With more third parties aligning resources towards the Wii, Sterne Agee's Arvind Bhatia sees Nintendo's software share finally declining in 2009.
by James Brightman on Friday, March 06, 2009
Sterne Agee analyst Arvind Bhatia has not only weighed in on the potential for PS3 and PS2 price cuts, but he's also addressed the third-party publishing situation on Wii. Nintendo has always dominated its own platforms with its first-party titles, leaving a much smaller share of the market for third parties to wrestle for. That's been especially true on Wii, but more third parties are starting to find success on Nintendo's platform of late.
Bhatia said that with the massive success of the Wii, "third-party publishers are aligning more towards the Wii console this year given the large (and rising) installed base and lower development costs for the Wii console." He estimates that Nintendo currently controls a 70 percent share of the Wii software market, thanks to hugely successful titles like Wii Fit, Wii Play, Mario Kart and more. As 2009 progresses, however, Bhatia said "we expect third parties to take share from Nintendo."
With past Nintendo systems, the balance between first-party and third-party was closer to 60/40, from what we understand from publishing sources. So there's certainly plenty of room for further third-party software growth. How much beyond 40 percent third parties could capture time will tell.
Bhatia also said that although the current console cycle is expected to last 7-10 years, with the new consoles not launching until 2012 at the earliest, he commented that "it is possible Nintendo releases a slightly updated machine without a full upgrade" – a Wii 1.5, if you will.
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