iSuppli, a division of IHS Inc., this week said Nintendo Co.’s Wii U will sell 3.5 million units this year, an increase from initial launch sales for the Wii.

The firm says that demand will exceed supply due to inventory constaints.

In addition, it estimates that Wii U sales will total 70 percent of Wii sales in the first four years at retail, citing a fragmented landscape for game consumption.

“This time around, Wii U’s pure innovation, coupled with a limited volume of high-quality Nintendo software, will not be enough to drive the ongoing sales momentum we witnessed with the Wii console, especially at a higher price point,” said Piers Harding-Rolls, senior principal analyst, head of games at IHS.

“Long-term success depends on ongoing consumer engagement delivered through the constant release of high-quality content from both first and third parties, a competitive non-games entertainment proposition and a sound digital and online strategy to go along with such innovation. Nintendo is still some way short of delivering a comprehensive engagement-led value proposition at the launch of the Wii U.”

Launch titles featured in the kiosk software include New Super Mario Bros. U, Batman: Arkham Asylum and ZombiU.

Each title held an option to demo the software titles, but none were selectable at the time.

Nintendo will sell the Wii U in the U.S. Nov. 18 in two product SKUs.

The Basic Set will include the Wii U console and the Wii U GamePad in White, 8GB storage, AC adapters, HDMI cable and Wii U sensor bar at $299.99.

The Deluxe Set will include the Wii U console and Wii U GamePad in Black, 32GB storage, GamePad Charging Cradle, Stands for the GamePad and Console, AC adapters, HDMI cable, and Nintendo Land at $349.99.

The Wii U is backwards compatible with most Wii games and accessories, including the Wii Remote, Nunchuck, and Wii Balance Board.

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