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Analyst: DSi Spells Trouble for Retail

Joe Keiser's picture

By Joe Keiser

October 2, 2008

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In the wake of Thursday’s announcement of the Nintendo DSi, analysts have warned investors that the system’s new downloadable games service could threaten traditional retail outlets like Best Buy and Gamestop.

BusinessWeek is reporting that in an investor note, Goldman Sachs analyst Matthew J. Fassler stated that the DSi’s online store presents a “tangible early threat” to retailers, and that “While content will be limited at first, we believe it will likely ramp up very quickly.”

While the DSi will see release in Japan in calendar 2008, a Nintendo of America press conference Thursday revealed the handheld will not see western shores until well into 2009. Online Store content revealed at that press conference included versions of Nintendo’s Brain Age software.

Circuit City stock hit an 52 week low Thursday before ending the trading day at 0.64, a 14.67% drop; this compared unfavorably to the overall Dow decrease of 3.22 percent.  Best Buy stock also dropped below the Dow average, losing 5.81 percent to close at 34.40. Stock in GameStop Corp fell 0.64 percent, closing at 35.81.

fnc's picture
On October 3rd fnc said:

I don't know if this "analyst" should be trusted. Did WiiWare (or any of the other digital distribution services on the other consoles) cut noticeably into console software sales? It seems a bit specious to say that just because some users will be able to buy Brain Age online that Best Buy's sales are doomed. The percentage of people who are even able to get their existing DS online is probably a small fraction of overall DS owners. And if this online store is only accessible with a new DSi, then that's an even ~smaller~ number of potential lost sales to Best Buy. I'm thinking the battered stock market is responsible for the downturn in BB stocks, and this 'analyst' needs to look at some numbers regarding connectivity and online sales to back his assertions up when he's shooting off at the mouth.

Dr.Wily's picture
On October 3rd Dr.Wily said:

everybody has a better camera in their cellphone and most people have their songs in MP3 format instead of AAC, $50 more for a bunch of features that are practically useless while losing GBA support, I don't know which demographic Nintendo's trying to target other than their diehard fanbase who will buy anything they release

Dan_Chippendale's picture
On October 3rd Dan_Chippendale said:

Doubt I'll get the DSi. Why would I? My DS lite is gathering dust in my room somewhere. It gets dusted off when I go on holiday, thats about it. I was into it at first, but the software available for it underwhelmed me, sure there are lots of rated games out there, but nothing that I had any desire to play. Anyway, my iphone 3G more than covers everything I need. I can't really see how well this will sell, are all those millions going to drop the old version.. I doubt it.. Nintendo could be hoist by their own petard!

gyak's picture
On October 3rd gyak said:

Seriously I'm glad that they're moving in the right direction with the DSi and with the downloadable games. It worked for the iPhone and it will deliver on the DS for sure. Frankly, as a customer I couldn't care less about traditional retail -- they charge 50-60 bucks for a new DS game where I live, which is insane. That's why people use their R4s.
Bring it on Nintendo.

OmegaVader's picture
On October 3rd OmegaVader said:

I find this new DS to be rather underwhelming. I felt the compulsion to move from the original to the Lite, but I don't see reason to here.