Nintendo becoming “niche,” another big company sale, and other 2013 Baird predictions

baird
Jan
14

Nintendo becoming “niche,” another big company sale, and other 2013 Baird predictions

baird Nintendo becoming niche, another big company sale, and other 2013 Baird predictionsAnalyst Colin Sebastian with Baird Equity Research recently listed nine predictions for the video gaming industry this year. Some are rather safe bets (Microsoft and Sony debuting new consoles at E3), but others are worth digging into a bit deeper.

It’s not a surprise his first three predictions all revolve around the next Xbox and PlayStation. Those announcements, which are expected to come this summer, will make E3 “the most important game conference since Y2K” according to Sebastian. If the consoles have even the slightest hint of “broad consumer appeal” that means good times for the video gaming industry: Sebastian predicts a price point around $350-$400, with sales staying relatively flat for the first year and picking up speed in 2014.

However, a lot of who wins that battle will be who can keep up with demand. Sebastian’s analysis suggests the next-gen systems will mirror the guts of high-end PCs, and include improvements both for motion as well as voice controls. His early looks seem to indicate trouble for Sony, though, and lead him to believe there could be trouble getting those high-end components in enough quantity (or the right price point) to keep the PS4 on-time for launch and in stock.

Meanwhile, Sebastian continues to see the battle for the living room heating up as mobile and iOS games make the shift to the big screen. He predicts Apple will upgrade their AppleTV box to allow gaming with a controller, potentially competing with Valve’s “Steam box” concept for digital-download space in your entertainment center. On the digital distribution front, meanwhile, Sebastian thinks the new consoles will actually keep brick-and-mortar stores relevant, at least for a few years, since that’s still where most console owners get their games from.

Which brings us to two interesting predictions about the gaming industry landscape as a whole. First, Sebastian predicts if Nintendo doesn’t get its act together, it will turn into a “niche” gaming company:

We remain concerned that Nintendo’s innovative Wii-U console will lack broad appeal beyond the core Nintendo fan base,” he wrote. “Following a somewhat lackluster launch and holiday selling season, Nintendo will need to bring to market major first-party releases (e.g., Zelda) and retain the support of key third-party developers to reduce market share losses. In a negative scenario, Nintendo will be forced to prematurely lower the Wii-U price, and over the course of this cycle, we expect consideration will be given to extending first party franchises to other platforms.”

Secondly, he sees another big video game company sale on the horizon. He specifically called out Take Two and Vivendi’s share in Activision as possibilities, but also suggested mobile gaming companies or mobile arms of larger companies could be hitting the marketplace in 2013.

So what do you think of these predictions? Have any yourself? Leave them in the comments below!

[via GamePolitics.com]

About Russell Jones

By day, Russell works in local TV news. By night, he plays and writes about video games for VGW and his personal blog, The Gentleman Gamer. An avid RPG fan, Russell can also be found plotting the demise of adventurers from behind a Dungeon Master's screen. He can be heard weekly on the "Geek In Review" podcast (GiRPodcast.podomatic.com).

One Comment

  • nuttyriv3r
    Jan 14, 2013 @ 13:05 pm

    Personally I think he is attempting to strong-arm Nintendo into providing returns for investors. We will need to see a lot of patriarchs die off before Nintendo will ever do this. The marriage of their hardware and software is too interwoven – each fueling one another. Additionally, this would alienate their core fan base causing a lot of rebellion, offsetting any gains from other systems.

    They could avoid this by properly opening up their vault and doing more classic releases a la Disney style. The Virtual Console on Wii U needs to get done pronto with GameCube support.

    By the way, Sega really doesn’t look like it’s doing that great anyway [http://www.segasammy.co.jp/english/pdf/release/20132q_tanshin_e.pdf]:

    “In this business environment, net sales for the first half of the fiscal year ending March 31, 2013 amounted to ¥136,583 million, a decrease of 10.5% for the same period in the previous fiscal year. The Group posted an operating income of ¥7,892 million, a decrease of 48.0% for the same period in the previous fiscal year. The Group recorded a net income of ¥3,874 million, a decrease of 2.7% for the same period in the previous fiscal year. “

    Reply

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