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Baptism of fire: the knives come out for Wii U

Baptism of fire: the knives come out for Wii U

Fri 30 Nov 2012 7:45am GMT / 2:45am EST / 11:45pm PST
RetailHardware

Nintendo's new console is far from a darling of the press - but few of the arguments made against the Wii U's business case actually hold water

Three times it's happened, and three times the naysayers have been wrong. When the Nintendo DS launched, its dual-screen layout was ludicrous - an experiment too far from a company desperate to be seen as innovative. When the Nintendo Wii launched, its decision to dump the traditional controller and ignore the graphical fidelity power-struggle was equally mad. Most recently, the Nintendo 3DS was a gimmick, a ludicrous anachronism in the age of the smartphone - and hell, they were almost right about that one, until the usually somnolent Nintendo startled us with an eye-watering price cut and an aggressive software launch schedule which sent sales up into the tens of millions.

"We live in a bit of a bubble in the games media; read enough sparkling repartee about the Wii in your comment threads and it's easy to forget the sheer mass of people who bought a Wii"

Since the US launch a few weeks back, and intensifying further around this week's European launch, the Wii U has attracted similar noises - and this time, even those inclined to give Nintendo the benefit of the doubt are uncertain. After all, every great track record ends somewhere, right? Besides, the Wii U does seem a bit peculiar and anachronistic - a console that matches the performance of Sony and Microsoft's six- and seven-year-old models, shipping with a on odd, tethered hybrid of controller and touchscreen tablet... In an era of iPads and Nexus 7s and Kindle Fires, where LCD touch panels sprout from our every pocket and satchel, the Wii U's Fisher-Price take on tech that's already a reality for most of us all just seems rather hopeful and twee, perhaps even a bit desperate.

Besides, wasn't the Wii, in the final analysis, less of a success than it seemed? It sold great guns, sure - even after years of hearing about sales declines and the death knell of the console, it's still way ahead of either PS3 or 360 in installed base terms - but the software attach rate was low and many publishers (including, admittedly, quite a number who shipped nothing but utter crap for the console) have been left feeling burnt. Gamers, too, love to hate the Wii, even after all these years - it's the console that gathers dust, the console that made developers think we all wanted to wave our arms like fools instead of tapping buttons like the modern-day concert pianists we truly are. Yes, Nintendo still made a massive profit, floating briefly to the very top of Japan's stock market, ahead of heavy industry firms that dwarf it in every other respect - but unlike the Wii, Wii U hardware won't be profitable out the gate, Nintendo having learned some tough lessons about pricing from the 3DS' early troubles.

And so on, and so forth. You don't have to look very far across the games media to find analysis of the business and market cases for Wii U; some of it interesting, although sadly, the vast bulk of it written with all the business and market understanding of a socially ill-adjusted 15 year old who still hasn't quite grasped that his worldview is only one worldview among 7 billion, and that people who like other music, movies, games or hobbies are not necessarily the result of some terrible brain-damaging accident or a widespread failure of abortion policy.

We live in a bit of a bubble in the games media; read enough sparkling repartee about the Wii in your comment threads ("ffs more waggle crap, nintendo sux", et cetera, et cetera, ad nauseum) and it's easy to forget the sheer mass of people who bought a Wii and both used and enjoyed it just as much as they expected - a few hours of entertainment here and there, brought out at Christmas or birthdays to keep the family from one another's throats, treated as a light exercise device or a surrogate baby-sitter or a catalyst for drunken dancing.

"Profitability has been a key argument since Satoru Iwata announced that the Wii U wouldn't be profitable on hardware sales at launch"

Which is not to say that the Wii U is a surefire success - far from it. It's simply to say that the challenges which the Wii U faces are not especially new challenges, nor are those most vociferously raising the issue of those challenges necessarily speaking from positions of either neutrality or insight. In the past few weeks we have seen repeated claims that the Wii touchscreen will be too confusing for the players who enjoyed the simplicity of the Wiimote - ignoring the fact that the DS, too, sported two screens, one of them touch enabled, and caused remarkably few brains to explode, not to mention the fact that touchscreen devices have proved insanely successful in markets where traditional interfaces have caused difficulty, such as young children and the elderly.

We've seen arguments that the Wii U will fail because the Wii "burned" consumers, founded entirely, it seems, on the views of core gamer writers and their core gamer friends - an important market, sure, but the Wii's installed base of nearly 100 million units didn't come primarily from that audience (and many of them will get on board, grudgingly or otherwise, for the simple reason that Nintendo's games and those of its preferred development partners are generally excellent).

Profitability has been a key argument since Satoru Iwata announced that the Wii U wouldn't be profitable on hardware sales at launch. Less attention was paid to the mention a while later that while a Wii U console wouldn't be profitable, a Wii U console plus one game would tip into the black - I'm not aware (though I'd welcome a correction from anyone with insight) of a dedicated games console that ever had an attach rate of lower than 1.0, rendering this argument effectively moot. (Margins, though, are worthy of discussion - perhaps some time down the line, when we have solid figures and a little more space for calm debate.)

Of course, there's third party support - but my god, if Nintendo has been around the houses with the "two screens are confusing!" argument, it's practically had the world tour of the third-party support debate. Every console Nintendo has ever made has been dominated by sales of Nintendo's own software and that of a close cadre of development and publishing partners - Ubisoft are probably the best example this generation, but Capcom and Squaresoft, to name but two, have both occupied similar "friend of Nintendo" positions over the years. Everyone else has a tough time, so every generation, lip service is paid to making things better for third parties - and every generation, Nintendo consoles are sold for the implicit, if not express, purpose of simply playing games made by Nintendo & Pals.

I don't know how the Wii U is going to fare, any more than anyone else does. As ever, a huge part of the equation is the software line-up and the quality of that software; moreover, whether that software can catch the imagination of the broader public in the way that Wii Fit, Brain Training, Nintendogs and the likes have done over the years. That's an almost complete unknown right now. The impact of tablets and smartphones can be speculated upon, but it remains pure speculation - we all thought smartphones would kill the 3DS, and it's up around the 25 million installed base mark now, so we obviously don't know as much as we thought we did.

"Most importantly, public sentiment around the Wii brand and its successor are simply a black hole right now"

Most importantly, public sentiment around the Wii brand and its successor are simply a black hole right now. Comments threads and forums are less than worthless as gauges of broad public opinion; Nintendo has undoubtedly done comprehensive market research, but none of that is in the public domain. If I were to highlight one area I genuinely think will harm Nintendo's market chances, it's the firm's downright Neanderthal approach to online services and digital distribution, which belie the console's Japanese origins (and Nintendo's often blinkered, domestic focus), Japan being one of the only places in the world where traditional games retail is still in rude health. Even at that, though, it's hard to say with any certainty how much weight the console's target markets place on that functionality.

I know analysts are paid to make predictions, not to shrug their shoulders and say "we don't know"; I know that journalists get more recognition and more hits for making bold, often controversial statements, rather than admitting ignorance and trying to outline the factors we don't understand yet. I'd like to think, though, that there's no harm in saying, occasionally, "we just don't know"; there are times when it's the most honest thing to say. That being the case, there is certainly merit in ignoring the poorly considered, logically and factually flawed cases being made for Wii U's imminent spectacular failure. It could happen, sure; but it sure as hell won't happen for any of the reasons being trotted out at present.

26 Comments

Sandy Lobban
Founder and Creative Director

310 195 0.6
Having played one, I predict it'll be a success. The controller is remarkably comfortable in your hands. Way more so than a tablet will ever be. It'll also be the brand of choice for parents and kids alike. Nintendo don't really get lumped into the hardcore games bracket and some of the wider negative press that goes with it. They are seen as a more innocent fun option. For that reason it's a good choice in the minds of parents with upcoming gaming sprogs. As a parent myself I would get one for my son for sure. Amongst all the tech noise out there, their message is still clear.

Posted:A year ago

#1

Daniel Hughes
Studying PhD Literary Modernism

436 496 1.1
Great article Rob, as usual. Nice to see a bit of reason around this. I suppose for many of the doom-mongers, having written off the last three Nintendo systems they must feel confident that by writing this one off they're due a win. Time will tell, but I think they'll be sorely disappointed.

"If I were to highlight one area I genuinely think will harm Nintendo's market chances, it's the firm's downright Neanderthal approach to online services and digital distribution, which belie the console's Japanese origins (and Nintendo's often blinkered, domestic focus), Japan being one of the only places in the world where traditional games retail is still in rude health."

That is, perhaps, the Wii U's biggest flaw. It's an area in which Nintendo are catching up fast, and in some areas, such as Miiverse, doing a brilliant job before their competition, but when it comes to the digital distribution of retail titles you can tell Nintendo aren't yet ready to embrace it. Pricing is un-competitive, as is the case on 360 and PS3, but users seem actively discouraged from following this route by the small amount of onboard memory the Wii U has. Ultimately this could be something the prevents the Wii U from selling strongly late in its lifespan, leading to a Wii style drop off.

Personally, I believe that if Nintendo and their 'pals' can keep the software and services coming on a more constant, consistent basis with Wii U than they did with Wii, the system will chug along handsomely. Retail sales are falling, yes, digital is the future, yes; but how soon is that complete transfer going to take place? We don't yet know. The world as a whole is heading that way, but the declines in retail sales in the videogames industry can partially be attributed to the winding down of the current console cycle. I don't see retail growth or sales returning to 2008 (which was an exceptional year with some exceptional boxed product), but I can see it growing from its current size in a couple of years--even though that will then be the last hurrah of traditional retail in the games industry.

If Nintendo are replacing Wii U in six years time, this hesitance to embrace the future--like their decision not to embrace high definition six years ago--may not be too much a problem for Wii U, but rather a burning issue their next platform must face full-on. Of course, this time next year Nintendo could surprise us all and announce a Wii U with a handy built in hard-drive. As Rob said, speculation remains speculation, and what we all believe is conventional wisdom is often turned on its head as time goes on.

Posted:A year ago

#2

Paul Wrider
Director of Game Design

7 0 0.0
Much like the 3DS on launch, price is a sticking point. We'll see how it fares over the holidays, but $350 is a big chunk of change. I'm a semi-core gamer, and I won't (and I suspect many like me) bother to get one till the first price cut.

Posted:A year ago

#3

Farhang Namdar
Lead Game Designer

75 47 0.6
Nintendo always delivers excellent products, and like any other product it will go through some iterations before it is perfect. You want it now, you get it, if you wait you get the more perfected version.

Posted:A year ago

#4

Neil Millstone
Director

32 12 0.4
Having just received mine, it has a lot of the Nintendo magic. Nintendoland demonstrates some of the unique things you can do with the controller and for people playing multiplayer games in the same room, it will be great. That's an area that Sony and MS never really cared about. I don't know why though, because it's great fun.

I can see that as with the Wii, developers that don't just port shovelware onto it will be able to make something great which will sell. Those that are trying to make a quick buck will probably fail.

It is a bit too expensive though.

Edited 1 times. Last edit by Neil Millstone on 30th November 2012 12:51pm

Posted:A year ago

#5

Tommy Thompson
Lecturer in BSc (Hons) Computer Games Programming.

44 26 0.6
Neil's right. Third-party need to openly embrace the Wii U as a means to expand their portfolio and either ensure the same quality in the Wii U as they do the 360 and PS3 versions (ahem FIFA 2013) or provide some interesting new IP for the system. As Rob rightly points out, too many of the publishers were hypocritical in condemning a system they damaged by providing nothing but terrible products. No wonder the likes of Ubisoft continue to provide launch software; they embrace what Nintendo are trying to do and make a legitimate effort. It appears to have worked for them so far.

Frankly nobody knows how well it will perform. If anything I suspect the only people who have some kind of inclination is Nintendo themselves, thanks to whatever magic they conjure behind closed doors.

Posted:A year ago

#6

Patrick Williams
Medicine and Research

93 61 0.7
Popular Comment
I'm pretty unsympathetic to the complaints 3rd parties have about how nintendo gets the most sales on their own consoles. First party sales don't cannibalize 3rd party sales. As eloquently put early in this article, we kept seeing crap from 3rd parties that don't have innovative or interesting uses for Nintendo's tech. You can't blame a console for low attach rates. That's the fault of people not making games people want to buy. People didn't buy Wiis because they wanted one gathering dust next to their TVs, they wanted to play games on their Wiis and they didn't get them.

Posted:A year ago

#7

Stephen Richards
Game Deisgner

67 28 0.4
As the article says, nintendo makes a profit after one game sold - there's no way the wii u can be a 'failure' for them. The worst it can do is sell moderately, which is no loss for nintendo. And frankly, to sell moderate numbers of the wii u, all they need are HD updates to the mario kart and super smash bros series. I mean, who wouldn't buy a new console to play mario kart split-screen with enough pixels on the tv to actually see where you're going?

Posted:A year ago

#8

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Rob, your delivery makes courier services the world over jealous.


If online and digital distribution are the system's weak points, then the Wii U is set for success. It now has an online service that largely matches what is found on other consoles (sure, it's missing a few things but it also adds a lot of new things) and all 1st party (and most 3rd party) titles are available for sale digitally day 1. That's even better than the other consoles DD services.


What I hear from most detractors though is how the Wii U will manage once Sony and MS launch their new consoles. They've written off Wii U on the grounds of the assumption that Sony and MS will simply blow Nintendo out of the water 12 months from now.

Posted:A year ago

#9

Jason Avent
VP, Studio Head

139 140 1.0
Popular Comment

Posted:A year ago

#10

Neil Sorens
Creative Director

17 48 2.8
"It's probably not doomed" is not exactly winner talk. And console history, judging by console history, is not to be trusted as an indicator of future performance except for the price factor.

The Wii U is facing a number of headwinds: the crash in brand appeal after the Wii's sugar rush, the sub-competitive amount of processing power and consequent sub-competitive 3rd party ports, the confusing messaging (is it just a controller for the Wii?), the lack of a unique selling point with broad appeal, the European recession and North American stagnation, the strong yen, the unpolished OS and missing ecommerce features, the movement of gaming dollars to mobile and social platforms (especially among the same audience that the Wii won over), an apparent lack of flexibility in how far they can drop the price, a poor reputation among 3rd parties, relatively slack demand at the initial launch, and so on.

It's got a few things going for it: a desire among dedicated console gamers for something new, Miiverse, much-improved policies and procedures for digital publishing, a controller gimmick that could catch on (but has no chance to equal the potency of the motion controller in selling systems), 1st party software and brands, a pile of cash, and a year head start on Microsoft and Sony.

It's clearly not destined for complete failure, but a Wii redux is clearly not in the cards.

Edited 1 times. Last edit by Neil Sorens on 30th November 2012 6:13pm

Posted:A year ago

#11
My skepticism in regards to the WiiU's sales potential come from 2 major points not mentioned in this article:
1. The higher asking price than the original Wii. At $300, instead of $250, I think the WiiU is officially not an impulse buy in the way the Wii was. I think this is going to be confusing to laymen consumers who don't discern between graphics specs that much, and who will thus mostly view the WiiU as just the tablet itself.
2. Nintendo's seeming inability to grapple with higher spec game development, for which the WiiU was designed. It seems like most of Nintendo's successes in the past decade have been on games using a retro vibe. Outside of Zelda, and Mario Galaxy, they haven't demonstrated an inclination or ability to even make Gamecube quality games, let alone pushing polygons to the modern level.
With the 3DS getting more graphically powerful as well, I think it muddies the water. What exactly will be the MO for how they make the next generation of Nintendo titles?

Posted:A year ago

#12

Greg Wilcox
Creator, Destroy All Fanboys!

2,130 1,038 0.5
"great track records end somewhere.."

Great article, but can we all agree about the above comment for EVERYTHING in terms of tech and gaming (mobile included) and move onward? That would be a start to the end of some of the damn doom-saying coming from analysts who don't even own or play some of these platforms they currently make a good deal of money bashing around on a constant basis.

Every Wii U title I've played has that "aha!" moment where you realize why that GamePad is so cool and important. From Nintendo Land's mass of "oh, that's how you use it" mini-games (at least two or three of which should be expanded to full games), being able to play while someone else hogs the TV to how you fire up that new Batman armor (the pad turns to a "fingerprint scanner") and all of Zombi U (warts and all, it's damn impressive and innovative), I think it's a case of those who "get" it early on being the ones who stay with the system as it grows.

Posted:A year ago

#13

Brandon Hofer
Editor in Chief

14 5 0.4
Great article Rob. Really well done.

Nintendo nailed the price point for the Wii U. You have the $299 system which will be important for parents shopping for Christmas gifts and then the $349 price for the more core market. Clearly the $349 system is a much better deal than the $299 version, however, $299 is hugely important psychologically and is definitely much more of an "impulse buy" than $349. Will the console enjoy a surge in sales whenever it gets the initial price drop? Of course, that is common sense. I didn't buy a PS3 until it was $299. I don't think consoles in general are an impulse buy at all but that is another topic. The price of a console is definitely important but lets not act like $299 (or $349) is some insane price. It is actually a pretty great deal considering what you get. It isn't like Nintendo wants $599 for the Wii U.

While it is true that no one knows what the future will bring I have already seen some great third party support for the Wii U. The Wii U has the best launch library, ever. It doesn't matter if some of the games have been previously released. Arkham City is a great game. Mass Effect 3 is a phenomenal title. Call of Duty: Black Ops II is a lot of fun. My first time going through Assassin's Creed III will be on the Wii U. Console launches almost never have high quality titles like that in the beginning and for someone who hasn't played those titles before they are in for a real treat. Even for someone like me who has played through those titles, I look forward to playing through them again and seeing what the companies did with the Wii U. I was very impressed at E3 when I was able to get my hands on Arkham City Armored Edition and I look forward to going through the other titles.

I think the future for the Wii U is very bright. For some reason that I can't quite figure out Nintendo is always underestimated. It reminds me of the famous quote, "If you don't learn from history you are bound to repeat it".

Posted:A year ago

#14

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
I was very impressed at E3 when I was able to get my hands on Arkham City Armored Edition
This is the crux of it all right there and exactly what Nintendo is talking about.

Get your hands on it and then you'll start to get it.

Posted:A year ago

#15

Jason Sartor
Copy editor/Videographer

104 33 0.3
@Neil: Funny so many people consider the Wii a sugar crash as I think most of the best games for the Wii came much later in it's life cycle. Especially for core gamers, the best third-party offerings and especially in the RPG category

I don't own a Wii because I thought the original slate of games the first couple of years was weak, but I am considering getting a Wii U to pick up some classic (Super Mario Galaxy series), but also the games that came late in the cycle that so many people seem to have ignored. Donkey Country Returns, New Super Mario Bros., 2D Kirby, The Last Story, Xenoblade Chronicles, Muramasa: The Demon Blade, Monster Hunter Tri and Pandora's Tower.

Posted:A year ago

#16

Nicholas Pantazis
Senior Editor

1,008 1,396 1.4
Excellent article, Rob. I have little to add, other than thanks. The honesty and reasonable analysis here is a breath of fresh air in a media full of absurdly detailed predictions about something we really can make little estimates of.

Posted:A year ago

#17

Julian Cram
Project Manager

49 27 0.6
What hurt third party game developers on the Wii was the insistence that every game use their stupid waggle controls on EVERY game.

I've worked on about 5 Wii games, including Star Wars: The Force Unleashed. Yes, I was just a lowly tester, but we knew the game would get a bollocking because of the stupid waggle movement (not to mention the inaccuracy of the remote when held like a sword).

And yes, even I will admit some games worked brilliantly with waggle. However, most of the wii games I've worked on, and most of the games I played and reviewed, would have been much better if we could have just used the regular controller. But no, Nintendo insist on not only forcing the player to use the wiimote, but also insist on having controls which use the waggle motion.

If Nintendo don't insist on using the second screen for game which don't need it, I think they should do ok with third party developers.

Posted:A year ago

#18

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Julian, I believe if one game used controls correctly, then any other game that didn't was simply poor execution on the part of the developer. The Godfather: Blackhand edition should have been the blueprint for every 3rd party thereafter (including EA themselves).

I'm also quite certain that gesture controls are not required in their Wii TRC. I have several Wii games that don't have any gesture based controls at all. Even a couple with no IR or gesture controls.

I can also state with certainty that there is not any required TRC items for Gamepad use on the Wii U. Use is solely up to developers just as gesture controls were on the Wii. That's been stated by Nintendo and developers already.

Posted:A year ago

#19

Felix Leyendecker
Senior 3D Artist

181 200 1.1
Can you please stop repeating the wrong assumption that the attach rate of the Wii is much lower than the competition's?
http://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1209.pdf
with 695 million games and 86 million systems sold, the attach rate is 8.6 games per system, compared to 8.9 of the 360 (US only, their strongest market), and 8.2 for the PS3.

Edited 1 times. Last edit by Felix Leyendecker on 2nd December 2012 9:38am

Posted:A year ago

#20

Robin Clarke
Producer

295 678 2.3
Yeah, there was no requirement to use gesture controls on Wii, even some of the first party games didn't use them. (And loads of other - 1st and 3rd party - games made excellent use of them.)

Having to support a console's default controller is a reasonable requirement.

Posted:A year ago

#21

Colin Payne
game designer; artist

22 24 1.1
Most importantly: the gaming press is driven by hits these days. Negativity attracts hits.

Posted:A year ago

#22
Rob - as usual a top article. I think all games developers/publishers outside of Nintendo need to remember one thing. If they want to make games that will sell on the Wii U, they must make truly great games that actually use the features of the Wii U. Games, licenced or otherwise, that are nothing but ports will only clog up the 2nd hand bays in the retail stores that are left. They will look sad and miserable and only serve to ruin the customers' experience. Making games to really utilise the Wii U's features will not be easy or cheap, but as has been said before is done by some games developers/publishers if not all of them. Margins for 3rd parties will always be tight of course, given the manufacturing prices, but for the right game, crafted with respect, love and care, there is a profit awaiting. Provided Nintendo have sold in the Wii U units, which over time they will do. They just won't sell 25M a quarter like Apple or Samsung do, but that is a different market in any case. Or at least I think it is ;-)

Posted:A year ago

#23
Now spent my first night with the WiiU, I have absolutely no doubt it will succeed - as usual all the "issues" are completely overblown, and everything I played was fun and gorgeous. Makes me feel really stupid for worrying about "specs" :P

Its the Swiss-Army Knife games console.

Posted:A year ago

#24

Caleb Hale
Journalist

150 221 1.5
Specs don't sell a system; the games do. If Nintendo can build a good lineup of first- and second-party titles exclusive to Wii U, plus land most - but not necessarily all - major third-party releases coming out in the next two years, Wii U will be a very attractive choice to potential buyers, even after the next Xbox and PlayStation launch. We can't assume those who waited on Wii U this year are only going to consider Sony's and Microsoft's next systems. I think - and maybe hope a little - after next year's E3 Nintendo will have built a strong case for why the Wii U can and will stand up to competing next-gen consoles.

Posted:A year ago

#25

Paul Erickson
Senior Analyst

10 0 0.0
I'll agree it's a crapshoot on the Wii U, prediction-wise. My personal opinion is that its success this season and to some extent this cycle will fall upon basic consumer fundamentals and have zero to do with gameplay or content library. The economy isnt the greatest and we see consumer spending is good this holiday season but it has been price aggression that has been the main factor in driving their purchase behavior right now.

Edited 1 times. Last edit by Paul Erickson on 4th December 2012 11:14pm

Posted:A year ago

#26

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