Analyst anticipates increased third-party Wii support

Colin Sebastian, an analyst with Lazard Capital Markets, believes that the lower cost and broader audience should encourage Wii support from third-party publishers.

"... It should not come as a surprise that Nintendo titles are dominating Wii video game charts early in the cycle," said Sebastian in his report. "But the longer-term picture may be an expanding market among mainstream consumers attracted to more casual games available on the DS and Wii."

Traditionally, Nintendo first-party titles have dominated the market for each generation of its hardware, but the company has said that it would be more aggressive in pursuing third-party support of the Wii. The recently-announced WiiWare initiative should also help to increase support.

While recognising investor anxiety related to the impact on third-party publishers from a stronger Nintendo, Sebastian noted that "publishers should be able to tolerate lower retail pricing and attach rates on the Wii vs. PS3 and Xbox 360 without sacrificing title profitability."

He estimates that the Wii installed base will approach 20 million units worldwide by March 2008.