A video game sequel beats tough sales expectations and helps define the future of gaming platforms. The stock of the game maker climbs.
I'll give you one guess, with this caveat: The game is not Grand Theft Auto IV. The company is not Take-Two Interactive.
It's Mario, and the company is Nintendo.
The Wii is winning. April sales figures showed that sales of Microsoft's Xbox 360 and Sony's PlayStation 3 consoles fell short of some analysts' estimates despite endless hype surrounding the release of GTA IV, which may be the biggest game of 2008.
By contrast, Nintendo sold 714,000 Wiis in the month, way ahead of analysts' estimates of around 600,000, even as manufacturers hustle to make sure demand can be met. Two new titles—Mario Kart Wii and Super Smash Bros. Brawl—posted great sales over the past couple of months, too. Mario Kart hit 1.1 million units in the month with little fanfare.
There could be an even bigger coup coming: Today, Nintendo released Wii Fit in America. The title has sold more than 2 million copies in Japan and comes with a balance board on which you do workouts. It could be the first video game ever to successfully get couch-potato gamers up and moving.
Seeking Alpha's Seth Gilbert helpfully lines up the April results from NPD Group, which put Mario Kart squarely behind GTA IV as the month's No. 2 seller, with Wii console sales blasting past the competition. Here's his chart.
April Hardware Sales (in units sold) (March Results)
- Wii: 714,000 (721,000)
- Nintendo DS: 415,000 (698,000)
- PlayStation Portable: 193,000 (297,000)
- Xbox 360: 188,000 (262,000)
- PlayStation 3: 187,000 (257,00)
- PlayStation 2: 124,00 (216,000 )
Wedbush Morgan analyst Michael Pachter recommends buying Nintendo (his only platform pick) "opportunistically" plus game makers Activision, EA, THQ, and Ubisoft even as the industry considers how the uncertain economy will affect sales for the rest of the year. Pachter expects strong game sales to continue through the year on the back of new games and better hardware availability.
Nintendo shares surged to around 72 as the Wii gains more traction, closing in on all-time highs just above 78. They recovered after a scary dip to around 54 in January, when tech shares sank with the rest of the market.
Meanwhile, Take-Two is still being pursued by EA, which extended its buyout offer, according to the Wall Street Journal.