Analyze This: Should There Be A 'Wii Seal of Quality'?

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Even over a year after its release, the Nintendo Wii is still in huge demand -- and difficult to find on store shelves. But some commentators are now vociferously claiming that the selection of Wii game titles contains a large number of underwhelming, if not downright lackluster titles, especially those from third-party publishers.

This change is allegedly tied to Nintendo being more permissive about the publishers and titles it concept and manufacturing approves, especially compared to rivals Microsoft and Sony. In fact, some third-party titles that look to have been rejected by SCEA for American PlayStation 2 release are now turning up on the Wii.

We asked Jesse Divnich of The simExchange, Michael Pachter of Wedbush Morgan Securities and Ed Barton of Screen Digest:

Are you concerned about the long-term prospects of the Wii, if Nintendo manages to meet consumer demand for it this year?

Should Nintendo bring back the "Nintendo Seal of Quality" (or an alternative game approval method) to enforce more stringent standards for third-party Wii games?

Are there any upcoming Wii titles for this year that you believe will help the system -- besides the Nintendo franchise titles (e.g. Super Smash Bros. Brawl)?

Jesse Divnich, The simExchange

The third-party publishers have failed capitalize on the gap between the large demand for quality Wii games and the supply of them.

2007 was a good example of this gap, as we had millions of Wii consumers screaming for more quality titles, but had third-party publishers porting over games like Need for Speed, NBA Live and Manhunt 2 -- all with lackluster quality and sales performance.

Lately, industry professionals and the general gaming community have suggested that Nintendo bring back its "Nintendo Seal of Quality."

People have forgotten why Nintendo introduced the seal in the first place: to stop piracy and to inform consumers of any extremely low-quality titles. Once piracy wasn't an issue and game quality began to evolve, more and more titles were receiving the seal, diluting its significance.

Believe it or not, back in the 80's, a lot of gamers made purchasing decisions based solely on the box art and the description on the back.

Fortunately, technology has evolved and we now have numerous media outlets (magazines, gaming community web sites) that have taken the place of needing a "Seal of Quality." It is unlikely any poorly developed title will fool consumers -- shame on Manhunt 2 for thinking otherwise!

I believe we won't see a huge influx of quality third-party published Wii titles until 4th quarter 2008. Until then, a few third-party titles can occupy our time: Star Wars: The Force Unleashed, Rygar, No More Heroes and Sega Superstars Tennis.

Michael Pachter, Wedbush Morgan Securities

I don't know that most households care about the "Nintendo Seal of Quality." And I don't think that there will be many third-party Wii exclusives that will be console drivers in 2008.

I think Nintendo will continue to thrive in 2008. The Wii supply situation should improve by 3-to-4 million [consoles], and at least 1.5 million of those will flow to the U.S. So we should see a year-over-year increase in sales as Wiis show up at Target and Wal-Mart.

The console has a price advantage over the Xbox 360 and PS3 that can be maintained if Nintendo chooses to un-bundle Wii Sports from the console.

I think that if Nintendo were to do so and cut the price to $199, it would still sell a piece of Nintendo software to 80% of new Wii purchasers, and would end up effectively lowering revenues per console by only around $10. At that price point, the Wii should be strong again in 2009.

The long-term health of the Wii should not be impacted until Wii households decide to buy one of the other consoles as a second console. Because of the high-definition video features offered by the Xbox 360 and PS3, those consoles are more likely to end up in the living room, which could relegate the Wii to the playroom. If the Wii is not at the center of the home entertainment system, software sales could suffer as a result.

This will likely take a couple of years to play out, and will ultimately depend upon pricing of the other two consoles.

I don't perceive a big threat [to the Wii] until late 2008, with the impact felt in late 2009. By that time -- as I've said before, Nintendo will likely combat the perception of "HD video inferiority" by introducing a "Wii-HD" model.

This will be fun to watch.

Ed Barton, Screen Digest

Even with a slowdown in 2008, we believe that Wii will maintain global installed base leadership through to 2010.

The perception that Wii games need more rigorous standards arises largely from vocal hardcore gamers who cannot, and do not want to, believe that a collection of mini-games is hammering their peccadillo du jour in the marketplace.

In reality, the "Nintendo Seal of Quality" promised nothing more than that the game was officially licensed, would work on the specified platform, and would be suitable for the entire family.

Publishers are sensibly targeting Wii owners by focusing on the preferences of the majority of the installed base. In general this means titles which offer game play which is accessible to people who haven't been saturated with video games previously.

Wii owners are more likely to be younger as well as female than owners of competing consoles. Third parties are also more likely to target this demographic, as they have successfully on the DS. Already we have seen releases based on Disney's Hannah Montana and High School Musical series.

According to our Games Database, which tracks all current-generation home console physical releases, there is an average of "4.9 hardcore titles per casual title" across the entire generation of home consoles.

Xbox 360 and PS3's libraries are decidedly hardcore with "over 18.5 hardcore games released per casual title" released. Wii's games library offers us "1.7 hardcore games for every casual release."

Carnival Sports works with Wii owners. Edgy, stylish No More Heroes may be a lot of very, very good things. But what it definitely is not is a release suited to the preferences of most Wii owners.

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