Is it game over for Nintendo?

The Wii U is a bust (so far). And the legendary company's future is looking increasingly bleak.

By TheWeek.com Jan 31, 2013 3:48PM

Watching television copyright Digital Vision Ltd. SuperStockNintendo (NTDOY) had no choice but to go all in with the Wii U, the newest in a long line of ostensibly childhood-defining game consoles. Unfortunately, the company also inherited the weighty expectations of the original Wii -- which, if you'll remember, became a surprise hit when it debuted in 2006, or just two short years after the world was first introduced to a little-known Senate candidate named Barack Obama. 


But ever since the Wii U hit store shelves last November, sales have been disappointing. Now the company is dramatically lowering its forecasts for the future. 


Initial sales figures indicate that Nintendo has so far sold just 3.06 million Wii U game consoles, and anticipates moving just four million Wii U units through March -- far below previous estimates of 5.5 million, predictions that weren't even that optimistic to begin with. 


Initial reviews of the Wii U were mixed. Yes, it's fun. But the console failed to offer a compelling reason for consumers to free up dusty shelf space alongside their Xbox 360s or PlayStation 3s. Some critics say the console is confused, and Nintendo didn't know if it was targeting mature gamers fixated on first-person shooter games like Call of Duty and Borderlands, or more casual fans like the original Wii did with its motion-sensing nunchuck. Further complicating matters is a nimble new mobile industry, dominated by non-committal, take-anywhere games like Temple Run and Angry Birds. 


"Nintendo needs a change in strategy," Michael Pachter, a gaming research analyst for Wedbush Securities, tells The New York Times. Even though Nintendo is an instantly recognizable brand the world over, the company still doesn't license its gaming titles for other platforms (ever see Mario on an iPhone?). To make matters worse, on Thursday, Nintendo president Satoru Iwata said that the company has no intention of lowering the price of its $300 flagship gaming system anytime soon. "We were already offering it at a good price," he said, according to the Huffington Post. 


That means Nintendo, unless it releases a best-selling breakout title soon (Zelda, perhaps? Super Smash Bros. Brawl?), will continue on its path toward an increasingly dark future. The company already had its worst year ever in 2011. Dramatic restructuring seems imminent.


Consoles -- compared to phones, tablets, laptops, and many other gadgets -- have a much slower product cycle. Manufacturers only press "reset" every couple of years so that game-makers aren't constantly readjusting to new hardware.


For quickly aging dinosaurs like Nintendo, that means more plodding along. More disappointing forecasts. More reluctant critics. More lost opportunities to earn the trust of lifelong fans. More, more, more. (Or for Nintendo, less, less, less?)


"People have to try it to see it is fun," Iwata said of the Wii U. Undoubtedly, it is.


But unfortunately for Nintendo, "fun" just isn't good enough anymore.


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Tags: NTDOY
31Comments
Jan 31, 2013 5:45PM
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Nintendo needs to go back to what got them where they are today.  Screw competing with Microsoft & Sony!  Re-release the original Nintendo Entertainment System & the Super Nintendo Entertainment System, re-release the games & you will make a fortune.  Why should all of the pawn shops & classic video game stores make all the money.  NES & SNES systems & games is again booming with 80s kids growing up & getting their kids hooked on them.  They don't have to play with the new guys.  Stick with what worked...NES & SNES.  Re-release!
Jan 31, 2013 4:27PM
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The Console market is a big question mark for all makers. I wouldn't write nintendo off yet. Many made a lot of hype about initial poor sales of the 3DS, but it actually has done great business. Actually Nintendo may be in a stronger position than the other console maker since their popularity with gaming has less to do with tech improvements and more to do with just solid game play.
And no brainer here...people will buy the Wii U when their favorite characters or brands  appear on the  new console.
Nintendo has shown better business sense than anyone in the gaming industry the last 10 years. It has come at a cost to third party developers, but Nintendo doesn't sell their consoles in the red, so early adoption is not as big of deal to them as it is to Sony or Microsoft.

 
Jan 31, 2013 4:52PM
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It is too early, WAY too early to be judging the console. It hasn't even been out half a year yet. And in no way does this show a death spiral for Nintendo. They dominate the handheld market. They also make top quality games. I tell you now, any "hardcore gamer" that is solely into FPS titles is no gamer in my book. They are simply a part of these Millennials that flood the industry, not knowing a good game if it slapped them in the face.

Nintendo = quality, hands down. The Wii U only reinforces that statement. It appeals to the entire spectrum of gamers. It just hasn't gotten a full library yet. By this time next year, it will be of unquestionable quality and value. Just you wait and see.
Feb 1, 2013 4:26AM
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 "or more casual fans like the original Wii did with its motion-sensing nunchuck." 
This reporter obviously doesn't have a clue about the draw of the Wii.  The nunchuck controller was put in place for hardcore gamers (to play 1st person shooters or 3d action/adventure games); the Wii remote by itself was for casual games (e.g. Wii Sports, Carnival Games, Wii Music, etc).  The reason the Wii U isn't selling out is that it doesn't have a killer app, and there haven't been any major releases since November.  The original DS suffered from a lack of major releases its first six months, the 3ds suffered from this as well (and a high price); but both caught steam and have sold much better than competing devices (the PSP and Vita).  
Jan 31, 2013 4:16PM
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As soon as I saw a commercial for the Wii U I knew Nintendo was on it's way out.

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$300 is too much for a console that's only about as powerful as a PS3--a system that includes a removable/upgradable HDD, better multiplayer options, a backwards compatible online library, and better connectivity with it's portable systems.

 

If I were a new gamer right now, I'd spend my $300 on a PS3 over a Wii U.

 

Editor's Note:  It was probably a bad idea to compare consoles to smartphones.  Because, I could bring up PC gaming (with Steam interface), which far outshines ALL mobile games right now.  Let's stick to apples-to-apples discussions.

Jan 31, 2013 4:28PM
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Nintendo should jhave sticked with creating games for kids, They just cant compate with PS3 or Xbox, Those are two major hitters that focuse on mature audiance, if the stick with pre-teen audiance they will have a chance to survive little longer
Jan 31, 2013 4:15PM
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I think most people who owned a Wii eventually felt cheated by the console.  For serious gamers, there were only a handful of games worth owning.  After that, it was nothing but shovelware. 

 

Once the fad wore off for the causal gamers (in this I mean the parents and grandparents that bought them for themselves), the bulk of Wii systems sat in entertainment centers across the globe, collecting dust.

 

Frankly, console gaming as a whole is starting to show signs of losing serious market share to mobile gaming via tablets and smart phones.

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