Game Publishers Want a Wii Bump

The Nintendo Wii must be one of the most fawned-over products in the history of the video-game industry. The Wii's motion-sensing controller makes for great talking points, and along with the DS handheld, marks a huge comeback for the company that dominated the video-game industry in the 1980s.

While I've been a bull on the Wii, I feel compelled to point out a major problem surrounding the platform, which is the utter lack of hit third-party titles, and the potential negative impact on the industry's third-party publishers like Electronic Arts (ERTS - commentary - Cramer's Take).

Month after month, the Wii outsells the competing Microsoft (MSFT - commentary - Cramer's Take) Xbox 360 and Sony (SNE - commentary - Cramer's Take) PlayStation 3 consoles. However, Nintendo has been completely dominating Wii software sales to the point where I haven't seen a single third-party hit.

Month after month, it's either Mario Party or Super Paper Mario or Wii Play or Pokemon or Zelda topping the Wii sales charts. Since its November 2006 launch, Nintendo has averaged a whopping 53% U.S. monthly market share on the Wii platform, vs. an average of 19% share for Microsoft on the 360, and 26% share for Sony on the PlayStation 3, according to data from The NPD Group courtesy of Merrill Lynch research reports.

So why aren't there any third-party hits on the Wii, despite the fast ramp-up of hardware sales? Why isn't any software publisher saying, "We had a great quarter because of title X on the Wii"?

A lot of Wii owners are very casual players and may simply have no urge to play or buy video games on a regular basis. These people may be inadvertently keeping Wiis out of the hands of Nintendo fans or more serious gamers who would buy more games.

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In keeping with TSC's editorial policy, Michael Comeau doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Comeau is a research analyst at TheStreet.com. In this role he performs stock analysis for TheStreet.com Breakout Stocks, and is also a regular contributor to RealMoney.com. Prior to his arrival at TSC in June 2004, Comeau worked as a Consultant to Toyota Motor North America, performing in-depth research on automotive industry issues, primarily in the areas of alternative engine technologies, competitive analysis and macroeconomics. His primary market interests include consumer technology, specialty retail, and small-caps. Comeau received a bachelor's degree in Finance from Brooklyn College, and has completed Level 1 of the CFA program.. He appreciates your feedback; click here to send him an email.