The Wii Shop Channel, a pillar of Nintendo's strategy

It's interesting to see how both the Virtual Console and WiiWare services have been utilised by today's gamers. The act of acquiring a game via download is something that was previously only common-place in a market like the PC. Now, all three current-generation home consoles have their own take on the download market; each with their own service(s) that have their own characteristics. Since the WiiWare service launched in 2008, it has seen a steady increase in revenue, whereas the Virtual Console has gradually experienced the opposite.

According to an analysis by Forecasting and Analyzing Digital Entertainment, or FADE, WiiWare titles raked in nearly $59 million USD during 2009 in the Western market alone (North/South America, Europe, and Australia), with a 30% jump in revenue compared to the previous year. A service that seems to have more success with third-party developers, with FADE estimating their 10% of the market claiming nearly 70% of the combined download revenue that totals around $125 million USD. The Virtual Console, on the other hand, has suffered its own problems. With periods where it sees no updates in the Wii Shop Channel weekly additions, coupled with the promotion that Nintendo ran where gamers could claim a free NES game if the Internet Channel was purchased prior to going free (which led to an estimated over half a million free giveaways), Virtual Console games took in an estimated $66 million USD but are believed to have dropped 25% in revenue last year.

FADE uses a collection of data gleaned from the Wii Shop Channel rankings, direct user-polls that have been correlated by public statements with private developer-conversations, and general Nintendo Channel usage data that exceeds 5 million submissions on a daily basis. As such, these figures are only an estimation and should not be considered as "concrete sales figures".

Even so, if these numbers are anything to go by, the Virtual Console has a potentially bumpy ride ahead of itself if the roster/frequency of games does not improve. It's a service that currently seems to be paying off for Nintendo anyways; with 76% of the revenue generated by their games, compared to the WiiWare service where only 16% of the total revenue came from their titles. But what's going to happen when the all the old favourites that contemporary gamers want are all released? Or stand a chance of not getting released as they appear on other consoles' download services? FADE predicts that in 2010, Virtual Console games will continue to experience small declines in sales, whereas WiiWare will go from strength to strength; perhaps even overtaking the former in revenue.

We're not knocking the Virtual Console (it's the very genesis of Nintendo Life), but by definition it's a source of old games and as such puts a finite number on how many games are even eligible for release. Although we don't expect all the games to "run out" in the Wii's lifetime, it's relatively limited when compared to the WiiWare service where the quantity of games is — for a lack of a better term — unlimited. Perhaps that's why we sometimes see Nintendo careful not to "over-do" the weekly releases. On the whole, is this perception going to be the root of FADE's forecast coming true?