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Retail

Iwata: Wii U sales "not bad" despite lack of premium units

Iwata: Wii U sales "not bad" despite lack of premium units

Mon 07 Jan 2013 9:24am GMT / 4:24am EST / 1:24am PST
RetailHardware

Nintendo president muted on console performance, cites high demand for premium version as an issue

Nintendo president Satoru Iwata has claimed that the Wii U is "selling steadily," though he admitted that it hasn't inspired the explosive interest lavished on its predecessor.

Speaking to Reuters, Iwata gave a muted account of the performance of the company's new console hardware. He cited predicting demand for Wii U's basic and premium versions as one of the key issues at this early stage in its life-cycle.

"At the end of the Christmas season, it wasn't as though stores in the US had no Wii U left in stock, as it was when Wii was first sold in that popular boom. But sales are not bad, and I feel it's selling steadily," he said.

"It was the first time Nintendo released two models of the game console at the same time ... and I believe there was a challenge with balancing this. Specifically, inventory levels for the premium, deluxe package was unbalanced as many people wanted that version and couldn't find it."

Nintendo has not released precise sales figures for the Wii U, though data from the Japanese magazine publisher Enterbrain suggests that it sold just over 638,000 units in Japan between December 8 and 30.

However, the opinion among analysts is that Wii U is performing below expectations, which is reflected by the 15 per cent drop in Nintendo's share price since the console first launched.

19 Comments

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 496 1.1
"However, the opinion among analysts is that Wii U is performing below expectations, which is reflected by the 15 per cent drop in Nintendo's share price since the console first launched."

What expectations are the analysts guided by, though? It was clear it wasn't going to have a better launch than Wii, even if you only put it down to the simple fact less stock is being shipped than during the same period for Wii. Surely analysts can't issue expectations that the launch should be bigger than the Wii's launch, because that is literally impossible without Nintendo producing more units from somewhere.

Towards the end of this year, I wouldn't be surprised to see Nintendo drop the basic package and bring down the price of the premium. I also wouldn't be surprised if poor European sales are hindering the Wii U.

Posted:A year ago

#1
The investors expected the current Nintendo management to prove they had a online strategy for the future of the business. And from the Bricking and firmware update fiasco, along with the whole TVii situation (that still has not been resolved) it would seem that the management fell at the first hurdle.
An opportunity for Nintendo to lead the pack squandered on a miss match of launch titles and serious concerns that Nintendo as a corporation is unable and unwilling to embrace online support of is customer base. And yet Nintendo is still in better shape than its competition.
As Daniel states, price drop, package drop, and some executive thinning for the end of '13 - then I would expect a Wii-U+ platform for '14, once we have seen how big a leap XB720 and PS4 really are!

Posted:A year ago

#2

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 496 1.1
The digital business isn't a huge mess, but I'd agree Nintendo haven't leveraged the opportunity the Wii U's launch gave them as well as they could do, in terms of proving to the mass market they've got an excellent online system. Their best feature, Miiverse, has had relatively little recognition, while simple, unfortunate teething problems such as low download speeds and prolonged updates, have had huge amounts of attention. Nintendo have done a poor job of managing that situation. Yes, they apologised, but they should have been singing Miiverse's praises from the rooftops while pointing out that these are only early problems for the service.

A report in Nikkei proves that in Japan at least, Nintendo's digital push is gathering steam: 500,000 digital copies of Animal Crossing have been sold at 4800 yen each, which gives Nintendo roughly $27 million in revenue from digital sales of one title in one territory. It's going to be incredibly difficult to recreate that success in the West, where download prices are always higher than their retail equivalents, versus being on par or slightly lower than retail in Japan, but Nintendo's business in the West usually develops six to twelve months behind the trend established in Japan. Nintendo's priority needs to be focused around creating a more flexible, tiered pricing of software across retail and digital, while introducing universal, cross-system accounts and services as soon as possible, in order to achieve better software and hardware sales in the West, which have a less entrenched traditional handheld market, and a less entrenched market (particularly in Europe) for Nintendo products.

Posted:A year ago

#3

Keldon Alleyne Handheld Developer, Avasopht Ltd

448 419 0.9
I don't know what I want more. A Wii-U or a clue as to what Nintendo are up to.

Posted:A year ago

#4

Chris Madsen

23 10 0.4
The Wii U is lacking extremely on games... I got Assassins Creed 3 on PC, buggy game, and Batman I really don't get why they have that on Wii U this late. ZombieU is very disappointing, hitting with the cricket bat is slow and aiming with the gun is crap.
The Wii U eshop not much to offer yet.
Nintendo Land is fun, but no online play makes it a bit boring.
They should have made more to offer at start.

Posted:A year ago

#5

William Usher Assistant Editor, Cinema Blend

42 33 0.8
I agree, Chris.

Right now I'm not seeing a lot of games to help move the hardware and that's going to be Nintendo's biggest hurdle to overcome at the moment (especially if they want core gamers buying the system). They need a killer app that's memorable and, dare I say, mainstream... sort of like Uncharted for PS3, Gears of War for Xbox 360 or Halo for the original Xbox.

Hopefully Nintendo has something up their sleeve.

Posted:A year ago

#6

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 496 1.1
And reasons for the drop in share price become clearer. Estimates from the US put Wii U at best on par with Wii's launch, but more likely tracking up to 10% behind--which would be more or less in line with Nintendo's expectations if that pattern was repeated globally. I've seen nothing substantial on European sales, but would wager that'll be the softest launch and biggest drop off from Wii, because of the lack of historical strength of Nintendo's home console business in Europe and the comparatively high prices across software and hardware. As for Japan, Iwata gave a figure of over 600k (I believe around 638k), which means Wii U is so far tracking roughly 30% behind Wii in its home territory, though with Dragon Quest X and Monster Hunter due in Japan in Q1, I think Wii U will build momentum there quickly, and that Europe will be the real struggle.

Posted:A year ago

#7

Nicholas Pantazis Senior Editor, VGChartz Ltd

1,020 1,467 1.4
The lacking software library is certainly the biggest problem for the Wii U right now, but that's true of any console at launch. Do you guys just not remember the launches of past systems? The Vita was all ports and spinoffs, the 3DS didn't even have that. The PS3 was Resistance and a bunch of crappy ports, the Wii was even MORE ports plus Wii Sports, and the Xbox 360 was... uh... nothing at all.

Ultimately, buying platforms at launch has never been for anyone but enthusiasts. The viral nature of Wii Sports made the Wii the exception, but Nintendo Land is no Wii Sports, and until Nintendo comes up with something of a similar nature, it's not going to sell to the mass market. The core gamers will come as they always do when games like Pikmin, Monster Hunter, Bayonetta, Zelda, Metroid, and 3D Mario show up.

Posted:A year ago

#8

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 207 0.6
very true Nicholas. if i can judge from myself and what i hear from people around me, that is exactly what i am waiting for.
however seeing so many basic units around, i feel the solution is simply staring nintendo in the face :) increase the production of premium packages. people clearly prefer this model, and let the basic model on the slow burner until it eventually sells out OR bring up a nice promotion. bundle it with a game or some reason why anyone should invest on a cut down version, other than price.

Edited 1 times. Last edit by Yiannis Koumoutzelis on 8th January 2013 7:09am

Posted:A year ago

#9

Bruce Everiss Marketing Consultant

1,692 594 0.4
It could be that Wii U is the trendsetter. That all next gen game consoles will under perform because the market has moved on.
Consoles once had a near monopoly on the world's gaming hours. There was a stage in the early 2000s when it looked as if piracy was going to kill the PC off as a gaming platform. And there was nothing else.
Now, in terms of hours played, consoles are a rapidly declining niche product. At a time when gaming is expanding very rapidly indeed.
Very many more people worldwide are now gaming than even a year ago. And they are not getting their gaming from consoles.

Microsoft have seen the writing on the wall and have rapidly moved their Xbox offering away from being a game console. Now it is a media device that sits under the television and which allows the consumption of a vast array of content. Part of this content is that it just happens to play games. We will see this even more with Xbox 720 and its alignment with the Win8 ecosystem.

Nobody knows where Sony are or what they are doing. Possibly even Sony themselves. If they bring out a PS4 as a dedicated gaming console reliant on physical media then they are dead. Simple as. They have the resources, with their film and music businesses and with their phone and TV divisions, to take the bull by the horns and lead the market again. But the synergies have shown no sign of being there.

As for Nintendo, they are an entertainment company with a portfolio of world class IPs. So they are in an immensely strong position. However they are petrified of deserting hardware because they saw how badly Sega screwed up. It will be interesting to see how Wii U fares, obviously it will only be a shadow of the original Wii. If it is not to fall over completely Nintendo need to come up with some compelling reasons for mass markets to want to invest in one, they haven't yet.

Posted:A year ago

#10

Wesley Williams Quality Assurance

133 72 0.5
I don't buy the argument that the core gamers will come when Nintendo rolls out yet more sequels to existing franchises. Nintendo need to revolutionise those franchises for that argument to hold water. The names alone won't be enough and I just can't see what revolutionary steps Nintendo can take with those games to make the core need that hardware. Now admittedly, Miyamoto has more vision in his little finger than I probably do in my whole body, but it's going to take some seriously breathtaking new gaming ideas to save them this time.

Posted:A year ago

#11

Dan Howdle Head of Content, Existent

280 810 2.9
@Bruce

I think it sets the trend for poorly conceived ideas in a more fickle market than it does consoles as a whole.

Posted:A year ago

#12
They should focus on the TVii and social networking services and really aim it at the mainstream. The hardware is perfect for this.

Once they have a large enough market they can then make a fortune selling them content including games digitally.

Posted:A year ago

#13

Adam Campbell Associate Producer, Miniclip Ltd

1,178 967 0.8
I think the Wii-U was a mistake and I don't think the product is that exciting in itself.

Posted:A year ago

#14
It is funny how we have come to the point where the entertainment media portal concept, so despised when the XBox was launched has come round to face us. I think Bruce's observations are very valid, and his appraisal of the main protagonists are apposite. The question remains - if the console 'walled garden' is to be a niche area of the market - can the current consumer game scene survive foraging outside of this environment - or will a new industry emerge post DLC, and Steambox?

Posted:A year ago

#15
I think people are being extremely harsh on Nintendo, for no really good reason (ah yeah, this is the web isn't it...).

Its a launch. There are hardware shortages, there are going to be issues and in general sales for Ninty are fairly close to production/shipments. The next 3 months are what count.

The WiiU has had a MUCH better software lineup at launch than the Wii ever did - the Wii pretty much rode on WiiSports. I personally think NintendoLand is a fantastic game (I bought 5 games at launch, and am still ONLY playing this) - one with a lot more depth and interest than WiiSports. It is however, a title for a different market. Its a title for gamers, not a title for casuals - which signals the intent Nintendo have for the console.

Miiverse is amazing, and its integration into Nintendoland is amazing. You only have to spend a bit of time with the service to understand what Nintendo are trying to do - they have bought the entire community together. This is functionality that has never been done before on any console game, and they have increased engagement to a new level.

And off-screen play has transformed the way we play games at home, as well as the way we use the TV. Its so much easier to sit down for a quick gaming session without turning the TV on. And my son now uses the WiiU to watch cartoons (on the TV) - and while he does I catch up on browsing.

This is the first console from Nintendo that allows full, retail titles to be downloaded and played rather than bought at retail. And this is critical, because it significantly boosts profitability for Nintendo (and other publishers). Mario is regularly in the eshop top#10 - and any downloaded copy earns Nintendo approximately 3-4x the profit that a physical copy does. This is *not* something to be glossed over.

Nintendo are notorious for delaying and releasing slowly - and gamers hate it, and love to whine about it. It was never going to be different this time around. The key is really in 3rd-party support, to fill in the gaps. And a combination of the gamepad (i.e. touch screen) & and a 'nicer' Nintendo could have a lot of new companies pushing for digital releases.

I think its a mistake that the WiiU can't play DVDs (let alone BluRays), as the controller is so good at controlling other media forms. It would have made a great DVD player interface. And I think the design of the menus (including the delays) is a poor oversight - they have a dedicated 1GB of RAM, they easily could have put everything in there (rather than making things like the settings an 'app').

And the last thing they need to do is sort out the IR functionality. It really needed to be programmable, so people can configure it to control everything in their living room. It doesn't even work for my TV, even though the TV is on the list. I really hope they can fix this, as its a key feature.

Posted:A year ago

#16

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 207 0.6
what i can say is that a lot of companies jumped quickly to follow on the wiiU paradigm. From Sony, to Android, to nVidia (Shield on CES), to Razer with Edge, to Microsoft SmartGlass... as far as i can see, Nintendo was followed even before wiiU came to market. wiiU is a trendsetter. was the product ready for the market? no. there were lots of issues same as with 3DS. but what nintendo has seen, and proven, is that a product, same as many games, can come out with limited functionality, add on as it goes and become successful too!

my only concern, and it doesn't seem like nintendo is doing anything about it, is whether they really understand what online digital distribution is and how important it is today. i am still not convinced they do, and i hear a lot about an internet phobia culture in Japan which i found hard to believe initially, but turns out it has some serious basis. as we know, nintendo designs for Japan first!

i think it has become some sort of a natural tendency for people and even certain digital media members to hate on Nintendo :) and ofc nintendo gives plenty of opportunities for people to bash them. by making awkward moves. i have definitely not seen a hate more fierce for any other gaming company though. they are playing a risky marketing game i think, but it kind of works to their benefit. they are still on top of their game, making the right choices. 3DS is the #1 selling dedicated game device in the world offering a good balance of price, features, high quality content, and as far as we developers are concerned previous gen development cost.

Posted:A year ago

#17
Nintendo have sold at least 500k units animal crossing online.. .just in Japan. Once they see the potential of that ... expect them to get even more aggressive re digital distribution. All they have to do is sell 25% of their sales online and revenue can increase by 50%. It's just starting.

Posted:A year ago

#18

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 207 0.6
brand new pokemon for 3DS with vastly upgraded visuals and gameplay comes out in october worldwide. just saying.

Posted:A year ago

#19

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