Time may be right for new Nintendo console

In short, there's a reason why many of the companies presenting at the Merrill Lynch media and entertainment vonference earlier this month expressed a surprising healthy market for the PS2.

"Sony has talked about this PlayStation 2 cycle having -- I don't know -- five more years to it," Electronic Arts CFO Warren Jenson said during the conference. "It's going to be around for a long time."

In other words, the PS3 is going to be a slow gainer. It really doesn't have much of a choice given its production snafus, but the high price is going to make it appealing more to upscale celluloid junkies than actual gamers for another year or two when the price starts to drop.

At half the price of the PS3, and ready to fill the retail channels with nearly twice as much product, Nintendo has the perfect chance to matter again.

Wii the people
So are couch potato gaming fiends ready to get moving to make the most out of their new games? It's an odd proposition until you walk into the arcade and see folks playing Dance Dance Revolution. That can sometimes rival even the most ardent of aerobic workouts.

Even though folks will be able to enjoy their Wii games in the more conventional vegetative state, won't the active gameplay elements win over parents who worry that their kids aren't getting enough exercise by spending way too much time staring at their television screens and computer monitors?

You bet. Childhood obesity is the real deal. Even McDonald's is feeling a guilty conscience these days as it seeks to motivate the Happy Meal crowd to embrace physical fitness.

Even if you're jaded and argue that kids will rebel against their parents, there's got to be something in a new parental mindset that will encourage video game playing and the guilt-free purchase of new software titles.

Nintendo has already proven that it can rework the market with the success of the touch screen and voice-activated Nintendo DS. It has opened up the portable market to the cerebral with Brain Age and Big Brain Academy, as well as the pet-loving Nintendogs set.

Nintendo won't catch up to Sony, but it can certainly help close the gap with a successful Wii rollout. Because the PS2 is in ample supply at the $129 price point, the Wii marketing message shouldn't be based on the value proposition relative to the PS3 and Xbox 360. In reality, the Wii will be duking it out over the holidays with PS2 and second-hand systems being sold at GameStop more than the scarce and pricey PS3. That's where Nintendo needs to pitch its revolutionary controller and evolutionary gameplay.

If this is Nintendo's last hurrah in the console market, it couldn't ask for better playing conditions. If it plays its cards right and the competition continue to play theirs wrong, Nintendo may very well overcome its ill-advised name.

Longtime Fool contributor Rick Munarriz (TMFBreakerRick) has been a fan of video games dating back to Pong. He does not own shares in any of the companies in this story.

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