Nintendo's Low-Tech TV Is Long On Charm

Nintendo's Low-Tech TV Is Long On Charm
You almost have to feel sorry for Microsoft and Sony. After pouring powerful technology and all sorts of extra features into their video-game consoles, the comparatively simple Nintendo Wii and its cutesy family-oriented games proved the bigger hit with consumers. Now Nintendo wants to put pressure on its rivals with a dedicated video service, one that seems riddled with technological and content-related weaknesses but which might still win over consumers with its low-tech charm and demographic reach.

Nintendo's planned video-on-demand service--reportedly called "Wiinoma"--has some obvious disappointments. It is so far only slated for launch in Japan, potentially excluding a large chunk of Wii owners. Even if the service spreads to Europe and the United States later in 2009, don't expect to be watching favorites like Lost or The Wire straight away. Only videos exclusively made for the Wii will be available, with media firms like Fuji Television (other-otc: FJTNF - news - people ) and Nippon Television (other-otc: NPTVF - news - people ) reportedly planning cartoons, entertainment shows and other original programming for the launch.

The Wii console itself has its limitations when it comes to video playback, a sign that Nintendo (nasdaq: NTDOY - news - people ) never really intended to sell it as a mixed-media box. You can't play DVDs on the Wii, and its puny 512-megabyte storage memory is barely enough to store game downloads and save positions--let alone video footage. Trying to sell the Wii as a video-focused console will therefore be tough, no matter how many Japanese cartoons or cookery shows are available for streaming.

Compare this with the Sony (nyse: SNE - news - people ) Playstation 3 and Microsoft (nasdaq: MSFT - news - people )'s Xbox 360, which have trailed the Wii in worldwide sales since 2007. Both consoles can play DVDs, both offer movie downloads and both have online video stores selling television shows from the likes of Fox and TimeWarner. Hard-drive space varies, but customers can upgrade at their leisure or fork out for a big-memory bundle: the Xbox 360 offers a 120-gigabyte model, while the Playstation 3 can be bought with 160 gigabytes of storage space. Wii users are stuck with their 512 megabytes.

But Nintendo is no fool, and the company might find a different kind of advantage in a stripped-down, exclusive-for-Wii video service. Advertisers are already interested by the Wii's success, given that advertising agency Dentsu is launching the channel with Nintendo, and free-to-watch videos may end up doing more for the Nintendo brand and its products than pay-per-view movies and television shows would.

"Nintendo could have an advertising advantage," said Michael McGuire, an analyst with Gartner Research. "With the interactive nature of the games, you've got Wiis that are in homes and exercise classes, and that's a pretty interesting demographic."