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Creutz: "The Wii bubble could be deflating"

Wii likely to be "a drag" on overall software sales this year, says analyst

Cowen Group analyst Doug Creutz has said the Wii bubble could be deflating as consumers plan to buy fewer Wii titles over the coming months than they did a year ago.

Using the results of a survey that quizzed console owners on their purchase intentions, reported by Gamasutra, Creutz noted that while PlayStation 3 and Xbox 360 owners planned to buy more games this year, Wii owners were cutting back.

This is partly because of the economic climate and the fact core gamers - the group least likely to curb their spending on games - are unlikely to own just a Wii, said Creutz. Over half of Wii owners also own an Xbox 360 or a PlayStation 3, and of those who own more than one console only 23 per cent considered Wii as their main platform, he added.

"While core gamers who own a Wii own more Wii games on average than casual Wii owners, the average title ownership spread between the two categories of gamers is much lower than it is for owners of Xbox 360 and PS3 console,"

Core gamers that own two or more consoles primarily own a Wii in order to play first party titles, Creutz concluded, adding: "We believe that the optics of the hardware cycle have been significantly distorted by the explosive growth of the Wii console."

As evidence, the analyst points to the fact that despite the Wii's driving of industry growth throughout 2007 and 2008 and its excellent performance in the US, its success does not correlate with strong rises in performances by US software publishers as a group.

"While we believe the Wii is likely to be a drag on overall software sales through the holiday, the impact should be limited to those publishers which have invested significantly in Wii development, with the biggest negative impact likely to be felt by Electronic Arts which (unwisely in our view) heavily invested in Wii development for [calendar 2009]," he said.

PlayStation 3 hardware fared best in the survey, with 21 per cent of respondents who didn't currently own one saying they plan to buy one this season - some way ahead of the 360's 12 per cent figure. Wii hardware still came out on top though with a 26 per cent intent figure.

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Kath Brice