BUSINESS

Swings like a sword, and it’s worth millions

COLIN CAMPBELL July 23 2007
BUSINESS

Swings like a sword, and it’s worth millions

COLIN CAMPBELL July 23 2007

Swings like a sword, and it’s worth millions

COLIN CAMPBELL

When Microsoft announced last week that it was facing a US$1.1-billion repair bill for its XBox 360 video game console, it was hardly the kind of news needed to boost what so far have been disappointing sales. Over at rival Sony, things haven’t been much better. This week the company announced that, in an effort to boost sluggish sales, it will cut the price of its PlayStation 3 console by as much as $100.

The surprise front-runner in the race for video game superiority has been Nintendo, with its newest console, introduced last November, the Wii. According to research firm NPD Group, in the United States in May, Nintendo sold 338,000 Wiis, while Microsoft sold 154,900 XBox 360s and Sony sold just

81,600 PlayStation 3s. Earlier this month, Nintendo passed Sony, the world’s largest video game maker, in market capitalization (the company is now worth US$53 billion).

Part of the Wii’s success is due to price. It costs $290, compared with the PlayStation 3, which costs as much as $660, and the XBox 360, which runs to $550. But a bigger factor has been its innovative design—the Wii has a motion-sensitive control stick that can be swung like a sword or baseball bat, making video games, once the domain of lonely teenagers, more of a family-fun activity. “A PlayStation 3, although it’s technologically magnificent, there’s nothing new about it,” says Chris Byrne, an independent toy analyst. The Wii, he says, has made video games “a valid form of family entertainment.”

What Nintendo has done with its Wii is comparable to what Apple did with its iPod, says Byrne. “They’ve delivered a unique product.” Like the iPod, it’s become a must-have item. And more than seven months after the Wii was released, people are still lining up at stores to get their hands on one. M