"I wouldn't shed a tear if there was a reduction of budget software targeting Wii. Retailers, already under enormous pressure, could do with a more focused offering from the publishing community for Wii. Budget software obviously plays a very important role in the marketplace for certain games purchasers, but I question whether such large volumes are a healthy or sustainable phenomenon, especially if it raises the specter of consumer confusion and disenchantment. "

THANK YOU! At least one of you gets what's going on. The first two analysts feel like there JUST looking at the numbers, but Ed takes a look at consumer reaction. All of these "budget" (read: crap) games are diluting the Wii, and Nintendo needs to address this problem. Thankfully, Sega is trying hard with House of the Dead and The Conduit. Here's hoping more developers see this and take action.

I wonder if Pachter is looking at anything besides numbers, and if he has anything to back up why he would suggest more people buy the Arcade unit of the Xbox 360. It is a worthless device solely because it does not come with a hard drive. I'm all for more and better games on XBLA, but these games are getting bigger and bigger, and the 256 Mb memory stick that comes with the Arcade unit will fill up WAY too quick, even compared to the 512 Mb hard drive on the Wii with Virtual Console. Sadly, Pachter suggests there are so many un-informed people out there that would purchase such a worthless device. Sad, but maybe true. Hopefully, the consumers prove him wrong, and Microsoft gets rid of the Arcade unit, and drops the 20 Gb unit to $250 - something that seems much more logical than trying to continue to push the Arcade sku.

Nintendo has to come up with some killer apps for the Wii or it can have an impact on the whole industry. The sell-in rate for Wii last time I checked was alarming, but not as alarming as all the mediocre software lining the shelves at Target and Wal-Mart. Many of the "casula gamers" buying Wiis seem to not research software, buy something with a cover they like, realize it sucks, and go back to playing Wii Bowling. Industry insiders and hardcore gamers understand why, but market analysts on Wall St. do not - which may impact the industry as a whole.

It is unfortunate developers and publishers are so rarely putting their best team on Wii games. I'd love to see what would happen if they did.

Jonathan, I wouldn't necessarily say the Arcade SKU is "worthless". After all it has helped Microsoft provide more people the ability to play any Xbox 360 title for a good value. It's not like you can't add a hard drive later.

That's not to say that the Arcade SKU is amazing, but I'd say "crippled" is a good word to replace your "worthless".

Jonathan, that is the work of analysts, to analyze numbers, because numbers are the cold facts. Let's remember that PlayStation 2 had maybe a 5% of memorable games, with the rest being budget titles. In fact, one could say that only the number one console gets the budget titles. It would be nice if they were to invest more, but I guess they are still drooling and scratching their heads wondering why Wii is moving the hardware at the pace it is and why it will soon have a larger install base that the HD ones, the consoles they bet on early.

The arcade is selling at a higher pace than the Premium or Elite ones, that explains why the average retail price of the Xbox 360 has been dropping month after month (as stated at http://www.gamasutra.com/view/feature/3906/npd_behind_the_numbers_december_.php?
page=2 ). Consider this: the amount of hardcore gamers is limited, and most of them have already bought a PS3 and/or a Xbox 360 3 or 4 years into the life of each console (especially if we consider a new console may be coming in just 2 years). Microsoft would have dropped sales from 2007 to 2008 hadn't it been for the price cut (which entitles casual users to buy it). That is where the Arcade is useful: attracting casual users. Sure, it may not match an Elite with a 120gb, but don't compare the hardcore needs with the casual needs.

Tom, that is how the casual market behaves. It only takes Oprah Winfrey mention a book to make it a best-seller, doesn't matter if it is actually good or interesting. Name recognition is half a sale. Having a game sponsored by Jillian Michaels is more important than one by Sid Meier. Also, you may give too much importance to industry insiders and hardcores. Without the casual market, the console leader would end up selling 30m-50m consoles only.

No matter what the console or device (ipod) the popularity of the platform is directly tied to the amount of market saturation in the software space of the platform. This is what I call the Me Too Phenomenon (tm), where a popularity trend is noted by product producers and in response they put their own product over there thinking they are taking an advantage of a new growing marketplace. Only realizing after the release, that yes their colleagues do in fact read the same market analysis and had the very same/similiar ideas for releasing a product. I like Jung's Synchronicity theory to explain why people have the same ideas even though they are completely unknown to each other. Does that mean that the market will stay saturated? Not necessarily, those game will just serve as a backdrop to push the hardware sales ("wow there's so many games over here I must buy this platform"), and the casual gamer will start doing what hardcore gamers do and that's pay attention to product literature and commercials telling them which games out of the many to buy.

@ Russell - Because Wii games are so much cheaper to produce. A publisher has to put their A-Team on the 360 or PS3 games because they do not want to give their B-team the 30 million dollar budget to make their 360 offering for the year.
I'm not saying that's right though. I thought that the lower cost of production for Wii would create a wide variety of new games by indies. Instead, Wii has a staggering amount of crap. I wonder if the Wii had a more integrated Demo or User Rating mechanism built in if that would help at all.

Also I just want to say that it would be better if the consumer did forget about their Wii or Iphone (well that's less likely) and left it over the to collect dust, hopefully not selling it. That way when a game peeks out from under the junk pile, they can say "Oh yeah I have one of those things that play that but haven't used it in like forever" and the demand for a single good product will be large enough to create a hit.

It's interesting how the comments have turned out. The article covered the entire industry; yet--the comments focus on complaints from the small "hardcore" crowd about the Wii.

Ask yourself a question: Is the Wii really not good enough for you... or are you a pretentious elitist "hardcore" geek?

Get over yourselves.

I'd say I'm a pretentious elitist "hardcore" geek. Oh is that bad? Ok then I'm just kidding I'm the opposite... what is that a humble modest softcore pornstar? Sweeet.

"All of these "budget" (read: crap) games are diluting the Wii, and Nintendo needs to address this problem. Thankfully, Sega is trying hard with House of the Dead and The Conduit. Here's hoping more developers see this and take action."

I'm fairly sure Nintendo doesn't care very much about 3rd party software on the Wii. It's not affecting their first party software sales, so I'm not sure what they'd do to "address the problem." They make off licensing, I believe, regardless of 3rd party game quality, so more of them is good for them.

"It is unfortunate developers and publishers are so rarely putting their best team on Wii games. I'd love to see what would happen if they did."

I've seen what happens when a great team is put on a Wii game... you probably wouldn't be as impressed as you think.

Bob, while I agree with you and the article to an extent, knowing full well that it is purely a speculative piece from analysts that base their jobs on numbers, one has to agree profit - in the long-term - does not just coming from sales, but also a relationship with the customers.

Especially in these days, market perception will eventually play into how well the Wii sells in the future. Is it a fad? When does it not become a fad? Will Wii Motion Plus split the divide of "hardcore" and "casuals" further, or will it pull a Wii-Play and sell like hotcakes through out the year?

The main point I want to re-express here is to give a nod to Barton because he's not only looking at the numbers, but sees that the perception of Wii among "hardcore" gamers and most gaming press is becoming somewhat negative. As a consumer, and a "pretentious elitist hardcore geek", I appreciate the fact that he's not just consumed by the numbers and sees that perception does indeed tie into market share and profit.

Just look at Sony, posting their biggest loss in almost 10 years. Now, there are certainly other reasons that negative perception that account for their losses (i.e. price, lack of "good" exclusives), but it has to be said that the perception of Sony ties directly into their sales. And hey, my failing might be that I'm giving too much weight to perception in a business that more recently prefers profitability over evolution (save the occasional Miyamoto game), but the fact that Barton acknowledges this shows me he is more in tune to the industry than Pachter or Divnich, and I thank him for that silver lining he gives us consumers.

Is it just me, or does Michael Pachter look like John Larroquette from a mid 80s episode of Night Court?

People often miss the most important reason why Nintendo is successful, so successful that us whiny hard-core gamers still buy a Wii despite our complaints. Nintendo is the only console manufactureer that does a good job of creating a good cast of interesting characters with a variety of different but often overlapping franchises with addictive gameplay (they can thank Miyamoto for that). If Sony and Microsoft actually saw this and found a Miyamoto of their own to guide creative developement of their own IPs and hardware, they would easily trounce Nintendo and us whiny hard-core guys wouldn't even own Wiis. The moral here is that Sony and Microsoft have a lack of directed IP creativity within their own companies.

Pachter: "those who intend to play online and who cannot figure out how to connect to the Internet with a cable"

Err... or we already have a WiFi network, and prefer that to running a physical cable 40 feet across the house. Some of us don't live in a bedroom in our parent's house anymore, Michael. OK, my old XBox 360 is cabled... right into the Airport Express one foot away in my home theater and then wireless bridge to the main WDS node. Seriously, what's the intersect between the set of people unable to figure out a cable and the set of people with a home wi-fi network and the ability to retrieve the hexed up password?

I would agree with Raymond in the fact there is no "tie-that-binds" in the IP character cast of either Sony or Microsoft. There is too much fragmentation of the IP's and it doesn't help that many of the cast of characters aren't that interesting or compelling. Although to be fair I don't think Miyamotos are growing on trees nowadays. :)