I'd like to put in my $0.02 as to why Nintendo won't be releasing Wii Play 2 any time soon. It's because Wii Play is still making money... and lots of it.
In Japan, Wii Play is constantly in the top 10, much like Wii Sports. Check the latest Media Create sales charts, they are 9th and 5th respectively last week. While other Wii games come and go, these two stay in there hanging onto their spots. It's a similar situation in the US. NPD has Wii Play at 5th in May, 6 months after its release. Wii Sports, as we know, is included. In Europe, it's 5th in Britain and 3rd in Spain last week.
Releasing Wii Play 2 is suicidal. Those who have Wii Play is unlikely to get it because they already have an extra controller (which was their main reason to buy Wii Play in the first place). Sure, Nintendo can release the game in 2 versions, one with and one without controller, but the games ain't that great to start with. So those who already have Wii Play is unlikely to pick it up. Besides, they won't be the reason why this stock would fall.
Those who would affect this stock are those who haven't got an extra controller yet. But why release Wii Play 2 when Wii Play is still doing exceptionally well in the market place? Gamers are still buying it in the truckload. Releasing Wii Play 2 would cut off the Wii Play revenue.
If Nintendo were to release Wii Play 2, it will require development cost (doing stuff at lunch time still cost money), marketing cost (people need to know Wii Play 2 is out there), package desgin (needs to make Wii Play 2 looks different), etc. If I were a business, and my product is making a lot of money, I see no reason to release a similar product that could jeopardise my original product. iPod is different because it continues to improve the performance and appearance of the product. In the case of Wiimote, you don't.
That said, I'm not saying Nintendo won't make Wii Play 2. What I am saying is, Nintendo won't release Wii Play 2 until Wii Play 'dries up'. The dilemma is, if Wii Play dries up, it can only mean one thing, gamers are getting controllers elsewhere. And as far as this stock is concerned, that's the end of it.
SERAPHRowen has suggested that a competing game with a controller attached will cause this stock to fall. That is true, but what kind of game would have a controller attached? A multiplayer game, of course. A one player game wouldn't need an extra controller, would it? Nintendo is unlikely to release a game with a controller attached due to the continuous high sales of Wii Play. And if they did, they would have to release the game in 2 versions, one with and one without. If the game is immensely popular, then yes, it will cause this stock to fall, at least in the short term.
Any third party games that need two players? Of course there are, but remember, the third party will probably have to pay Nintendo license fee to package a controller with their game, which will increase their cost, thus increase the price of the game. Those who already have 2 controllers would think twice about getting the game. Of course, we're assuming Nintendo would let them compete with Wii Play in the first place. And again, the game will have to be released in 2 versions to cater for those who already have the controllers, and those who don't.
Next, the price of the controller drops. This is the most likely scenario. A price drop will certainly make gamers think about whether the extra money for crappy games is worth it. In the short term, I don't see the price of controller dropping. If Nintendo is smart, they would reduce the price of Wii Play as well if/when they drop the price of controller.
In essence, Wii Play is NOT a game that comes with a controller. It's a controller that comes with a game. If you understand that, you will know why Wii Play will continue to sell.
So after all the crap that I have said, where does that leave us? Overvalued? Undervalued? Just right? I think it's undervalued in the absence of any news/hints/rumours that controllers will be included in any other games. Sales of Wii is certainly very strong at the moment. Sales continue to be strong for this game throughout the world. 3.5M worldwide in 6 months for 8M Wiis sold is quite a feat, and the momentum is not abating. If it continues to sell like it is now, it would hit 6M in less 6 months.
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In Japan, Wii Play is constantly in the top 10, much like Wii Sports. Check the latest Media Create sales charts, they are 9th and 5th respectively last week. While other Wii games come and go, these two stay in there hanging onto their spots. It's a similar situation in the US. NPD has Wii Play at 5th in May, 6 months after its release. Wii Sports, as we know, is included. In Europe, it's 5th in Britain and 3rd in Spain last week.
Releasing Wii Play 2 is suicidal. Those who have Wii Play is unlikely to get it because they already have an extra controller (which was their main reason to buy Wii Play in the first place). Sure, Nintendo can release the game in 2 versions, one with and one without controller, but the games ain't that great to start with. So those who already have Wii Play is unlikely to pick it up. Besides, they won't be the reason why this stock would fall.
Those who would affect this stock are those who haven't got an extra controller yet. But why release Wii Play 2 when Wii Play is still doing exceptionally well in the market place? Gamers are still buying it in the truckload. Releasing Wii Play 2 would cut off the Wii Play revenue.
If Nintendo were to release Wii Play 2, it will require development cost (doing stuff at lunch time still cost money), marketing cost (people need to know Wii Play 2 is out there), package desgin (needs to make Wii Play 2 looks different), etc. If I were a business, and my product is making a lot of money, I see no reason to release a similar product that could jeopardise my original product. iPod is different because it continues to improve the performance and appearance of the product. In the case of Wiimote, you don't.
That said, I'm not saying Nintendo won't make Wii Play 2. What I am saying is, Nintendo won't release Wii Play 2 until Wii Play 'dries up'. The dilemma is, if Wii Play dries up, it can only mean one thing, gamers are getting controllers elsewhere. And as far as this stock is concerned, that's the end of it.
SERAPHRowen has suggested that a competing game with a controller attached will cause this stock to fall. That is true, but what kind of game would have a controller attached? A multiplayer game, of course. A one player game wouldn't need an extra controller, would it? Nintendo is unlikely to release a game with a controller attached due to the continuous high sales of Wii Play. And if they did, they would have to release the game in 2 versions, one with and one without. If the game is immensely popular, then yes, it will cause this stock to fall, at least in the short term.
Any third party games that need two players? Of course there are, but remember, the third party will probably have to pay Nintendo license fee to package a controller with their game, which will increase their cost, thus increase the price of the game. Those who already have 2 controllers would think twice about getting the game. Of course, we're assuming Nintendo would let them compete with Wii Play in the first place. And again, the game will have to be released in 2 versions to cater for those who already have the controllers, and those who don't.
Next, the price of the controller drops. This is the most likely scenario. A price drop will certainly make gamers think about whether the extra money for crappy games is worth it. In the short term, I don't see the price of controller dropping. If Nintendo is smart, they would reduce the price of Wii Play as well if/when they drop the price of controller.
In essence, Wii Play is NOT a game that comes with a controller. It's a controller that comes with a game. If you understand that, you will know why Wii Play will continue to sell.
So after all the crap that I have said, where does that leave us? Overvalued? Undervalued? Just right? I think it's undervalued in the absence of any news/hints/rumours that controllers will be included in any other games. Sales of Wii is certainly very strong at the moment. Sales continue to be strong for this game throughout the world. 3.5M worldwide in 6 months for 8M Wiis sold is quite a feat, and the momentum is not abating. If it continues to sell like it is now, it would hit 6M in less 6 months.