by Mike Masnick
Tue, Apr 22nd 2008 11:51am
The traditional economics of the video game console market are fairly well known. You sell the console itself at either cut rate margins or even at a loss, and then make it up in selling very expensive games for the console. That's worked in the past for the various version of the Sony Playstation and the Microsoft Xbox. But, apparently things are a bit different with the Nintendo Wii. While the Wii has been a huge success, opening up a tremendous new market of console buyers and users thanks to its unique input mechanism and gameplay, it turns out that Wii owners are buying noticeably fewer games than owners of competing consoles. In fact, it appears that many Wii owners haven't bought any games and are satisfied with the Wii Sports package that comes with the Wii. At this point, I should admit that I'm in this group as well, though part of the reason is simply not knowing which types of games are likely to work well with the Wii controller. As such, it's not worth spending a huge amount to find a game that's simply disappointing. The article suggests, also, that since Wii buyers tend to be very different than other console buyers, the marketing and advertising strategy for Wii games is all wrong. The real question, though, is whether or not this is really a long term problem. The Wii itself (unlike the PS3 and the Xbox) is sold at a profit, according to most assumptions. So, while selling more games is important, it's not as important as with the other consoles.
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