Nintendo investors don’t like the Wii U

Nintendo Wii U controller, console in background

Nintendo’s unique new console, the Wii U, is the hottest thing so far to come out of this year’s E3 video game conference, which is taking place in Los Angeles this week. But despite the buzz surrounding the next-generation gaming device, Nintendo’s investors are reportedly less than pleased.

Following Tuesday’s unveiling of the Wii U, Nintendo shares dropped 5.7 percent on Japan’s market, reports Reuters. Investors apparently believe that the introduction of the Wii U indicates that Nintendo is still too focused on gaming hardware, rather than software and online gameplay, the battlegrounds to which the industry titans are headed.

“Although some experts seem to like the new device, I expected Nintendo to move more into the social networking business,” said Mitsuo Shimizu, a market analyst with Cosmo Securities in Tokyo, who spoke with Reuters. “It’s a warning from investors that the company should reconsider its business strategy and move more aggressively into social gaming operations.”

Nintendo’s president Satoru Iwata brushed off the drop in stock price and criticism from investors and analysts, saying that Nintendo remains committed to creating games that don’t need a social aspect to have value with gamers.

“It’s not that we’re negative about the network, but if we ignore those customers who don’t link their game consoles up to the Internet, that goes against our strategy of expanding the games market,” Iwata said at a press conference. “We are just trying not to shrink our own market.”

The most distinctive aspect so far known about the Wii U is its controller, which comes packed with its own touchscreen display. The console can play the game on a connected television, or beam it directly to the controller. Overall, the Wii U is a more robust gaming device aimed and more hardcore gamers, and takes aim at competitor consoles, Microsoft’s Xbox 360 and Sony’s PlayStation 3.

Not everyone believes Nintendo headed in the wrong direction with the Wii U. Instead, some believe the console is ahead of its time, not behind it.

“Nintendo is ahead of the curve for once,” said analyst Michael Pachter. “It can do anything a tablet can do and people might be asking, why can’t my iPad 2 do this kind of gaming too?”

The Wii U will launch in 2012, and is estimated to cost $299. For more about the Wii U, check out our full “What you need to know” guide here. And check back with Digital Trends for our complete E3 coverage.