Nintendo Co. unveiled at the annual Electronic Entertainment Expo in Los Angeles, California, the Wii U, the high-definition video-game console succeeding the market leader Wii.

Nintendo has sold 86 million units of the Wii console since its launch in 2006, outselling Sony's PlayStation 3 and Microsoft's XBOX 360. And the Wii U, which will be available next year, shows lots of promise. Nintendo's next video game innovation has earned praises for its tablet-like touch screen in its controller, an option to move the game from being played on TV to the small handheld screen, Activision Blizzard and Electronics Arts games in the pipeline, a touchscreen for casual games/ buttons for action games, and high-definition graphics.

However, apparently, the new console has impressed only hard-core gamers and not investors of Nintendo. Shares of Nintendo stock dropped 6.5 percent following the impressive launch of the Wii U. Investors are concerned that the world's largest maker of video-game players is too focused on hardware and has not addressed concerns that more consumers are moving to social networking sites like Facebook Inc., and portable devices like the smartphones, and tablets like the iPad for games.

Kyoto, Japan-based Nintendo proudly said in its Web site, "Discover an exciting new way to enjoy home entertainment with Wii U, Nintendo's next home console. With a revolutionary new touch screen controller, precision motion controls, and full HD graphics, a whole new world of play styles and gaming possibilities is on the horizon. The time is coming to truly expand your idea about what a game console is-and can be."

Wii U Features

* Launches: 2012

* Size: Approximately 1.8 inches tall, 6.8 inches wide and 10.5 inches long.

* New Controller: The new controller incorporates a 6.2-inch, 16:9 touch screen and traditional button controls, including two analog Circle Pads. This combination removes the traditional barriers between games, players and the TV by creating a second window into the video game world. The rechargeable controller includes a Power button, Home button, +Control Pad, A/B/X/Y buttons, L/R buttons and ZL/ZR buttons. It includes a built-in accelerometer and gyroscope, rumble feature, camera, a microphone, stereo speakers, a sensor strip and a stylus.

* Other Controls: Up to four Wii Remote (or Wii Remote Plus) controllers can be connected at once. The new console supports all Wii controllers and input devices, including the Nunchuk controller, Classic ControllerTM, Classic Controller ProTM and Wii Balance Board.

* Media: A single self-loading media bay will play 12-centimeter proprietary high-density optical discs for the new console, as well as 12-centimeter Wii optical discs.

* Video Output: Supports 1080p, 1080i, 720p, 480p and 480i. Compatible cables include HDMI, component, S-video and composite.

* Audio Output: Uses AV Multi Out connector. Six-channel PCM linear output through HDMI.

* Storage: The console will have internal flash memory, as well as the option to expand its memory using either an SD memory card or an external USB hard disk drive.

* CPU: IBM Power-based multi-core microprocessor.

* Other: Four USB 2.0 connector slots are included. The new console is backward compatible with Wii games and Wii accessories.

At the E3 conference, Nintendo developers also demonstrated games in which one person uses the touch screen in the controller for cooperative play with four others using Wii remote controls.

Nintendo announced that popular shoot-em-up games like Ubisoft Entertainment SA's Ghost Recon, Sega's Aliens and Electronic Arts Inc's Battlefield 3 will be on Wii U.

Competition from all fronts

Nintendo's Wii competes in the market with the consoles offered by Sony Corp. and Microsoft Corp. Sony Corp. has sold more than 50 million units of the PlayStation 3. Microsoft has sold 54 million XBOX 360 consoles worldwide. Microsoft's Kinect motion-sensing controller and Sony's Move motion controller, both introduced in the past year, have spurred sales of the consoles. Sony has confirmed that it has started development for the PlayStation 4. Microsoft is said to be working on a successor to XBOX 360.

While gaming consoles have found fewer sales, Apple's iPhone and iPad, as well as smartphones based on Google Inc.'s Android operating system are attracting more gamers with their third-party applications.

At a press briefing in April, in response to questions about the gaining popularity of tablet-type devices in the market and the possibility of having a tablet device as Nintendo hardware or a game device, Nintendo President Satoru Iwata said that while the tablet is "an interesting device", Nintendo "never abandoned the + Control Pad and buttons for our game systems because we think these functions are advantageous when creating highly reactive games."

Iwata in April was asked to comment on the fact that social games in addition to mobile games are played mainly on smartphones, are continuing to grow rapidly. Mr. Iwata debunked the idea of somehow incorporating social games as one of revenue source. He acknowledged that at a time when Nintendo's sales were down, there was a growth in social games and smartphones. However, he refused to blame the social games or smartphones for Nintendo's lower sales. He noted that according to their research, people who play paid social games have a higher Nintendo DS use rate.

Iwata needs the Wii U to revive sales as Nintendo's deliveries have been declining for two years. The Wii U won't be available this holiday season, and Nintendo still expects to sell 13 million additional Wii consoles in the 12 months ending March 31, 2012. In fiscal 2011, Nintendo sold 15 million units, compared with 20.5 million units in 2010.Nintendo cut the price of its Wii game system to US$150 last month.

Nintendo released in February the Nintendo 3DS, a new handheld device, which allows 3D gameplay without the need for any special glasses. The Company has forecast sales of its handheld 3DS player to climb to 16 million units in the fiscal year ending in March. The predecessor Nintendo DS, which has already sold 146 million units, is expected to sell 11 million additional units in fiscal 2012.

Nintendo had net sales (from consoles and games) of 1,014 billion yen in the fiscal year ended March 31, 2011, down from 1,434 billion yen in the same period in 2010. In April, it forecast that for the fiscal year ending March 31, 2012, net sales would be 1,100 billion yen. However, the forecasts did not include sales of the Wii U, which could turn things around for Nintendo.

According to the Nikkei newspaper, Iwata signaled the WiiU will likely be priced at more than 20,000 yen (US$250) in Japan when it goes on sale next year.