Nintendo Wii Parts Suppliers Hit by Sales Slump

A widely distributed report from the Japanese Nikkei site is saying that two companies deeply involved in creating components for the Nintendo Wii, Mitsumi and Hosiden, have been heavily hit by the decline in sales that the home console has seen this year, with revenues declining by as much as 50%. The two are said to be scaling back their output and if the current trend holds, their existence might be threatened.

They are stating that part orders are down 30% this year over the previous one and the Nintendo Wii is facing tough competition from both the Xbox 360 from Microsoft and the PlayStation 3 from Sony during this holiday season.

The Wii has had a tough year. After dominating the market in 2008 because of its lower price and of its motion tracking control scheme, the console was overshadowed this year by the new PlayStation 3 Slim, which is smaller and consumes less power, and by the price cuts that both Sony and Microsoft enacted in the last few months. Nintendo has sought to portray its device as immune to the moves of its rivals but in late September, it also cut its price in order to make it more attractive to gamers.

Recent reports are claiming that sales in the United States have gone up by 85% since the smaller price tag was announced, but clear indication of the performance of the Wii will arrive once the NPD Group announces its figures for November in a few weeks’ time. Recently, Satoru Iwata, who is the president of Nintendo, was quoted as saying that sales of the device in Japan “cannot be defined as healthy” and the company is trying to drive up sales by releasing titles like New Super Mario Bros. Wii and unveiling a new Zelda title set to arrive in 2010.