Rumor: Nintendo to have new Wii 'by 2011'

Update at 2:10 p.m. PDT: This story now reflects Nintendo's response to a request for comment.

If there's one thing that's sure to get video gamers talking, it's a rumor that there could be a new Wii, Xbox, or PlayStation console on the horizon.

Well, the hot topic of discussion du jour is that there could be a new Wii by 2011, according to a post on the blog What They Play.

That site "has heard from multiple sources in the game development and publishing community that Nintendo is currently showing early presentations of its next home console hardware. Apparently set to hit the market 'by 2011,' the device is said to be the true 'next generation' Nintendo console, and far more than a simple refresh of the current (Wii) hardware."

The post continued, asserting that this rumored new device could have high-definition capabilities, as well as a "greater emphasis on digitally distributed and backwardly compatible content."

For its part, Nintendo said it does not comment on rumors.

It could be mere coincidence (because odds are that even if the rumors are true, Nintendo wouldn't want to confirm them for quite some time), but on Thursday, the company is hosting its annual media day here in San Francisco. And I'd been told that it would "have news" it would be releasing at the event. Until now, I'd assumed the news would be something only minimally consequential, but of course, announcing a new Wii development project would make a few headlines, I would think.

More likely, the news that Nintendo will put out Thursday will be about a new multimedia DS handheld device, such as the one the video game blog Joystiq says could be unveiled at a separate press event in Japan Wednesday night.

Still, if the new Wii rumors are true, it will be a long time before Nintendo would be ready to unveil any details--think maybe the Game Development Conference in March, 2009, or E3 next July. Or possibly not even then.

One big question is why Nintendo would be rushing to put out a new console when the Wii is selling at unbelievable levels, far outselling Microsoft's Xbox 360 and Sony's PlayStation 3. In August, according to industry analysts The NPD Group, the Wii sold 453,000 units, while the Xbox moved 195,000 and the PS3 just 185,000.

Of course, as has been made abundantly clear over the last year or so, many people don't consider the Wii to be a direct competitor to the Xbox and the PS3. Rather, some see the Wii as complementary to the other two consoles, despite the fact that before any of them hit the market, all three were touted as "next generation" devices.

But the Xbox and the PS3 are both HD consoles that provide very high-quality graphics capabilities. By contrast, the Wii's graphics are not nearly as powerful; instead, the console's success is based mainly on its innovative motion-sensitive controllers.

Some gamers, however, would most likely love to see a console from Nintendo that can offer high-quality graphics and HD capabilities, which is why any new Wii, such as the one talked about in these rumors, centers on that functionality.

It would be fair to ask why a Nintendo console would need HD capabilities, and the answer there could easily be that just because any new device had them doesn't mean all new games for it would have to take advantage of them. Some could, however, and I'm sure gamers would like the variety of choices that such a development would offer.

Price-wise, however, it's hard to see how a new Wii device would make sense. One way the Wii has arrived at its dominant position--one few expected before the three consoles hit the market in 2005 and 2006--is by having the lowest price.

Now, however, the lowest-end Xbox costs less than the Wii. Last month, Microsoft said it was lowering the price of the Xbox Arcade to $199, becoming the first next-gen console to break the $200 price barrier that many industry observers feel is the magic price point that opens up a market to mass consumers. The Wii still costs $249.

But in my opinion, that $50 price difference would not be enough to discourage Wii buyers--holiday 2008 sales will tell the story, I suppose--and I expect that in the near term, Nintendo will continue to see its sales be an order of magnitude higher than the Xbox or the PS3.

And over the next couple of years, the Wii's price could drop further, joining the Xbox below the $200 threshold and ensuring continued strong sales.

So why would Nintendo want to put out a new console that would almost surely cost more?

That's the question I think is hard to answer. The company would almost certainly have to subsidize the price to keep it low, and as long as there wasn't yet a new Xbox or PlayStation--some think Microsoft may have a new device in the works, while almost no one foresees a PlayStation 4 any time soon--a new HD Wii would mean that Nintendo would have to lose money in the short term to build market share with a new device, even as the Wii would likely still be selling well.

All in all, it's hard to know how to take rumors like these. There are certainly some reasons to think Nintendo would want to go this direction, and there are other reasons why it wouldn't.

Eventually, of course, Nintendo will have to release a new console--and the traditional five-year console cycle would have the company coming out with a new one in 2011. But why mess with the kind of success the Wii is having?