innovative, it gets old real quick.

When your gaming system has reached a graphical plateau, the only choice that developers have to gain an edge is to make a game that is fun and original.

I have been waiting for something like the Wii since the PS1. It makes even the simplest idea of a game extremely fun.

When I want great graphics, I play games on my PC. When I want a game that is original and fun, I play the Wii (or DS or NES or Genesis).
Reply to this comment View reply
by mario_kart July 14, 2008 1:57 PM PDT
As a father of two aged 6 and 9 I have already seen their game choices evolve; they *never* turn on our old PS2 and stopped asking for the XBox ever since the Wii came out. I agree with k3yblademast3r that the Wii third party games are mostly crap, but my son and daughter are relentless in their desire to bowl, golf, play tennis, mario, etc etc to exclusion of pretty much all else, Hannah Montana or Ben 10 included. Theirs is the target market all three companies are really after, when most of the *hard-core* gamers are in the real world or w/ carpal tunnel, I feel pretty sure my kids will still be on the Wii, or another version of a Nintendo product. Think about it: what kid these days does not own a Nintendo DS or game boy? If you have kids you know the true saturation Nintendo has achieved.. Game Over!
Reply to this comment
by Teasecat July 14, 2008 2:02 PM PDT
How funny!! I had to look at the date of this article. Isn't this the same thing they've been saying for almost 2 years now? No matter how many times they repeat it . . . it still won't come true!!! Is the PSP's main competitor the DS? Doesn't the DS consistantly kick the PSP's rear in all markets? Aren't the XBox, PS3 and Wii measured on the same sales charts each month? Howard Stringer is just bummed because the PS3 has never really panned out, and even MGS4 doesn't really justify $400.00. I guess I'll see when RE5 comes out. Until then I'll be doing some hardcore gaming on my Wii (virtual console) and my N64!!
Reply to this comment
by badabash July 14, 2008 2:03 PM PDT
Nintendo has done a great job of marketing and selling its Wii. As a Wii owner, I enjoyed the innovation of its playability. I wouldn't say the Wii sucks, but there was always something missing.

Consider it like this. Skateboards and cars are, at their most basic, both methods of transport. But their audiences are vastly different. I recently got a PS3 and as a gamer, not only do I feel like I'm home now, I feel like a grown-up.
Reply to this comment
 See all 116 Comments >>
Powered by Jive Software
Resource center from News.com sponsors
What Do You Get With Your Hosting Provider?
The Rackspace Essential Server

Rackspace Hosting
It's a server that automatically comes with unlimited support never outsourced, and a world-class network & data centers with solid guarantees all working for your business. We are here 24x7x365 Live

Click Here!
Unlimited, 24x7x365 Live Support

It means customer support with no call centers or automated phone systems

100% Network Uptime Guarantee

Can you afford for your website to offline? Can you trust your current provider?

The Manageable Green Hosting Solution

Choose a green configuration or customize one that works for your business.

The Fanatical Support Promise

Your complete satisfaction is our sole ambition. Anything less is unacceptable.

Certified Windows or Red Hat Expertise

Every customer has a dedicated team of experts managing your IT critical needs.

About The Digital Home

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

Don writes product reviews for InformationWeek and is a regular contributor to Processor Magazine. You can visit his personal site at DonReisinger.com or if you would like to email Don with questions or comments, drop him a line at CNETDigitalHome@gmail.com. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

Add this feed to your online news reader

The Digital Home topics

Subscribe to the Digital Home podcast

Have you ever wanted a no-nonsense discussion on what is really going with all the tech topics related to your Digital Home? If so, join Don Reisinger as he brings you the same biting commentary you've come to expect from his Digital Home blog in all its audio glory.

Subscribe to this podcast using an RSS reader other than iTunes

Subscribe to this podcast using iTunes

Don's links
Don's Facebook account
Don's Twitter feed
Don's Friendfeed account
Don's Google Reader account
Don's Last.FM account
Don's Pownce account
Don's Flickr account

Featured blogs

advertisement
advertisement

Inside CNET News

Scroll Left Scroll Right