Nintendo Touts Record 2010 DS Sales … Can’t Spin Away Bad Wii Sales Trends

Yesterday I got an email from Nintendo titled “Nintendo DS and Wii Set New U.S. Sales Records in 2010”. The email touted a few figures, and here is a snippet:

According to Nintendo’s internal sales figures, the Nintendo DS™ family of portable video game systems has sold more than 47 million in the United States since the original model launched in November 2004. That tally makes Nintendo DS the nation’s best-selling video game system of all time.

For the second major milestone of 2010, Nintendo’s internal figures show that the Wii™ home console marked its third consecutive calendar year with U.S. sales of more than 7 million – a feat never before accomplished in the history of video games by a home console. To date, the Wii system has sold more than 34 million in the United States alone.

The first part is pretty amazing, but not really surprising – the Nintendo DS has been an amazing success since it was released just over 6 years ago, and with each new iteration to the product line Nintendo has added value and usability to the system.

It is hard to recall, but at first the DS sales were relatively slow, selling about 2.5 million at launch in Nov/Dec 2004, ~12 million in 2005, then with the DS Lite launch in 2006 that ramped to more than 20 million, and 2007, 2008, and 2009 have each seen more than 30 million systems sold worldwide per year!

However, based on sales reports through the year and some other reports since the last quarterly note, I would predict that Nintendo will be happy to sell 20 million DS units this year. While it is partially a result of having sold so many millions of products that they are closing in on saturation and getting harder to maintain monster sales growth, and definitely due to consumers holding off for the upcoming 3DS, it is clearly a direct result of competition from Apple’s iOS devices and growing general move towards smartphones for handheld gaming.

But the big news is told in the graph of estimated Wii sales I made up at the top, which is something Nintendo was very specific not to talk about in their release. Back in 2006 through 2007, the Wii managed about 8 million sales in a very supply constrained period – we lined up outside Best Buy and Circuit City early one Sunday a few months after launch so our kids could buy theirs with Christmas money.

2008 was the breakout year for the Wii, selling more than 10 million units (shipments place it well above 11 million)! 2009 fell back somewhat to an estimated 9.5 million sales.

Given that Nintendo specifically said that the Wii had its “third consecutive calendar year with U.S. sales of more than 7 million”, it isn’t hard to read between the lines. Sales for 2010 were certainly less than 9.5 million … less than 9 million … less than 8.5 million … less than 8 million … less than 7.5 million … so they are close to the 7 million mark. That means a ~30% drop from last year! And there is certainly no supply issue like the one that kept the Wii in 2007 from selling perhaps 10 millions units or more!

And while the DS sales slump has a direct tie to an upcoming system, the Wii looks more like a fad whose time has passed. The XBOX360 with Kinect pretty much owned 2010 due to a great library, new console hardware and an intriguing new motion system that looks more ‘next gen’ than ‘me too’.

(Note I didn’t mention Sony … chances are they are looking at these disappointing results with envy!)

It isn’t clear what Nintendo has planned for the home console space in 2011, but it IS clear that they need to do SOMETHING.

Source: BusinessWire

Categories: Editorials, Gaming

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