Nintendo Co Ltd said it aims to launch its Wii game console in China and South Korea next year, helping accelerate its break-neck growth and cement its recent lead over Sony Corp and Microsoft Corp.
One day after the three game makers' earnings announcements, Japan-based analysts said Nintendo looks well positioned to win the race for top spot in the current-generation videogame console market due to a strong software line-up and low hardware price.
New game hardware comes around once in every five, six years. So, making a good start is crucial, Daiwa Institute of Research analyst Koki Shiraishi said.
Since the Xbox 360 was launched one year ahead, it is roughly on par with the Wii in total sales. But if you take a look at current momentum in net growth, the Wii is well ahead.
In July-September Nintendo sold 3.9 million units of the Wii, which features a motion-sensing controller that allows users to direct on-screen play by swinging it like a racket, three times as many as Sony's PlayStation 3 sales and twice as many as Microsoft's Xbox 360 sold during the same period.
We suffer a global shortage of the Wii. Our responsibility now is to deliver as many consoles as we can to existing markets, Nintendo President Satoru Iwata told a news conference.
But next year, I think we can bring the Wii (to China).
Iwata also said on Friday he has no plan to cut the Wii price in response to recent console price cuts by Sony and Microsoft.
We are in a situation where we need to focus our effort on satisfying demand. I am not at all thinking about price cuts.
Sony recently announced PS3 price cuts and the launch of a low-priced model to ignite demand and win back game maker support in the run-up to the critical holiday season.
However, the lowest-priced PS3, which goes on sale on November 11 in Japan for 39,980 yen ($350), will still cost 60 percent more for buyers than the Wii.
Sony loaded the PS3 with its cutting-edge technology such as a Blu-ray high-definition DVD recorder. But advanced components have driven up the price for buyers and made it difficult and time-consuming for game creators to develop PS3 software.
In a major coup, Nintendo said earlier this month software publisher Capcom Co Ltd would develop the latest version of its blockbuster Monster Hunter action game for the Wii.
The game had previously been developed for Sony's consoles and the switch to Nintendo has fed speculation that support for the PlayStation franchise may be slipping.
As a key software for this holiday season, Nintendo will launch a Wii Fit home fitness game on December 1 in Japan featuring a pressure-sensitive mat that allows players to head virtual soccer balls and imitate ski jumping.
'Wii Fit' is probably going to appeal to light gamers and it will be helping Nintendo to win more users, Mizuho Investors Securities analyst Etsuko Tamura said.
Nintendo's strategy to offer innovative but easy-to-play games to expand gaming population has been a smashing success.
Nintendo shares have risen more than fivefold in the past two years to make the game maker Japan's third-most valuable company.
Asked what Nintendo plans to do with its growing cash pile, Iwata said the company may carry out a new capital policy in the near future, but did not elaborate.
Nintendo has ample cash for sure and you may say we have strong cash-generating power, Iwata said.
There is a chance that we will need to do something we haven't done or we haven't said in the not-so-distant future in terms of capital policy, if cash keeps accumulating. But it is too early to say what it would be.
Nintendo's cash and deposits totaled 912.7 billion yen as of September 30.
Shares in Nintendo closed up 2 percent at 67,700 yen, outperforming the Nikkei average's 1.4 percent gain.
(Additional reporting by Daisuke Wakabayashi in Seattle)