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Nintendo adds Netflix to Wii, plays catch-up with Sony, Microsoft

January 13, 2010 | 11:10 am

Wii The No. 1 video game console is taking a page out of the playbooks of the ones in second and third place.

Nintendo early this morning announced it would add Netflix's movie streaming service to its Wii console this spring. Microsoft added the Netflix streaming function to its Xbox 360 console in November 2008. Sony did the same on its PlayStation 3 in November 2009.

As with the PS3, the Netflix streaming service will be free to the 11 million-plus people who already subscribe to Netflix's movie rental service. Xbox 360 owners must subscribe to the $50-a-year Gold membership to access Netflix.

The news was a head-scratcher for those who recall Nintendo's insistence over the last three years since the Wii launched that its console was not meant to be a general-purpose digital entertainment device, like the 360 and PS3. Unlike its competitors, the Wii cannot play Blu-ray discs or even standard DVDs. 

In addition, Nintendo's device does not support the same high-definition video quality as the 360 or PS3.

But with sales of the Wii console losing significant momentum in the last year and the other two consoles, particularly Sony's PS3, gaining ground, Nintendo has apparently changed its tune.

Will it be enough to lift sales?

Unlikely, said Michael Pachter, analyst with Wedbush Morgan Securities, who noted that Sony's and Microsoft's consoles have the advantage of catalogs of thousands of movies and TV shows available to download that are not on Netflix.

Another analyst, Tony Wible at Janney Montgomery Scott, observed that only one-third of Wii consoles are even connected to the Internet, a necessity for using Netflix. That percentage is far higher for the 360 and PS3, which have long emphasized online game playing much more than Nintendo. Wible estimates that only 11% of the 26.3 million Wii users in the United States will use Netflix.

In short, Nintendo may need a more potent power-up if it's going to recharge a stagnant console market.

-- Alex Pham and Ben Fritz

Photo: Nintendo Wii. Credit: Nintendo.