Nintendo Courting Media Partners for New Wii

Japanese game company looking to take page out of Xbox's strategy

The Xbox 360 is proving to be such a popular media entertainment device that even Nintendo wants one of its own.

The Japanese gaming giant has begun preliminary conversations with several major media companies, exploring possible content distribution partnerships for the upcoming Wii U, the sequel to Nintendo’s smash hit gaming console.

According to multiple sources, Nintendo is eyeing the Xbox’s expansion beyond gaming and is looking to emulate its strategy for the Wii U. In recent years, consoles like the Xbox 360 and PlayStation 3 have become centerpieces of the digital living room, i.e., Internet-connected devices where people do every thing from play games, stream movies from Netflix, watch Blu-ray DVDs, purchase TV episodes and communicate with their friends across social networks.

Xbox in particular has emerged as a leader in this arena. Its Web-based Xbox Live service now claims over 40 million subscribers and is a favorite among advertisers. More recently, Microsoft has looked to make Xbox a cable box replacement by inking deals with cable companies Comcast and Verizon. It’s also morphed into a robust TV app marketplace, with partners such as Major League Baseball, SyFy, HBO, MSNBC, Epix and BBC, as well as a cutting-edge outlet for interactive ads. Microsoft’s much anticipated NuAds will incorporate the gesture and voice-driven technology enabled by Xbox Kinect.

Meanwhile, the Nintendo Wii, while still selling well, seems left in the dust. It’s wireless, motion-based remote controls, once innovative, feel less revolutionary next to Kinect. At the same time, even though the Wii was one of the first devices to offer users access to Netflix’s streaming service, few Wii owners even connect their consoles to the Internet, limiting how core the Wii can become to the digital living room experience.

Thus, the word is that Nintendo wants to take a page out of Xbox’s playbook for Wii U, which is expected to be the only major console launch in 2012. One source said that Nintendo is even considering a similar deal with Comcast to become a cable TV distribution.

Per multiple sources, Nintendo executives did arrange meetings with “a select number of top content companies” including multiple cable networks and Web video producers at the Consumer Electronics Show in Las Vegas last month, focusing on sports and music content. In fact, Nintendo had previously reached out to a handful of Web video companies for the launch of the company’s underwhelming handheld device the Nintendo 3DS; the idea was to feature 3-D video content, but those talks went nowhere. Last week, Nintendo did announce a distribution deal with Hulu for the original Wii, perhaps a sign of things to come (officials at Nintendo declined to comment).

As for what content may end up on the Wii U, it’s early, as one source emphasized. “This is very preliminary,” he said. “It could go nowhere.” Why? For one, content is not in Nintendo’s DNA. The company has been perhaps the most reluctant of the big game device manufacturers when it comes to the media business. Another reason? The Wii has previously been a family-driven console, while Nintendo apparently wants to entice young males to the device—the same crowd drawn to Xbox.

Wedbush analyst Michael Pachter hadn’t heard about Nintendo’s overtures to the media business, but label him a doubter. “I don’t know if they have the chops to pull it off,” he said. Pachter’s not even sure about the prospects of the Wii U as a gaming platform. “I don’t think game publishers are going to support it.”

One group that might support Nintendo is the ad community, which has been shut out of the Wii since it launched. Advertisers would love to target the Wii audience, and its whimsical games would seem to be well suited for brand integrations compared to hard-core fantasy titles like Xbox’s Halo series.

Yet to date, Nintendo has not show any interest in in-game advertising. That may soon change. Regardless of whether it signs on any big media partners, the company is set to roll out the seemingly ad-friendly Nintendo Network sometime this year.