Friday, 15 February 2013

Wii U in Dire Straights.

This article kicks off the beginning of a 3-part article looking at the three new consoles. With the PS4 being announced next week, Nintendo are in trouble. The Wii U hasn't taken off as they would have liked and with new consoles coming, Nintendo should be seriously worried. In fact, latest reports indicates that Nintendo sold less than 100,000 units with a figure of 59,000 being mooted. This is shocking for a new console and Nintendo should seriously be worried. The Wii U is already being sold at a loss, presumably because of the high cost of the controller.

This is a graph for Nintendo fanboys so that you can somewhat grasp what kind of shape the company is in. I know you go on Nintendo fan pages and see the upbeat version of a press release about the Wii U sales but they just aren’t great. There also isn’t much to indicate they will get better any time soon. The above graph is what the net sales & net income (in Yen) looks like for Nintendo over the last 4 years. 
Iwata (Nintendo’s CEO) has said there will not be a price mark down. That almost goes without saying. A price markdown in the 1st year or even 2 is likely a sign of collapse with any console. Nintendo lost almost a half of a billion last year and it looks like they will make a slight profit this (fiscal) year. If they don’t, who knows what the future holds. I understand the profits were really high in the past which makes the incline even sharper.  I know you might not want to think it but what you are seeing is a near catastrophic collapse of a company. 

This graph courtesy of Ron Workmans blog, ( highlights the trouble Nintendo are in. in the past 4 years sales and income has plummeted. The 3DS has taken a battering due to smartphone's and Nintendo's hope that the Wii U's innovative controller would lead them to the heights of the orginal Wii has not come to fruition.

The Big Worry

Some might say the Wii U has been out for a matter of months and therefore, they should be given more time to sort things out. It's clear to see now though, that Wii U will never reach the same popularity as the Wii did. The Wii did so well because of the innovative motion controller. Nintendo have gone for the same strategy but this time the casual gamers are nowhere near as excited as before and this,for me, provides the killer blow for Nintendo.

One year advantage?

The reason I really worry for Nintendo is that they have blown that year advantage. An opportunity that Microsoft used for the Xbox 360 to get some sort of foothold. Nintendo should have had a number of stellar games out during this year, yet Wii U owners have very little games to shout about.

The Position

What perplexes me is that they have a console that can't really be called next-gen or current-gen. Yes, it's slightly more powerful than the Xbox 360 and Ps3 but what about when the PS4 and next Xbox arrive? These devices will technically wipe the floor with the Wii U and will provide Nintendo with the same problem the Wii had once the hype died down. 3rd parties will be reluctant to release games on it while they focus development on the more powerful Sony and Microsoft consoles. The casual market is open to all now and Microsoft and Sony will make sure they take advantage of that market from the beginning.


Sony are going to hit next-gen hard with the PS4 and my next article examines this. That being said, Nintendo have got it all wrong. They never wanted to compete with Sony and Microsoft directly in technical terms, but the level of innovation doesn't catch the markets attention as it did with the Wii.

My Prediction

  • Nintendo start a big marketing push to combat the release of new consoles. Expect big games with a big marketing budget. Don't expect a price drop.

  • The next Xbox will pick up where the Wii left off and target the causal market leaving Nintendo in its wake.

  • The future looks bleak with both the Wii U and 3ds struggling too find a position in the market which appeals.

The next few years will be bleak for Nintendo. They might have already reached the point of no return. Will they be the next Sega? Leave your opinions on the comment section.

No comments:

Post a Comment