Is this BAD or GOOD for the Industry?

It's interesting that Todd Mitchell's analysis of Nintendo's success is labeled broadly as "bad or good" for the industry. I think the answer is probably more likely that it's good for the industry and bad for publishers. But really that "bad" for the publishers is good in the long run, because it's going to force them to think differently than they've been thinking for quite a while.

Of course the current generation of DS and Wii games coming out of Nintendo is going to sell well. It's some of the more innovative stuff showing up out there. Just like Little Big Planet is going to sell like hot-cakes or why Katamari or Shadow of the Colossus sold well. New and interesting.

Selling a derivative title on a system like the DS or Wii with all of it's available resources isn't going to entice consumers.

While this might "bode poorly for the publishers" right now, perhaps it will force them out of the current rut that they've fallen into lately. And of course Nintendo is going to have some lead time on everyone else. Isn't that why they keep it internal? It gives them some time to milk their product while everyone else catches up.

I'm not necessarily a fan of that model, but I understand why they're doing it. And long term, hopefully publishers internalize this new idea that thinking outside the box is good.

In the mean time Nintendo needs to do a better job of courting independents, getting them to bring new and innovative titles directly to them, because right now the big publishers just don't know how to handle this newfangled stuff.

Analyst: Are Wii And DS Good For The Market?

As reported, Nintendo's fiscal 2007 report showed 23.56 million DS units and 5.84 million Wiis sold, with 123.55 million units of DS software, and 23.84 million units of Wii software -- all far above original expectations from the company and analysts alike.

Much of that software success, however, came from Nintendo itself, with New Super Mario Bros. moving 9.5 million copies, Brain Age selling 8.1 million copies and Nintendogs pushing 7.0 million, with newcomers Pokemon Diamond and Pearl already selling 5.2 million in Japan alone. Wii software, too, was similarly first party dominated by The Legend of Zelda: Twilight Princess and unbundled versions of Wii Sports.

All of this, says Mitchell, leads him to believe that "Nintendo's success with the DS and Wii bodes poorly for the publishers."

"Both [the Wii and DS] appear to be bringing new gamers into the market. However, this may not be a positive dynamic for the major video game publishers. Nintendo has not only increased the size of the market, but it has also re-segmented it in its own favor, in our view," he said.

"Nintendo is dominating software sales on its popular hardware platforms, leaving the publishers with a smaller slice of an only somewhat incrementally larger pie," added Mitchell, "Moreover, we feel that the likely shorter product cycles of Nintendo's platforms puts the publishers in a permanent catch-up mode."

Despite the ramp up of various third party publishers turning more development efforts to both the DS and Wii platforms, Mitchell concludes that Nintendo's domination of the software landscape isn't a trend due to end anytime soon, adding, "the upcoming releases of Super Mario Galaxy and Metroid Prime 3: Corruption will highlight this phenomena this holiday season."