Editors note: Scott Steinberg is the head of technology and video game consulting firm TechSavvy Global, as well as the founder of GameExec magazine and Game Industry TV. The creator and host of online video series Game Theory, he frequently appears as an on-air technology analyst for ABC, CBS, NBC, FOX and CNN.
(CNN) — Depending on which Internet rumor you believe, it will be called Wii 2, Project Cafe or Stream. The only thing we know for certain about Nintendos new video game system is that its coming in 2012.
Nintendo is widely expected to unveil its successor to the Wii, the top seller among the current generation of gaming consoles, next month at the E3 trade show in Los Angeles.
Nobody knows yet what features the system will contain or exactly when it will be released (current speculation points to next spring at the earliest). But other, bigger questions beg asking: Can the new console match the cultural impact of the original? And will it shore up Nintendos faltering dominance in the gaming market?
At face value, a follow-up to the Wii — the first motion-controlled gaming system, which became a breakaway hit with such nontraditional gamers as women and seniors — would seem to be a slam dunk.
But despite having sold 86 million units of the system since its launch in November 2006, Wii sales fell 25% in 2010, down from 20.5 million units the year before. Nintendo has also suffered some recent financial troubles, as its most recent profit and sales figures have both slid by double digits.
Despite enjoying industry-leading popularity for four-plus years and single-handedly making motion controls a household name, the Wii is looking long in the tooth. Some believe the video game manufacturer has reacted too slowly to counteract its competition.
Last year, Sony and Microsoft introduced their own enhanced motion control systems, the PlayStation Move and the Xbox Kinect, which have sold an impressive 8 million and 10 million units, respectively.
And while the PlayStation 3 and Xbox 360 offer dazzling high-definition graphics, streaming multimedia and robust online multiplayer, Nintendos console has been coasting by on increasingly archaic-looking, standard-definition visuals and limited Internet functionality.
Buy a Wii, and you get a family-friendly system notable for its everyday accessibility, software-emulated gaming classics and library of familiar Nintendo hits including Super Mario All-Stars and Donkey Kong Country Returns.
Purchase a competing device and you get an HD showpiece readily capable of powering sprawling, grandiose 3-D worlds and stunning 1080p visuals. But you also get a combination home entertainment center and Internet gaming hub whose online storefronts burst with downloadable movies, music and games. You also get access to smash hits, like the Halo series, that arent available for the Wii.
A recent price drop to $149.99, plus bundling with popular game Mario Kart, a Wii remote and a racing wheel, will surely goose Wii sales in the short term. But whether thats enough of a bargain to excite cash-strapped shoppers seems dubious. And it wont be enough to capture a new generation of players whove grown up knowing HD graphics, streaming multimedia and mass online mayhem as the everyday norm.
We can only speculate for now about the Wii 2s possible features, which are said to include high-definition 1080p graphics, more computing muscle than the PlayStation 3 and a controller with a touchscreen built into it.
But as with any new generation of console hardware, technical advancements such as these are expected. Its what you do with them in the way of killer apps, also known as must-have software and services, which determines long-term success.
To triumph with a new Wii console, Nintendo will have to do more than just embrace the shift to high-definition digital entertainment and online connectivity, or deliver new installments of its most cherished franchises.
As longtime gaming fans are aware, the company will also have to reach out to talented external software developers, who can push the platform harder and further than even its creators could originally have intended.
From Gran Turismo to Grand Theft Auto, Guitar Hero to Gears of War, history clearly shows that having a robust and thriving range of games that speak to all skill levels and interests is vital to captivating players worldwide.
Nintendo is said to be making all the right overtures this time around. The firm is apparently courting external software developers in hopes of giving more third-parties a chance to shine than on the current Wii system, where Nintendo games dominate.
Still, theres persistent gossip about a possible $350 to $400 price, which would put the device well out of the reach of many households. At that sticker price, the system wouldnt just need to offer backwards compatibility with existing Wii titles to justify the cost. It would also need to bring major hardware or software innovations to the table.
Plausible upgrades could take the form of greater online gaming features, including the ability to handle microtransactions and, by proxy, social games and free massively multiplayer online games.
Another potential Wii 2 feature might be better support for digital distribution of downloadable games through a superior service to WiiWare, Nintendos current online sales channel, which is presently on life support. And if rumors of a touchscreen controller prove true, a gamepad that could double as a portable handheld system would be an eye-catching bonus.
Either way, even with new systems reportedly not due from Microsoft and Sony until 2014, something big has to change if Nintendo wants to compete in the coming console wars.
In the years since the Wii debuted, there has been a growing shift toward digitally downloadable and streaming games offered by online vendors like Steam and Impulse or cloud services such as OnLive and Gaikai.
With thousands of free games suddenly playable in ones Web browser and smartphone apps now accounting for nearly half of gaming downloads, its obvious that Nintendos once-loyal audience of casual players is quickly fragmenting across platforms and devices.
So will there be a place for the Wii 2, and Nintendo, at the top of the gaming pile next year? Well have to wait for an answer, but the initial signs suggest the company has a big challenge on its hands.