Nintendo Sold 30 Million Wiis in the U.S., but Its Motion Is Slowing

Last week Nintendo (NYTDO) announced 30 million Wiis sold in the United States alone. It is a very impressive four-year run by any stretch of the imagination, but Nintendo could be doing a lot more with its advantageous lead.

First, the competitors are sharpening up their knives. Sony (SNE) will be releasing the Wii-like Move accessory later this year. Despite the me-too quality, the Sony Move feels like Wii 2.0: Natural, effortless and precise. It also works with currently available software.

More importantly, Microsoft (MSFT) is laying out its Kinect strategy, which, as I and my BNET colleague Erik Sherman have discussed since the product announcement:

Even if Microsoft currently has a jack-of-all-trades strategy, the method seems like a better long-term strategy than Nintendo's at this point. Thus far the console giant has managed to, well, not offer anything significantly new for its console at the latest Nintendo E3 trade conference. The disappointing part is that Nintendo has awesome potential: It is still has nearly double the user base than either competitor, has a loyal fan following (as shown in the last critical piece on Nintendo) and has some of the most recognizable brands in the world with Mario, Donkey Kong, and Zelda and Link.

But where exactly is the Nintendo console going from here? It lacks the multimedia punch or capabilities of a PlayStation 3, or even an XBox 360, so the "take over your living room" strategy isn't relevant -- as evidenced with Netflix offering streaming movies to the Wii almost a year after the XBox 360. Critically and commercially successful first-party games aside, Wii games traditionally have the lowest review scores -- and Nintendo only releases a flagship title a few times a year.

Nintendo is still in charge, and there are a couple things it can do to maintain a solid lead:

Integrate the mobile fans: This is where Nintendo can learn from Microsoft. After hands-on time with the Nintendo 3DS, I marveled at how the 3DS could make Apple (APPL) iPhone gaming seem obsolete. Imagine if, like Microsoft, Nintendo planned to truly integrate the mobile and console communities. There have been 132 million Nintendo DS units sold.
Release a new console: Four years is a great run for any console, and, based on a Newsweek report from N'Gai Croal, the Wii is just an incremental technology change from Nintendo's previous console, the GameCube. Compared this to the significant technological gaps between the XBox and XBox 360, or the PlayStation 2 and PlayStation 3. The Wii offers no HD, no organized online community and, at this point, no controller innovation. As Microsoft and Sony soup up their already powerful consoles, Nintendo sorely needs an upgrade.

Nintendo has a great user base advantage on the competitors, but significant console changes and dropping Wii software sales show that it needs to do something to keep the lead.

Photo courtesy of hobbs_images.

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