LOS ANGELES (RNN) - Nintendo investors are less than impressed with the company's new Wii system, and worry that device-based systems will not be able to compete with social networking, smartphones and tablet PCs.
The new system, called Wii U, was unveiled in early June at the 2011 Electronic Entertainment Expo, known as E3 in gaming circles. The expo is a forum for software and hardware developers to show off their latest gaming products.
Nintendo Co. shares closed at 16,970 yen ($212.44) on June 8, down more than 5 percent in anticipation of the new system. The benchmark Nikkei 225 index ended flat.
Shuji Hosoi, analyst at Daiwa Securities Co., told the Associated Press it is hard to see how Wii U is different enough to woo users of smartphones and tablet PCs back to gaming, he said.
"People are puzzled whether this will really sell," he said.
Hosoi acknowledged the stock price may recover if Kyoto-based Nintendo could convince investors that the new machine was as fun as smartphones and other new devices.
"But it would be extremely difficult because the competition is so intense," he said, referring to products such as the iPad from Apple Inc. and other rivals. "People have already changed."
With only Nintendo announcing an upgrade for its traditional video game console, and with the rising popularity of tablet and smartphone games, many are wondering where traditional gaming will go from here.
Nintendo released its 3DS handheld console in North America in March 2011. According to Nintendo, the 3DS features a 3D screen that doesn't need special glasses to view and can take 3D photos. During E3 the company announced five major titles for the 3DS's currently slim selection of 3D games, including Starfox, Super Mario, Luigi's Mansion 2, Kid Icarus: Uprising and Mario Kart.
Nintendo is the only mainstream gaming company with a 3D system on the shelves. Bill Gardner, founder of Digital Media Insights and former CEO of Capcom USA/Europe, said 3D gaming for traditional consoles could become a possibility in the near future – if 3D TVs can find their ways into more living rooms.
"Currently, there are not enough compelling 3D applications to make it highly successful. However, slower sales of 3D Television sets may slow the introduction of 3D consoles. [It's] tough to determine yet," Gardner said in an email.
Rhodri Marsden wrote on The Independent that electronic companies have invested too much into 3D for it to fail or be a passing fad.
"There's a lot riding on this incarnation of 3D, with a large number of technology and media companies very keen to sell us both the equipment and the entertainment. The statistics from television manufacturers, presented with a proud flourish, show that our purchase of 3D televisions is rising dramatically," he said.
Marsden goes on to describe some examples of why 3D entertainment might be on the slide downward, including mixed reception to the movie, Pirates of the Caribbean: On Stranger Tides, which can be seen in 3D.
Tablet and Smartphone Gaming
Gardner said tablet and smartphone gaming has a 50/50 chance of toppling traditional gaming.
"[Phone and tablet] games are far less complex and have a ridiculous cost model that cannot possibly sustain the development industry," he wrote. "Tablets and phones are not dislodging traditional 'gamers' but are instead attracting multitudes of the non-core gamers, females and older, casual gamers."
But Fox News tech writer John Quain said tablet and smartphone games are taking even hardcore gamers' time away from traditional consoles.
"Tablets and smartphones also have the distinct advantage of being portable ... Certainly there's room for some dedicated portable game devices, but consider what's happened to camcorders, cameras, and MP3 players: many of us just use our smartphones to do it all now," he wrote on the Fox News website.