"DS Hardware Demand Has Now Peaked Globally, Software Downturn To Follow"

The Nintendo DS truly opened up the gaming to a larger audience. Same for the Nintendo Wii. But are these new gamers actually gamers or are they simply passing through? In short: Is casual gaming a fad time bomb waiting to implode? Analyst Hiroshi Kamide from KBC Securities Japan states:

Casual gaming growth has been the primary driver for the industry over the last three years, the key player being the Nintendo DS. We believe DS hardware demand has now peaked globally. A downturn in software demand is likely to follow, as casual gamers are ‘happy with their lot' and do not need to consume more. We feel that the same predicament awaits the Wii console with its similar market expansion angle. Titles such as ‘Brain Training' and ‘Wii Fit' do not act as ‘gateway drugs' to turn non-traditional gamers to core repeat users. We feel this is a structural industry issue that cannot be easily changed.

Continuing, Kamide adds that he believes the industry is in for a slowdown after three years of strong growth. Yet, Kamide adds, "Despite low consumer confidence, we feel core gamers will remain relatively resilient in terms of demand for marquee titles." Meaning? In Japan, big games like Resident Evil 5, Street Fighter IV and Final Fantasy XIII should do well when released. Casual games? Well...

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