Too early to judge Wii U’s ‘long-term potential’, argue analysts

The first round of Holiday sales numbers are in; the Wii U sold 400,000 units while the Xbox 360 sold a whopping 750,000 units. Although shipping shortages are to blame for the Wii U's somewhat pedestrian sales, many have been quick to write it off as a flop. EEDAR analyst Jesse Divnich is a believer that it's still too early to make any declarations of the Wii U's "long term potential", but did recognize that the Wii U's shortages could boost sales for the Xbox 360 and PlayStation 3 – especially given the steep discounts both consoles have seen.

"If we had to estimate, about 400k units of the 750k Xbox 360 units were from new consumers who did not own an Xbox 360 prior vs. the Wii U where 400k consumers did not have a Wii U prior. So in terms of who picked up the most new consumers, it's probably a dead heat. And of course there were about 200k to 300k consumers who couldn't even purchase a Wii U due to shortages, so I do have to wonder if the Xbox 360 and PlayStation 3 picked up some users due to the Wii U shortage," observed EEDAR's Jesse Divnich.

"It's a little too early for us to make any declarations on the Wii U's long-term potential," he explained. "They are off to a fair start and it will probably take another month to gauge where demand may be long-term for the Wii U."

RW Baird's Colin Sebastian added, "I do think the Wii U faces a lot of challenges, but one week's wroth of data isn't enough to put the nail in the coffin."

IDC research manager Lewis Ward brought up a good point, recalling when the PS2's initial sales exceeded the original Wii.

"Look at this another way: In late 2006, PS2 sales exceeded those of the Wii by a healthy margin – does that mean Nintendo should have thrown in the towel on Wii? Of course not," Ward defended. "We've just seen the launch of brand new platform that will have growing pains and it's like judging a book by its cover in the extreme to draw long-term conclusions from Black Friday sales alone."

400,000 units sold is nothing to scoff at, especially in comparison to the Wii which sold only 75,000 more during its launch week — and look how that turned out. I'm of the belief that it's still too early to make any rash judgments. The Wii U hasn't even launched in Europe yet, so let's wait before we call it a failure out the gate. Nintendo is obviously in it for the long-haul, and as analysts I think we should be too. It's clear we're going to wait several more months to properly assess the Wii U's success.

[GI.biz]