Nintendo Wii Losing Its Shine

Nintendo’s innovative, inexpensive Wii gaming console has been the hottest thing in gaming this half of the decade. But the Wii is starting to lose its shine.

Yes, it’s still the top selling game system and software platform: Nintendo sold 340,000 Wiis in the U.S. last month, beating Microsoft’s Xbox 360 2-to-1 and Sony’s PS3 almost 3-to-1. And three of the top four games were for the Wii: Nintendo’s Wii Fit, Mario Kart, and Wii Play.

But Wii sales were down a shocking 52% year-over-year in April, its second straight month of decline. In a report today, Citi analyst Brent Thill says this is notable because the Wii is no longer supply-constrained, is relatively cheap, and didn’t have to compete with huge games on other consoles, such as Grand Theft Auto 4.

The good news: Nintendo’s new Wii Sports Resort, launching this summer, and new Wii MotionPlus motion sensor add-ons might rejuvenate interest.

Also, it would be a good idea for Nintendo to figure out some strategy of using the Wii for online video, such as hooking it up to services like Amazon (AMZN) or Netflix (NFLX).

Some 29% of U.S. 25-to-34-year-olds with game consoles use the devices to watch streaming video off the Internet, according to In-Stat. Netflix has an exclusive with Microsoft’s Xbox 360 for now, but has said its long-term plan is to be on as many devices as possible; presumably, including other game consoles. That’s a great place for Nintendo to start.

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