Saturday, August 9, 2008

Evolution or revolution? Suspense builds for Wii 2

Nintendo fans rejoice: there may well be a new arrival in the group's family of consoles sooner than you think. Satoru Iwata, president of the Japanese computer games group that has been lauded for its ability to attract new waves of gamers, has admitted that the company is hard at work on a follow-up to the motion-sensing Wii.

Mr Iwata said this week: "The hardware team started work on the next thing as soon as they were done with their previous project, but what they think up doesn't necessarily become a product."

However, the speculation that has followed Mr Iwata's hint demonstrates the interest in Nintendo's next offering.

Fans around the world are salivating over how far the concept of motion-sensitive accessories might go: a full body suit that would capture a player's every movement is one suggestion, as is the possibility that Nintendo would dispense with the television as its chief means of displaying games and favour projecting everything on to the inside of a mask. There is even talk of a mind-controlled console that could take the form of a claw-like unit strapped to the head, which would translate brain activity into movement.

And it is not only gamers who have been known to hyperventilate when considering the possibilities of Nintendo's next offering.

Investors, who have goggled at the increase in the company's profits - which surged in the first quarter by 33.7 per cent to 107.3 billion yen (£507 million) and buoyant share price, may have been forced to reach for the smelling salts when considering the issue of what will come next.

One question that is exercising the investors is how Nintendo will handle the economics of that project. Will it just be a technological beef-up of the Wii platform - a Wii2 - or will the famously innovative company take things in an entirely new direction?

And amid the adulation, some gamers, too, are wondering whether the Wii has reached its limits. Its graphics are perfectly good, but the machine's lack of computing horse-power is evident when its games are compared with those on the Playstation 3 or Xbox 360.

Analysts are worried that the company's historical practice of "front-loading" its software line-up - squeezing at least 70 per cent of the most attractive titles into the console's first two years - may force the timing of a Wii2 more fiercely than in the past.

However, it is not just the traditional gamers who are thinking beyond the Wii. The ever-growing "casual" gaming community - those people tempted into the world of video games for the first time by either the Wii or Nintendo's handheld DS console - may not necessarily be satisfied for much longer.

Hiroshi Kamide, a games analyst at KBC Financial Products, said: "The casual gamer's tastes today are pretty basic but they won't be in five or ten years' time.

"The ones who came into gaming with the Wii are going to become more demanding and Nintendo will not be able to fob them off with the level of graphics and processing it is offering in the Wii today. Nintendo has got to make a pretty tough decision about whether the next Wii is going to be evolution or revolution," he said.

To maintain its margins, the bill of goods - components, assembly and shipping - for the Wii2 would have to be about $250 (£130) initially and fall to about $100. If Nintendo were to launch its next-generation Wii within three years, $250 would probably buy it about the same graphics and processing power as are currently included in the Xbox 360. By then, Microsoft may have stepped up a level of sophistication.

Dawn Paine, marketing director at Nintendo UK, is confident that there is still a "huge appetite" for the Wii in its current form across the world."The Wii is still finding its way into new markets. It is being played more in public areas like pubs and we heard recently that it was used in a care home," she said.

However, Ms Paine admitted that the group is "always looking at developments".

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