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Nintendo's Wii U sales forecast 'disappointing, software guidance unrealistic' - Pachter

Analyst thinks console "will quickly lose momentum due to pricing"

Wedbush Morgan analyst Michael Pachter thinks Nintendo's in for a rough ride with Wii U during the console's launch period.


With the Wii U release date set for November 18 in the US and shortly afterwards in Europe and Japan, Nintendo said yesterday it expects 5.5 million Wii U sales in the business year ending March 31, 2013.

In a research note sent to investors, Pachter labelled Nintendo's hardware guidance "disappointing", noting that it was below the 6-7 million Wedbush had previously expected.

"We believe the Wii U will quickly lose positive momentum from its launch due primarily to pricing," he said. "We believe there are already a number of cheaper, comparable alternatives. For example, the prices of the Xbox 360 Kinect bundles have been reduced by $50 at Amazon, GameStop, and Wal-Mart.

"In addition, Nintendo will have to compete for wallet share over the holidays with mobile device makers including Amazon, which is introducing the Kindle Fire HD at a starting price point of $199, well below that of both Wii U sets, and Apple, which is introducing the iPad Mini at a price point of $329, below that of the Wii U Premium Set."

Pachter also views Nintendo's guidance of 24 million Wii U software units during the current business year - implying an attach rate of over four games per console - "as highly unrealistic given the steep price of both console models, 23 launch-day releases (with some likely to slip), a somewhat murky launch window that boasts many big names but lasts 4.5 months, and compelling competitive devices".

Analysis recently undertaken by CVG shows that retailers across Britain are selling Wii U editions of multiplatform games at significantly higher prices than their Xbox 360 and PS3 counterparts.