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Nintendo might have been boo'ed for its lack of focus on "core" gamers during its recent E3 conference, but analysts and industry folk alike feel the company will still enjoy success in the coming months thanks to its catering towards casual audiences. Wedbush Morgan analyst Michael Pachter in particular predicts Nintendo will report sales greater than ¥421 billion ($3.91 billion USD) for its first quarter fincial results, due later this week. This is a little higher than the "current consensus" of ¥400 billion ($3.72 billion USD) cited for the quarter. Both sets of figures are still much higher than the Q1 fiscal 2007 results of ¥340 billion ($2.8 billion USD) reported by Nintendo last July.

Meanwhile, UBS Japan analyst Shunsuke Tsuchiya is also betting on solid returns for Nintendo over the coming fiscal years. He explains that the growth of the gaming market rests on both "user needs" as well a "broadening" of the market itself. The former actually points towards the core gamer desire for improved hardware performance and slicker visuals, while the latter concerns exploration of new genres.  Tsuchiya notes that although Nintendo is clearly reaping the rewards of having "new ways to play" with the DS and Wii under its belt, it will also do well to embrace "performance improvements" if it wants to maintain a lead well into the next generation of consoles.

Interestingly, Tsuchiya believes hardware performance is expected to be the main driver of growth for portable gaming, whilst genre expansion will be more of benefit for home consoles. It's here he turns towards Nintendo. The ingredients for success will be maintaining backward compatibility with current platforms, improving CPU performance for both handhelds and consoles by fiscal years 2009 and 2010 respectively, and tapping into reducing production costs:

...if Nintendo is able to leverage technological progress in semiconductors and improve performance based on the usual rate of cost reductions (about 30% annually for semiconductors), while maintaining backward compatibility with the current versions of NDS and Wii, it should be able to maintain a high level of price performance at a price users can afford in both the console and portable markets... Provided that Nintendo follows the same strategy that Sony did in its generational shift from the PS1 to the PS2, it should be able to pull this off.

Specifically looking at the DS, Tsuchiya warns that the monster-hit portable risks losing market share to the increasingly popular Sony PlayStation Portable if it doesn't start taking some performance enhancement drugs. To this end, he believes Nintendo will launch a "next-gen" portable within the next year.