Wii wins over game makers

The Baltimore Sun

SANTA MONICA, Calif. -- In the competition among the makers of video game consoles, momentum is building for the Wii from Nintendo among its crucial allies: game developers and publishers.

Inspired by the early success of the Wii, companies that create and distribute games are beginning to shift resources and personnel toward building more Wii games, in some cases at the expense of the competing systems: the PlayStation 3 from Sony Corp. and Xbox 360 from Microsoft Corp.

The shift is closely watched because consumers tend to favor systems that have many compelling games. More resources diverted to the Wii would mean more games, and that would translate into more consumers buying Wii consoles later.

Jon Goldman, chairman and chief executive of Foundation 9 Entertainment, an independent game development company, said that he was hearing a growing call for Wii games from the publishers and distributors that finance the games his firm creates.

"Publishers are saying: Instead of spending $15 million or $20 million on one PS3 game, come back to me with five or six Wii pitches," he said.

"We had one meeting two weeks ago with a publisher that was asking for Wii games," said Goldman, who declined to identify the video game publisher that he met. "Three or four months ago, they didn't want to hear word one about the Wii."

The interest in the Wii follows a period of uncertainty about the console by developers and publishers. They were initially cautious because the Wii was less technologically sophisticated, and they worried that consumers would not take to its unorthodox game play, which uses a motion-sensing wand that players move to direct action on the screen.

History gave developers and publishers reason for caution, too. Nintendo Co. Ltd.'s last system, GameCube, was initially a hot seller but ultimately outsold - and by a considerable margin - by PlayStation 2 and Xbox. Also, Nintendo has historically made many of the popular games for its own systems in a way that has discouraged participation by other developers and publishers.

The shift does not represent any shunning of the Xbox or Sony consoles, but rather an elevation of the Wii's status - one that was clear in conversations with developers and publishers at E3, the video game industry's annual trade show in Santa Monica.

It is early in the current console product cycle, given that these machines are intended to be on the market for more than five years. Industry analysts say they do not expect to declare a victor anytime soon. Nevertheless, the trend is clear: Nintendo is getting growing support from game developers.

"We're seeing a big shift at E3," said John Davison, editorial director of 1UP Network, a network of video game Web sites and magazines, "and we'll see more later this year." Davison said he was seeing some game publishers putting less emphasis on the PlayStation 3. "But they're not going to talk about that," he added.

Since its appearance in stores in November, the Wii has been outselling the Xbox 360 as well as the PS3, which came out the same month as the Wii, and it continues to be in short supply. The NPD Group, a market research firm, reported that as of May Americans had purchased 2.8 million Wii systems, compared with 1.4 million PS3s. About 5.6 million Xbox 360 consoles have sold, but it hit the market a year earlier.

The Wii has clearly benefited from a price advantage; it costs $250, compared with $300 for the least-expensive Xbox 360 and $479 for the top-of-the-line machine. The PS3 sells for $500, after a price cut by Sony to clear inventory in advance of the Christmas selling season, when its new $600 device will be offered.

While the growing size of the Wii's customer base is attractive, developers are favoring Wii for other reasons. They are able to create games in less time than is needed for rival systems, because Wii's graphics are less complex.

Colin Sebastian, a video game industry analyst with Lazard Capital Markets, said that, in rough terms, it cost around $5 million to develop a game for the Wii compared with $10 million to $20 million to make a game for the Xbox 360 or PS3.

Because of its simpler graphics, development times for Wii games are also shorter. A Wii game can be created in as little as 12 months, said Kelly Flock, executive vice president for worldwide publishing at THQ Inc., a video game developer based in Agoura Hills, Calif. Games for the two competing consoles typically take two to three years.

He said the budget for a Wii game ranges from $1.5 million to $4 million, compared with the $10 million to $12 million the company spends on a PS3 or Xbox 360 game.

"The Wii is a godsend," Flock said. "We are aggressively looking for more Wii titles."

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