Nintendo in 'disarray' - Analyst

Wedbush Securities' Michael Pachter offers bleak outlook for Mario factory, believes Wii U "has to" launch at $250 to be viable.

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Nintendo's next-gen console, the Wii U, is due for a worldwide release this holiday, and one analyst thinks the company and the new system are in big trouble.

Pachter thinks Nintendo's best days are in the past.
Pachter thinks Nintendo's best days are in the past.

As reported by [a] list daily (via Industry Gamers), Wedbush Securities analyst Michael Pachter recently provided the keynote address at a San Francisco marketing summit and offered a less-than-rosy take on Nintendo's future.

"I think Nintendo's in disarray," Pachter said.

Speaking to the price point of the Wii U, Pachter found it "sad" that Nintendo has not revealed the system's sticker price yet. As for what Pachter believes the Wii U will cost when it does ship, the analyst noted that Nintendo "has to" launch the console at $250 if it wants to be viable.

"I think the idea that we don't know the price point yet, but we do know what the console is, is just sad," he said. I think they've completely blown that. It's gonna launch at $249; because it has to. They're dead if they launch at $259, I think they're toast then. I think they're toast anyway."

As for why Pachter believes the Wii U must launch at $250, he said, "I think the Xbox 360 with Kinect will be priced below that by the time they launch."

Xbox 360 Kinect bundles are currently available for $300 to $400. Price cuts for those bundles have not been announced.

Clarifying his comments in a NeoGAF post, Pachter said the "addressable market" for the Wii U is only half of the market size that existed for the Wii. He attributed this downsized market to his belief that the Wii's "casual" consumer base moved on to other platforms like Facebook, smartphones, tablets, or other consoles.

"Once they moved on, they are not likely to come back," he said.

As for Nintendo's portable gaming business, Pachter thinks this sector is in trouble, too, based on the rising presence of gaming on smartphones and tablets.

"The growth of smartphones and tablets has attracted many potential dedicated handheld game customers, and these people also are unlikely to come back to either 3DS or PS Vita," he said. "I think that the dedicated handheld market is permanently impacted by smartphones and tablets."

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