Harvey close to Wii breakthrough
AFTER initially being shunned by Nintendo, mass retailer Harvey Norman is in negotiations to stock the hit Wii games machine, as the Australian market shapes up for its first Christmas with all three next-generation consoles on sale.
The Nintendo Wii is the second highest selling next-generation console to date, but at its launch last year retailers were unable to meet demand and that continues to be a problem for Harvey Norman.
"We'd like to have a trading relationship with Nintendo, but we're waiting for them to have better stock availability," Harvey Norman computers and entertainment general manager Rutland Smith said.
Nintendo said it had resolved those delivery problems, and had entered preliminary discussions with the retailer's head office.
The pair have not traded with each other for the past four years.
"I don't think stock is the only hurdle at the moment, just logistical issues that come down to sales and trading terms," Nintendo spokesman Vispi Bhopti said.
Harvey Norman is the number-one retailer for the PlayStation 3 and Xbox 360, but Nintendo said there was no deadline for an agreement.
"If it's not in one particular retailer but is in 99 per cent of other retailers, I don't think it's going to make a big dent in the long-term business model," Mr Bhopti said.
So far the Wii has sold 106,538 units, according to figures released by analyst Gfk, compared with 181,561 Xbox 360 units sold, which is the highest installed base of the next gen consoles, and the PS3 has sold 54,728.
However, the veteran PlayStation 2 outsells all other consoles by almost two to one, and has sold more than two million units. Gfk analyst Daniel Morse said the PS2's success was driven by its low price.
"The PS2 is a fantastic value console, it offers a huge range of games at a very affordable price.
In January, researcher IDC published a report on console purchasing decisions, and 47 per cent of the 500 gamers that responded intended to purchase a new console this year.
More than 50 per cent said they would purchase a PS3, while more than 30 per cent said they would buy a 360 and about 15 per cent said they would buy a Wii.
IDC's report also shows that the majority of gamers aren't interested in consoles' additional features, such as the 360's Media Centre extender capabilities, and the PS3's Blu-ray drive.
Mr Smith confirmed that people purchasing the PS3 and 360 were mainly gamers and early adopters, but he expected the proportion of consumer sales to grow as they become more aware of the additional features.
He said the Christmas trading period would show the first signs of this increase.
Gary Wheelhouse, electronics proprietor at Domayne in Alexandria, Sydney, said the PS3 was its strongest seller, followed by the PS2, and then the 360.
Domayne also doesn't sell the Nintendo platform.
"In this store we sell more PS3s out of the audiovisual area than we do out of games area.
"That's because a lot of consumers are looking at the PlayStation 3 as the least expensive but also best featured Blu-ray player on the market." Sony and Microsoft have positioned their new consoles in the frontline of the war between Blu-ray and HD DVD, but Mr Wheelhouse says the PS3 meant "never a shot was fired".
"I have absolutely no doubt that the strength of Blu-ray in terms of it being the preferred HD format, is going to be largely attributable to the number of PlayStation 3s out there.
"PlayStation 3s as Blu-ray players would have to represent 95 per cent of players on the market.
"People are not buying Xbox 360s so they can buy an HD DVD player. I always looked at the HD DVD drive almost as an afterthought."
IDC's report shows, however, that vendors should only start promoting their consoles' additional features after they have reached their mid-life cycle, as they risk alienating their established audience.
In the short-term, it said, the games will decide a console's success, a point echoed by EB Games managing director Steve Wilson, who expects blockbuster titles scheduled to be released for the PS3, 360 and the Wii later this year will reveal that the consoles have been "worth the investment".
"Retailers don't make any money selling hardware. It's really about how many games and accessories you can sell for each machine.
"It's where the big game sales come from that really matter."
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