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Nintendo DS Successor Ready?
The successor to the Nintendo DS could be introduced as early as this year, bringing with it the potential to spur even more growth for Nintendo, Wedbush Morgan's Michael Pachter said Wednesday.
"We think that the timing of a new product introduction will depend upon the sales profile for the DS, and believe that lower than expected DS hardware sales could trigger an earlier launch for the new device," Pachter said in an investor note.
"DS sales are solid worldwide, but are weak in Japan, leading us to expect an introduction of a new device in Japan before the end of the calendar year."
He said that Japanese DS demand will likely continue to decline. He adds, "We think that Nintendo has a new handheld device ready for launch in [Japan] before the end of the calendar year."
It's not the first time that analysts have said Nintendo has a DS follow-up ready to go. Months ago, Colin Sebastian with Lazard Capital Markets said the same.
"Flawless" Victory
Pachter also said "It is clear that Nintendo is executing flawlessly." On Wednesday, the Japan-based game maker announced quarterly sales of $3.9 billion and operating income of $1.1 billion.
The analyst estimates that Nintendo is producing 2.4 million Wiis monthly, up from 1.8 million. "We expect to see a large portion of the increase in Wii monthly production ... shipped to the U.S. market, and believe that Nintendo is well-positioned for dramatic software sales in that territory over the balance of the year."
He added, "Similarly, we think that the lion’s share of the expected 28 million DS hardware units shipped during the fiscal year will land in the U.S. and Europe, and we expect to see strong software sales in those territories."
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@Pascal_Clarysse: I agree. I think Nintendo is far more worried with bettering the mix of games on the Wii and DS.
I find the possibility of a DS refresh to be likely, though. Be it more colors, a new size, or perhaps larger screens. I actually sort of expected a DS-Liter for the summer.
Given the success with the motion sensing Wii, my guess is the new DS will have an accelerometer in it. Mario Kart with a tilt-to-steer interface?
Well it wont take them long to get them ready, Im sure it will only be two DS's gaffer taped together!
Who want's a new one, certainly casual/non-gamers aren't asking for one?
Could this be an opportunity for Nintendo to announce a new "Game Boy"?
Where is all the build up and hype that would precede the launch of a new platform? Even if it was announced at GC or TGS the entire promotional effort would have to be so rushed.
Not likely in my opinion.
At the most I expect a redesign, maybe with one or two added functionality like GPS, but not a new system yet.
A completely new system would just be too soon, even in 2009.
A redesign sounds more probable - that way they can keep the price at the same level and boost the sales. Not that they haven't already done it... but they redesigned GBA what, three or four times?
The DS sales may be declining in Japan on year to year basis but the platform still has legs for another 12-15 months. The focus for Nintendo should not yet be on bringing out a hardware successor, or even unveiling it, but rather on maximizing profits from the enormous installed base through software sales, where the real money is in video games.
In my opinion, their next big one-two punch would not be a price drop or a re-design but rather the release of big properties like Smash Bros DS (based on the Jump SuperStars engine) and, of course bloody of course, New Super Mario Bros 2.
As the system nears the 100 millions mark globally, you'll also see the "third party flock" phenomenon, which has already started, dramatically increase the royalty money derived from software.
The dollar is weak in the US. Nintendo is a Japanese company and therefore their first market. Why do you think there is such a shortage of hardware in the US? They make more money in their own market.
Pachter has been alright lately, but he's just insane in his analysis right here. Why would Nintendo even entertain the thought of releasing a new handheld when the DS is selling monstrously well in the U.S. and Europe!? Ok, so the DS has reached saturation in Japan, we know that now. But the first option is to release a new handheld as opposed to releasing a new color or *gasp* having a price drop!? No. Makes no sense. Also, software sales on DS are UP. It's still profitable. It still prints money.