Tumbling sales
Put together, U.S. stores sold only 340,000 Wii players in April. In the comparative period last year, the sales were 714,000 units. Along with Nintendo’s Wii, sales of Microsoft Corp.’s (NASDAQ: MSFT) Xbox 360 console and Sony Corp.’s (NYSE: SNE) PlayStation 3 also fell.
Satoru Kikuchi, a Tokyo-based analyst at Deutsche Bank AG, said, “We think the market potential of Wii may have peaked out. We think the market will begin to lower expectations on Nintendo, which is likely to enter a period of profit decline.”
The total dollar sales in the industry slid by 4 percent, compared to the 2008 numbers, to reach a level of $5.28 billion.
Sony, which had dropped the prices of its PlayStation 2, reaped the rewards. On a year-on-year basis, sales of the product were up 39 percent. Compared to March 2009 numbers, the PlayStation 2 fared even better, with an increase of 54 percent in sales.
"This is a testament to the impact a price reduction can have on hardware acquisition, with price being only second to compelling new content as a catalyst for hardware sales," said NPD analyst Anita Frazier.
Bumpy road ahead
Nintendo warned that the slump in demand of Wii sales may result in a 12 percent dip in operating profits.
Tokyo-based Sony has already declared that it is expecting to be in the red for the second consecutive year. The company is anticipating sales of 13 million PS3s this year, merely half the number of Wii consoles that Nintendo projects to sell.
The second rung companies, like Redwood City, California based Electronic Arts and the Agoura Hills, California-based “WWE” wrestling video games, continued to report their string of losses.
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