Analysts: Nintendo Should Embrace Digital Releases for Wii U

The company needs to sell more games to improve bottom line

A number of industry analysts believe that Nintendo needs to make a big push for digitally distributed video games on its new Wii U home console in order to sell more games and improve its financial results.

Michael Pachter, an analyst watching the video game industry for Wedbush Morgan, even believes that there’s a small chance that a leadership reshuffle will lead to the company going platform agnostic, like SEGA did before it.

Speaking to GamesIndustry, the analyst says, “So long as Iwata is CEO, I don’t think there is a prayer that they allow their software to show up on third-party platforms. If they are considering it, we’ll see GBA software on mobile phones first… If Nintendo decides to go the way of Sega, it will be because a new CEO takes them in that direction.”

Jesse Divnich, who works for EEDAR, believes that hardware is crucial to the current Nintendo strategy and that the company has no process for launching its games on another platform.

He adds, “While I do agree that Nintendo should explore releasing products on other platforms, there holds a significant risk that it could marginalize the benefits of owning a piece of Nintendo hardware and could create a cascading impact on the health of their hardware division.”

Nintendo has already signaled a move towards more digital content, via the eShop that’s available on both the Wii U home console and the 3DS handheld and with a new open approach towards downloadable content.

But players who choose their hardware tend to be more interested in physical disks at the moment and the company might need to slash prices significantly or deliver more interesting offers in order to make digital distribution attractive.

Sony might offer tough competition via the PlayStation 4, which will probably launch in the fall of this year and will include Gaikai technology.

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