Nintendo's Wii is the Belle of EA's Ball

About a week ago I was invited to attend a Midtown Manhattan party hosted by Electronic Arts [ERTS] showcasing some of their upcoming video game titles for this holiday season. However what struck me most were not their cool games like Need For Speed Carbon, or great graphics in games like FIFA 2007 but the fact that there was crowd formed around the sole Nintendo Wii console that was set up to showcase Madden 2007.
Everyone seemed to want to try this new gaming experience. I sat down to play Madden and I can tell you that within 5 minutes I was fairly proficient in kicking field goals and throwing receptions using its remote control like wand. This is a sharp contrast to my experience playing Madden with my 10 year old son, who becomes frustrated easily because I cant seem to navigate the many buttons well enough to kick off or complete passes. "Your no fun Dad, You Stink!" is his most common gripe. This holiday season, when we get the Wii, he will be in for a surprise.
Unlike its bigger console biz rivals, innovative little Nintendo is hell bent on expanding the video gaming audience by changing gaming's interface and by introducing inclusive and unique games, like BrainAge and Nintendogs. No one in the room seemed to care that Nintendo's Wii didn't display the game in high definition. It's not the quality of the image that gamers care about, its the quality of the gameplay.
As a matter of full disclosure I own American Depository Receipts in shares of Nintendo [NTDOY.PK] so I do have a vested interest here. I also own shares of Electronic Arts. That said, I am more confident than ever that I made the right move buying Nintendo's stock (in fact I am already sitting with a tidy profit in just a few months). I believe Nintendo will have an exceptionally strong holiday season. It has the most innovative console out there at the right price ($250 versus $400 for Xbox and $5-600 for PlayStation3) and it has a host of big games coming out including The Legend of Zelda - Twighlight Princess, which fans have been anticipating for years.

Sumner's Folly

Many moons ago I interviewed Tom Freston and Sumner Redstone for a story I was doing on Viacom for Forbes Magazine. It was clear then as it is now that Freston was an unorthodox executive who fostered creativity in his colleagues, including Gerry Laybourne, who was then building Nickelodeon. Under Freston's watch most of Viacom's most valuable franchises were created, from MTV to Nickelodeon to Nick at Nite. As I sit here typing this my daughter is watching an episode of Sponge Bob, who is the "Bugs Bunny" of our day.

I guess Freston is being blamed for missing out on doing deals for MySpace and YouTube, but it seems to me that Viacom has done pretty well "building" rather than "buying." So to clip someone who helped make Viacom the media giant it is today seems crazy to me. Freston has built so many great Viacom assets that I am sure that he would have similar success on the Internet. I guess Sumner cant stand to see Rupert beating him in any arena.

Unfortunately for Viacom shareholders Sumner is a classic example of a business owner who is afraid to let go and obviously has trouble sharing the limelight. Biondi and Karmazin know this all too well. In fact when I interviewed Biondi, Sumner was sitting right next to him breathing down his neck. And I'm sure Sumner's kids could tell us a thing or two about his control freakishness. Freston is probably better off now, as is Biondi and Karmazin. Viacom shareholders? I'm not so sure.

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