Nintendo’s Long Tail

If you’ve ever heard of the Long Tail by Wired magazine’s Chris Anderson, then you recognize why the Virtual Console is one of the biggest reasons Nintendo will probably go gangbusters in 2007-2008 with the Wii console.

Today, Anderson himself discussed the Wii on his Long Tail blog:

  • Nearly 1.4 million Wii hardware systems have connected to the Internet worldwide (as of 1/24/07)
  • Approximately 1.5 million Virtual Console games have been downloaded and sold to customers worldwide (as of 1/24/07)

So that’s more than one game from the back catalog sold per connected Wii. At an average of $7 per game, that’s more than $10 million in Long Tail sales for the Wii’s first month, which isn’t bad at all.

Over at Aeropause, they wondered why the heck Nintendo would have any incentive whatsoever to allow indie developers to sell through the Virtual Console, especially in light of the numbers above and how successful Nintendo was doing all by itself on its very own shopping network.

The answer is easy: it costs next to nothing to host digital format — there is no shelf space to worry about, so even games that sell one copy are winners! With that in mind, Nintendo can charge a small “hosting fee” or whatever for indie developers who want to post a game to the tentatively titled “Games Channel” (could be next to nothing really), and then just sit back and watch the free profit roll in. The developer gets the rest, and everybody wins. Well, except us. We’ll still be paying $10 for old N64 games.