Revenge of Nintendo

Nintendo just boosted their profit estimates for the coming year by $150 million from over half a billion dollars, indicating that the company might be one of the unlikely winners in the console wars.

I would have laughed at that thought even a year ago, but the numbers speak for themselves. The Kyoto-based company is on a seemingly unstoppable path to winning the Japanese side of the next generation console war.

For the longest time, Sony and its Playstation series appeared unbeatable, with Microsoft’s Xbox system a distant second, and Nintendo’s Gamecube making up the rear. Its’ cutesy branding (think Mario) had relegated it to be a player for the pre-teen set.

But Sony’s appearance at the Electronic Entertainment Expo tradeshow last May was generally considered a disappointment, with a collective balking at the nosebleed-high $499 pricetag ($599 for the full-featured version) attached to the Playstation 3, when it hits the US market this November.

Game industry analyst DFC Intelligence goes so far to predict the pricey PS3 will drag down industry sales in general, and without course corrections, wind up in third place behind Xbox 360 and Nintendo’s upcoming Wii console. The company predicts they’ll sell 6 million units of Wiii next fiscal year.

All three next-gen consoles come integrated with broadband support, it’s worth pointing out here, while both the DS and PSP come with Wi-Fi functionality and Web browsers– making the console wars a battle for the broadband platform of the living room, and for the dominant PDA of the gamer generation.

Nintendo’s fortunes have been boosted in large part by robust sales of its DS handheld gaming console (21 million sold — and in my view, by innovating more than its rivals. With its action-predominant games and movies, Sony’s PSP handheld (17 million sold) is aimed squarely at the dude demographic of 18-34 males.

Nintendo, by contrast, has consciously cast its net wider with the DS, which comes with an intuitive, easy-to-use stylus control, and a library of unique, risk-taking games with far broader appeal, including Nintendogs, in which you care for a puppy (worldwide sales 4.5 million units), and Brain Age, an educational game, for God’s sake (worldwide sales approaching 3 miilion units.)

It’s too soon to write off Sony, of course, and you have to believe they’ll make some drastic moves to stay competitive. Then again, the president of their game division recently suggested that if consumers think the PS3 is too expensive, they should just work harder. So even that’s hard to say.