Analyst: 3rd party opportunity growing on the Wii

Posted Jul 6, 2007 at 5:22AM EST by QJ Staff

Listed in: Wii Tags: Colin Sebastian, Lazard Capital, Lazard Capital Markets

While Nintendo has certainly opened itself up to third party game developers on the Wii, it's no secret that the games coming from the Big N itself is currently occupying the top spots in the charts.

Needless to say, this means they get the lion's share of the profits. Coupled with the Wii's success in tapping into the largely-ignored non-gaming demographic, there's certainly a risk of going up against the big N when you're making a game for the Wii, as far as investors are concerned.

Lazard Capital Market's Colin Sebastian thinks otherwise, saying that this sort of thinking is just going to be counter-productive. The following was his response in an investor note, verbatim:

In our opinion, this view does not adequately reflect Nintendo's evolving strategy in the video game market, and may prove to be overly pessimistic as video game industry growth rebounds following several sluggish years in the console transition period.

He also pointed out another thing about game production for the Wii: it doesn't burn as big a whole in developers' pockets like the other consoles. With inexpensive developer kits and the Wii's popularity, even the lower price point of Wii titles - US$10 lower than that of the PlayStation 3 or Xbox 360 - won't be that much of an issue, as far as breaking even and making profits are concerned.

This is supported by Lazard Capital Markets' title profitability analysis, which came up with the figures that a developer only needs to sell at least 300,000 copies of its game to get its money back, rather than the steep-looking 600,000 for Xbox 360 or PlayStation 3 titles.

Certainly good news for third party developers with a budget and looking for the right console to launch their titles on. Plus, with Nintendo's WiiWare program, it's certainly going to be easier - and more economical if we may add - to break into the industry.

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Analyst: 3rd party opportunity growing on the Wii

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