By Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) â€" Nintendo Co. will roll out the first new home videogame console the market has seen in six years this weekend, though the long-term potential for this latest game machine is far less certain than similar launches in the past.
Nintendo /quotes/zigman/128670/quotes/nls/ntdoy NTDOY +1.39%  /quotes/zigman/195847 JP:7974 +1.73%  will put the Wii U on sale in North America on November 18 â€" less than a week before the kickoff of the traditional holiday shopping season. The console will start at $300, giving it a premium price tag to the starting prices of its two main rival consoles â€" the Xbox 360 and PlayStation 3 â€" which have long ruled the market for the sorts of hard-core, high-definition titles that appeal to traditional gamers.
Expectations are relatively high for the initial launch. GameStop /quotes/zigman/389699/quotes/nls/gme GME +4.34%  reports that it has sold out of its initial allotments for the console. In an interview with MarketWatch, GameStop president Tony Bartel said the company has about 500,000 customers on its “wait list,†most of whom have put down a $50 deposit to reserve a console as they become available.
“Our only concern is having enough supply to meet demand,†he said.
Nintendo itself has projected that it will sell about 5.5 million units of the Wii U globally by March 31, the end of its fiscal year, along with about 24 million units of software designed for the console.
Like its predecessor Wii console, the Wii U is designed to appeal to a broader demographic. Nintendo has long cultivated a base of family customers as well as core gamers who grew up with its popular characters such as Mario, Donkey Kong and Zelda.
In fact, the new device builds upon the Wii in several ways. Players will still use the Wii-Remote â€" the motion-sensing controller ushered in by the previous console. But the Wii U adds a new element called the GamePad, which melds traditional analog stick-and-button game controls with a touch-screen tablet that allows players new ways to control their games â€" and in some cases, move the game off the TV set altogether.
The Wii U also offers games in high-definition, finally bringing the Nintendo platform on par with the offerings from Microsoft /quotes/zigman/20493/quotes/nls/msft MSFT -0.67%  and Sony /quotes/zigman/197524/quotes/nls/sne SNE -0.10%  /quotes/zigman/197500 JP:6758 +3.28%  . This will allow the console to offer popular hard-core titles such as “Call of Duty: Black Ops II,†“Assassin’s Creed III†and “Darksiders II†at its launch. Read: Nintendo gambles with Wii U console.
Nintendo has also built a service called T-Vii within the device, that allows users to control their TV sets and navigate their cable offerings and other services such as Netflix and Hulu from the GamePad.
But the new console still faces several competitive hurdles. The videogame business has shifted significantly in recent years, as smartphones and tablets have become popular gaming platforms in their own right, with content often offered for a few dollars, or even free.
Analysts believe Nintendo has been hurt the most by this shift, as a larger portion of its customer base is believed to be composed of casual gamers who prefer the cheaper options over investing hundreds of dollars in a console and game disks.
“A lot of the people who loved Wii software early on are loving the software on their iPhone and iPad right now,†said Doug Creutz, videogame analyst with Cowen & Co.
The Wii was a blockbuster success in its early years, following its North American launch in November of 2006. By the end of the March quarter in 2009, the global installed base had passed the 50 million mark. Nintendo has sold a little more than 97 million units of the console for its life-to-date, though growth in unit sales have been in the low single-digit range for the past two years.
Nintendo head demonstrates Wii U
After unveiling the new Nintendo Wii U, Nintendo of America's President Reggie Fils-Aime stopped by the WSJ offices for a private demonstration of the new console, and to discuss Nintendo's strategy for the new console.
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