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Does Nintendo stand a chance this holiday?

Does Nintendo stand a chance this holiday?

Mon 08 Jul 2013 2:56pm GMT / 10:56am EDT / 7:56am PDT
HardwarePublishing

Pessimism is starting to crest, notes columnist Chris Morris, as publishers weigh in; "Wii U feels like an offline experience," says Peter Moore

Let's get this out of the way up front. Yes, you never, ever count Nintendo out of the game.

That's the go-to response for pretty much anyone in this industry when asked if the company will be able to dig itself out of the hole the Wii U has created - and it's usually a valid one. (Think back to the GameCube days and things were just as dire as they seem today - but it managed to turn things around.)

But as we head into the Wii U's second holiday season, the pessimism about the system is starting to crest. And despite Nintendo's push of first party software coming in the next year, there's nothing to suggest that a turnaround of any sort is imminent.

Third party partners are, in a word, disappointed with Nintendo. And while you'll still hear the usual refrain about not giving up on the company at some point, you're more likely to hear dissatisfaction when you speak with executives.

Yves Guillemot, Chairman and CEO of Ubisoft, is typically one of the biggest proponents of new systems, but betting big on the Wii U didn't work out well for the company. ZombiU, one of the most popular launch titles for the system with players, was not profitable, he says. Not even close. As such, he says, there are no plans (or even desire) for a sequel.

"It seems like a box that's out of sync with the future of EA - which is one that gives a real social feel to our games. The Wii U feels like an offline experience right now"

Peter Moore

It was, in fact, because of that game's performance that Ubisoft decided to make Rayman Legends a multiplatform game.

"We must find a way to ensure the creativity of those games could have a big enough audience," he says. "We hope it will take off. At the moment, we've said 'let's do through Christmas and see where we are from there.'"

Activision, also, was a notable launch partner for the Wii U, but like Ubisoft, the results haven't been strong enough to justify a notable further investment in the system.

"We came to the table with a robust slate," says Eric Hirshberg, president and CEO of Activision Publishing, at E3. "But we have no announcements now."

No one, however, is more direct than EA's Peter Moore. EA, at present, has no games in development for the Wii U - and its AAA game engine isn't compatible with the system.

"We were there with four games for them [at launch]," he says. "It's been a disappointment when you look at sell-through and, as a company, we have to be very judicious where we deploy our resources."

For EA, at least, it's the system's lack of a rich multiplayer environment that's one of the big concerns - especially for sports titles. (That's part of the reason Madden won't appear on the system this year.)

"The lack of online engagement that we see on Wii U [is troubling]," says Moore. "It's so integral to what we do. They're so small it's hardly worth running the servers. It seems like a box that's out of sync with the future of EA - which is one that gives a real social feel to our games. The Wii U feels like an offline experience right now."

Nintendo systems have always been led by the rich slate of first party titles, but the company isn't an island - and knows it can't remain competitive without the cooperation of third party publishers. And while some, like Capcom, are sticking with the Wii U, even Nintendo admits it needs to woo back its publishing partners by boosting sales.

1

Mario Kart 8 looks great but won't ship until next spring

Rather than focusing on the negativity surrounding the platform, Nintendo itself says it's making software development its primary focus. With no price cuts on the horizon (something global CEO Satoru Iwata has been very insistent about), it realizes that the only way to boost hardware sales is to come up with a must-have game. And while the company is counting on Mario Kart and Super Smash Bros. to do their part, it realizes that those alone won't convince people to invest in the system.

"We have been unsuccessful in coming up with one single software with which people can understand 'OK, this is really different' and I can understand the real value of that as soon as I saw that," says Iwata. "Because there's no software that's simple and obvious for people as 'Wii Sports' for the Wii, potential consumers do not even feel like trying to touch the Wii U. Our challenge today is with the software lineup we are introducing now; we have to encourage them to want to experience the Wii U in the first place."

The problem is: That game's not coming out this holiday, based on what the company showed at E3. And if the Wii U tanks for a second holiday in a row, it's going to be that much harder to get publishers back on board.

38 Comments

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
Popular Comment
So you open with "Never count Nintendo out" and then close by counting Nintendo out.

Posted:A year ago

#1

Neil Young Programmer, Rebellion Developments

312 412 1.3
"And if the Wii U tanks for a second holiday in a row" Correct me if I'm wrong, but I thought the WiiU's launch/holiday sales figures weren't the issue - it was the drop off in sales afterwards?

Posted:A year ago

#2

Andrea Montanari Analyst, Facebook

4 1 0.3
Does Nintendo stand a chance this holiday? None. Period.

Posted:A year ago

#3

Robert B. Healy III Writer / Blogger

13 5 0.4
Iwata is trying to show people the value in the Wii U by developing a system-selling game. But such games are too early in development, and won't be out at least 'till mid-2014 at the earliest. This is bad, because the install-base for the system needs a booster and fast. This holiday season is their last chance to court players so they can get the third parties back on board.

The problem with that, of course, is that the PlayStation 4 and Xbox One are both launching this holiday season. Will Nintendo even stand a chance at gaining attention with their "old news" console when all this NEW stuff starts releasing from their competitors?

Iwata is very adamant about not having a price-cut anytime soon. That's unfortunate, since that's what I've been waiting for myself...

I don't know what to say about all this...they were pretty bad off with the GameCube in its life-cycle at first too, but they came back swingin' HARD. But I don't see what they can do to bring the Wii U back to the forefront of gamers' attentions, unless they have some super big surprise up their sleeve that NOBODY knows about and will totally blow people's minds. Save for a Persona 5 exclusivity announcement (yeah, right), what could possibly do that?

Posted:A year ago

#4
That we are having this conversation shows the raw power and investment that Nintendo can throw even at a busted-flush like the Wii-U - a machine that has been flawed from the start:

- Poor performance to survive in a Gen-8 race
- Poor performance to run two touchscreens (and lie about it)
- Poor marketing and business steerage
- Poor take-up by publishers
- Poor online business plan

We seem to be reliving the confusion of what they have launched, as we saw with the Gamecube (2001) - one wonders what redeveloped 2016/7 machine will emerge from the wreckage of the Wii-U?

Posted:A year ago

#5

Slade Wilson Financial Analyst

14 11 0.8
i dont understand this article. EA is your major source? the most hated game company?

The wii u has the most attractive holiday lineup and its not even close. History says The 3ds and wii u will sell gangbusters.

"Third party partners are, in a word, disappointed with Nintendo."

You only listed 2. Namco arent, atlus arent, platinum arent, ect.

Edited 1 times. Last edit by Slade Wilson on 8th July 2013 5:38pm

Posted:A year ago

#6

Kevin Patterson musician

187 103 0.6
The gamecube had great first party games which is what saved it. It also had Silicon knights and Factor 5 which made a few killer games for the system, who are no longer around. The Wii-u had Ubisoft, but there isnt really any third party games on the horizon that I have seen that approaches the excitement that Rogue Leader, Eternal Darkness, and Resident Evil 4 had.

Zombie U came closest, and Nintendo's own titles look good, but the system seems worse off than the Gamecube was regarding games. This could get better and who knows what Nintendo has up it's sleeves, but It's worrying to say the least.

A big factor is going to be the price, I would imagine they would have to drop it when the new systems are released. The choices between a $300+ Wii-u or a $399 PS4 with more powerful hardware and ton's of storage seems a no brainer. If they can get the Wii-u in the same price ballpark as the original Wii that would spur sales i'm sure.

Posted:A year ago

#7

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
Popular Comment
You know who are disappointed at 3rd parties? Gamers.

3rd parties came out swinging on Wii U and then gave up before even launching anything else. It's like they started trying to build a fanbase and then gave up before ever giving it a chance. If they'd actually have included the Wii U into their full development pipeline, the Wii U would be selling like crazy right now.

You 3rd parties are all waiting for the fanbase to show up but it is YOU that failed to establish the fanbase when you had the chance. You are waiting on us? We are waiting on you....and you don't even see it.

Edited 2 times. Last edit by Jim Webb on 8th July 2013 5:47pm

Posted:A year ago

#8

Slade Wilson Financial Analyst

14 11 0.8
Sonic? scribblenauts? ect? More games on wii u its first year via third parties and indies that people are excited about more than what the gamecube had. And most of those werent year one.

People need to relax :)

Posted:A year ago

#9

Slade Wilson Financial Analyst

14 11 0.8
This is 100% right

Posted:A year ago

#10

DrWong

3 0 0.0
There's no direct quote of Y. Guillemot about Zombi U performance while we have for the others exec. cited here. Why is that?

Posted:A year ago

#11

James Ingrams Writer

215 85 0.4
GameIndustry seems to believe that online will save the XBox One and PS4 in the same way as not having it will kill the Wii. I am not so sure. From E3 trailers all we are getting is various forms of shooters and a racing game or two. There seems little in the way of innovation in any of them, this means the market will be saturated with one genre over the 4th quarter this year and first quarter next year, and I cannot see more than one or two making money.

Gamers are crying out for innovation, which is why the indie/phone game market is so big and getting bigger. If the large publishers think the market will be the same for the XBox One and PS4 as it was 7 years ago when the 360 and PS3 came out, I think they are in for a rude awakening. Especially as neither new console will be backward compatible, meaning new games will be competing with the reduced price 360 and PS3 games still available as well as gamers expectations!!

Posted:A year ago

#12

Bruce Everiss Marketing Consultant

1,692 594 0.4
Wii U = Dreamcast
There really is no reason to buy one.

Posted:A year ago

#13

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
Popular Comment
Bruce, don't act like you ever had a reason to buy an anti-piracy dongle to begin with.

Posted:A year ago

#14

Rick Lopez Illustrator, Graphic Designer

1,269 941 0.7
Look, my comment may come off as biased. Its hard for me to make an objective comment, because honestly Ive always loved Nintendo. As they stand now purchasing a WiiU or a Nintendo console is never a wrong thing to do, because you are sure to have a library of fun games.

I belive Nintendo's only problem is that they have been slow to churn out software for the system. Regardless if its first party or not. Its that simply getting games on the system has been slow.

But entering 2014, Nintendo has a pretty killer lineup of games, that will absolutly make me go out and buy a WiiU... RPG from monolith (X.... Xenoblade 2?), Bayonetta 2, Watch Dogs, Mario Kart 8, Super Smash Bros, Super Mario 3D World, Zelda: Wind Waker HD, Shin Megami Tensei X Fire Emblem, New Super Luigi U, Donkey Kong Country: Tropical freeze.New Zelda, Batman: Arkham City Origins, Assasins Creed 4.

Id say they have a pretty good lineup considering the PS4 games that interested me: KillZone:Shadow Fall, Second Son, WatchDogs, Mirrors Edge 2, Final Fantasy XV, Kingdom Hearts 3, Metal Gear Solid 5, Knack, Assasins Creed 4, Dragon Age: Inquisition, The Evil Within, Destiny... and alot of these games wont see light till 2015....

Then we have games like Cyberpunk 2077, which intrigue me, but wont be out till 2015.... so what is Nintendo doing wrong.

Honestly I see all 3 consoles struggling with initial software releases. lots of XB1 and PS4 games have a release date of 2015

So people need to chill out... Nintendo will be fine.

Edited 1 times. Last edit by Rick Lopez on 8th July 2013 6:34pm

Posted:A year ago

#15

Mark Dygert Lead Character Animator, Her Interactive

21 24 1.1
I agree that the Wii U seems doomed to go the way of the dreamcast but at least people will still be able to play the games and not be required to be online connecting to servers that might not be up and running in the future. For people who hang onto consoles and like playing games well past their expiration date I think thats an important aspect to have.

Posted:A year ago

#16

Slade Wilson Financial Analyst

14 11 0.8
Anyone who compares this situation or vita's to dreamcast, has no knowledge of what actually happened

Posted:A year ago

#17

Greg Wilcox Creator, Destroy All Fanboys!

2,196 1,176 0.5
Popular Comment
"The Wii U feels like an offline experience right now."
Which is a damn good thing to know, Mr. Moore. Especially if and when the competition has issues that prevent users from getting online for a bit.

Posted:A year ago

#18

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
Popular Comment
I think what Mr. Moore is trying to say is that the Wii U seems offline to EA because the Nintendo Network isn't powered by Origin.

Posted:A year ago

#19

Christopher Ingram Editor-at-Large, Digitally Downloaded

52 45 0.9
Third party developers could develop titles cheaply on the Wii, as it was not an HD console; the same goes for Nintendo's handheld consoles. Smaller development teams and less risk can bring forth an increase in creativity, which is exactly why the indie market has gotten so large (important).

The Wii U is a late entry into the HD market for Nintendo, but even so, it is plainly obvious that it was ill prepared for the transition. Development teams need to be significantly increased and the cost to produce HD games is much greater than before - yes, this is common sense in today's market. We saw non-HD games that offered a great deal of creativity and fun-factors struggle to sell on the Wii: deBlob (230,000) and Zack and Wiki: Quest for Barbaros' Treasure (300,000) - that is less than a .5% install base worldwide. These numbers are terrible and in the case of deBlob, THQ even granted it a sequel. The risk of this happening in the HD era, with the increased development cost, could be devastating to the publisher.

Blaming third parties for not putting games on a console that they will almost certainly not turn a profit on is ludicrous. We've seen so many incredibly talented teams fold in the past few years that I can't even reason with blaming third parties at this point in time. We're seeing third parties implement features into games that they know damage the overall fun-factor of the titles, just to try and pull an additional profit off of them; the gaming industry has been in a steady 13-14% decline year after year, and Nintendo brought a console to the market that is in marketing terms, misguided.

Sony's PlayStation Vita is fundamentally and technically an incredible piece of portable gaming hardware. Its price tag and lack of first/third party support have found it in much the same position that the Wii U is currently positioned in. If the third parties are to be blamed for the Wii U, then the same has to stated for the Vita as well. It shouldn't be stated though, because publishers need to turn a profit and they now the largest array of markets to tap into to do this that the weakest links will find the least support - this is the nature of business.

Nintendo has a serious matter on its hands though. The R&D cost alone for the Wii U is most likely very great and these very same increased development cost to produce AAA games is place on Nintendo as well. The Wii U needs the crucial licensing and royalty fees that the third parties bring to a platform holder to recoup the losses that Nintendo is currently facing with the console. Nintendo has to grab the mainstream media's attention - pulling the third parties back on-board - or else (it seems plausible to think that) it could potentially find itself not being profitable on the Wii U.

Posted:A year ago

#20

Paul Jace Merchandiser

955 1,449 1.5
Yes, you never, ever count Nintendo out of the game...
Thats only correct when you finish the sentence...
...when it comes to the handheld market
When it comes to handheld gaming Nintendo has no equal. I often wonder why Sony even tries to compete although overall competition is good for the market, But their consoles have been pretty lackluster to me since the N64. And even though the Wii sold extremely well(I own a dust covered one myself) it never really evolved to the gaming system I truly wanted. All three companies have good first party games but Nintendo's systems have forever lacked strong third party support and thats another reason the Wii is a system I hardly ever played.

Having said all of that, my stance since the Wii U launch has been to give Nintendo the benefit of the doubt until their second holiday release slate, due later this year. They "should"have some really good stuff available. But will that be enough? I think they have sold around 3 million units so far, but they didn't have any next gen competition last year. This year will be really interesting. Best case scenario: they sell as much or close to what the other next gen systems manage to sell during the holidays. Worst case scenario: they get outsold by the XB1, PS4, 360 and PS3. If they also get outsold by the original Wii on top of that then.....well atleast they'll still have their handhelds to fall back on. But like I said, we won't know until the end of the holidays.

Posted:A year ago

#21

Adam Campbell Associate Producer, Miniclip Ltd

1,217 1,050 0.9
When it comes to handheld gaming Nintendo has no equal. I often wonder why Sony even tries to compete
Despite their flaws and troubles in the portable market, 80 Million PSPs is the reason why and no other Nintendo competitor has come close. I think Sony can offer a better hand-held multimedia device and bring some of the class in games we've come to expect from their home consoles.

Thinking back, it gives me chills how big an event Playstation establishing itself in the hand-held market was, even if there troubles to follow, particularly in software sales.

Definitely, more competition is good, especially when they're offering something different. Unfortunately, Playstation Vita has seen a strategy meltdown like the WiiU. Still, more than just an optimist I believe a few adjustments could change everything for the devices...

Posted:A year ago

#22

Andreia Quinta Creative & People Photographer, Studio52 London

236 658 2.8
Damn it, Greg beat me to it.
The Wii U feels like an offline experience right now
And that's bad becaaause? Oh yes, thanks Jim, origin...

Posted:A year ago

#23

Ken Barnes Editor, Pure Xbox

8 29 3.6
"The wii u has the most attractive holiday lineup and its not even close."

I just can't see how you can think that, to be honest. Two brand new consoles complete with launch lineups. GTA V and a bunch of triple-A titles that AREN'T coming to Wii U for the 360 and PS3, and the Wii U has what? The Wonderful 101? Mario Kart? Wii Fit U?

The fact is that most people who got excited about those titles bought their Wii U on launch day. And Platinum may not be disappointed with Nintendo, but their games don't sell. They're excellent - almost without exception - but look at the sales of their previous titles. And Namco? Come on, now. Dragon Ball Z and maybe some film tie-in? Great.

Posted:A year ago

#24

Christopher Ingram Editor-at-Large, Digitally Downloaded

52 45 0.9
I have to agree Ken. Battlefield 4 is my most anticipated game release this holiday season, personally. It isn't going to be coming to the Wii U, even though it is not only a multiplatform release, but a multi-generation release as well.

Posted:A year ago

#25

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
deBlob (230,000)
Actually, it was closer to 900,000. I clearly remember writing an article of THQ announcing 800k in sales and it was still selling.
Zack and Wiki: Quest for Barbaros' Treasure beat Capcom's sales expectations. Those are not the greatest examples to support your view. Now I'm not about to say that there are not examples of games not living up to sales expectations (just that those 2 are certainly not a part of that group) but that's a factor on every console...just as Square Eidos right now.

As for ports, did not Ubisoft note that it cost about $1.3 million to port a title over to the Wii U? If we use that as the average for a publisher and ~$20 to the publisher per title sold, you need little more than 65,000 units sold to turn a profit on a Wii U port.

Start looking at it objectivity with actual figures and it doesn't make any sense at all that every single title going to PS3/X360 shouldn't also see a Wii U release. Short of simply not having enough time and internal resources to handle a 3rd or 4th SKU, the Wii U should be in their pipeline.

Posted:A year ago

#26

David M Lopez Studying Game Art and Design, Art Institute of California - San Diego

8 2 0.3
There are a lot of good comments and I have to agree and I do believe that Nintendo has failed. They had time on their side and the lack of follow through is what got them in the position they are in today. The games that where promised never came take for example Aliens: Colonial Marines. You can say that Nintendo had nothing to do about how that game turned out. I just think that Nintendo isn't pushing hard enough because they think that their 1st party is strong. It's not and the belief that they can rely on Mario and ex for years to come is just naive. What happens when gamers move on and their recycled 1st party doesn't work anymore? I owned a Wii U and waited for games. More games where canceled then released on the system. When you go to a store there is a full stock of Wii U consoles. They also have the same launch line up sitting on shelves. You can argue that Nintendo is profitable but it's only because of the 3DS. There are more games for it and it sells because it has the support. While at the store a man was thinking over buying a Wii U console. I asked him if he was going to buy it and he said that he didn't know. I told him,"Do you see the games up there? That's the launch line up and it hasn't changed since November.". When it comes down to it who wants to buy a 400 dollar console just to gather dust under your TV?

Posted:A year ago

#27

Greg Wilcox Creator, Destroy All Fanboys!

2,196 1,176 0.5
@Jim: i was going to take a little dig at Origin, but I've avoided using it, so I was hoping someone would chime in with what I was kind of thinking. So thanks. Nintendo clearly wants to be in charge in terms of what is distributed and how it gets to its users. This is both good and bad for a few reasons (as in waiting for games to get approved and up on the eShop to buy seems to take for-ever).

Random thoughts time:

Nintendo's main problem... it's actually Nintendo at the end of the day. People who don' t own a Wii U yet throw stones at it are a secondary issue because if the darn thing had the same unique games the 3DS is getting , we'd probably not hear much of a damn thing about it "failing". By any sort of speculation, something like Watch_Dogs SHOULD be a big hit on the console if it's as good as the other versions from a gameplay perspective.

Granted, I'm betting it takes less time to pump out a 3DS game, but the company SHOULD have seen clearly that its first party teams weren't going to get games out on the Wii U in a decent enough window that some fans (and more importantly, consumers looking at that box and wondering what it did differently outside of the GamePad experience) were expecting to see.

No Fire Emblem, Megaten, Animal Crossing, first party GT/Forza-style sim/arcade racer (something missing on a Nintendo console for a few cycles) and so forth and so on plus a decent third-party lineup unfairly knocked in many reviews by jaded critics who waste time comparing them to Xbox 360 and PS3 titles instead of taking a fresh look at them from the perspective of a Nintendo-ONLY owner who might want to drop $50 or $60 on a game they never played - all of that is making for an uphill road.

I've noticed in asking around among friends, a few strangers and in my own habits that we seem to buy LESS Nintendo home console titles than we do on other systems. not because there's "nothing to buy" (the library is actually a decent enough size and variety if you have an open mind), but because some of their gaming habits are different. That won't change much even if Nintendo manages to pull of a major surprise announcement on the console. So far Bayonetta 2 (which is "old" news) seems to be their only "wow" card for 2014, as everything else they announced really wasn't unexpected and it's all "just you wait - it'll be really good!" and no concrete release dates on most.

Of course, Nintendo isn't helping withnothing a bunch of big and small niche titles on the way (as noted, The Wonderful 101 looks great, but Platinum's game isn't going to be a breakout smash at all. It'll just do well enough to make Platinum fans who waited to buy it happy and maybe not covert others into committing to a purchase. Smash Bros.? Yeah, it'll sell... but it's still a "who cares" title outside the Nintendoverse.

The same goes for Mario Kart 8. Yeah, it's a huge game but it's also one where you can have a ton of people playing it (and not buying it) thanks to someone having three extra controllers in the house. I've never bought a Mario Kart game after the first two, but I have certainly taken a controller in a bag to a friend's place many times to play against them...

Eh, whatever - I'm happy with my Wii U - I just wish there were more planning ahead before the thing was shot into stores with all those issues working against it...

Edited 1 times. Last edit by Greg Wilcox on 9th July 2013 10:38pm

Posted:A year ago

#28

Robin Clarke Producer, AppyNation Ltd

343 810 2.4
Love Peter Moore's comment. Any real gamer will have had more memorable social experiences with Nintendo games offline than (highly variable quality) EA ones online. Considering how dismal EA's offerings for the Wii were, their walking away from the Wii U is practically a major selling point for the system.

Posted:A year ago

#29

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Slade Wilson

And you call yourself an analyst!

@Jim Webb

I bought a Dreamcast and most of the key games out of my own money.

Posted:A year ago

#30

Keldon Alleyne Handheld Developer, Avasopht Ltd

471 480 1.0
Bruce: Wii U = Dreamcast
There really is no reason to buy one.
Bruce: I bought a Dreamcast and most of the key games out of my own money.
Bruce: And you call yourself an analyst!

Posted:A year ago

#31

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Keldon Alleyne

Learned my lesson.

Posted:A year ago

#32

Ken Varley Owner & Freelance Developer, Writer, Devpac

40 30 0.8
Nintendo will really feel it at christmas time.

They really don't have any big system selling hitters. Especially with the Xbox One and PS4 hitting the shelves at that time.

I really want Nintendo to succeed, but in reality they need to go back to the drawing board.

Whatever the reason, the Wii-U has sold very little and developers can't guarantee making back development costs.

Nintendo need to start matching MS and Sony hardware wise, making it easy for multi-platform developers, implement a kick ass social networking connectivity, continue to innovate and most of all, use their 1st party software and IPs to make people buy.

If Nintendo had a system similar to the Xbox One and PS4, with the same multi-platform titles, then had Mario, Zelda, F-Zero etc. It would be an instant buy from me.

The Wii-U as it is tho, is no buy.

I like Nintendo, and we need Nintendo. I just think they really need to change direction.

Posted:A year ago

#33

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 497 1.1
"The problem is: That game's not coming out this holiday, based on what the company showed at E3. And if the Wii U tanks for a second holiday in a row, it's going to be that much harder to get publishers back on board."

Well, that's not really true now, is it? Nintendo shifted somewhere in the region of 2.5 to 3 million Wii U systems last Christmas, so I don't think Nintendo, or publishers, need to be worried about this Christmas season. Nintendo failed in the post-Christmas sales season, and then hit the brakes on software releases in order to compete better in the second half of the year.

For all people make a fuss about the launch of new, rival systems, several factors are forgotten. The audience overlap won't be a particularly important factor. Stock for both new systems will be limited, and most of that stock will go to early adopters, who, as with Wii U last December, will buy their new console of choice come hell or high water. There's a similar issue at play with Wii U. Very few people looking to buy the latest Mario, Zelda and Donkey Kong titles this Christmas can go anywhere other than a Nintendo system, and that's Nintendo's great strength. In that respect, Wii U's greatest competition could be 3DS. Even if the press have derided Nintendo's offerings as overly safe, Nintendo's ultimate safe title for Wii U, New Super Mario Bros U, has an attach rate of 66%. I dread to think where the Wii U would be without that Mario game. For all the negativity, safe software sells systems, and it sells particularly strongly at Christmas when families are in the market in greater numbers than any other period. We also need to remember that in most years, Nintendo do more business in the final 3 months of the year than they do the preceeding 9. At a cut-throat price point the GameCube was capable of outselling PS2 and Xbox during Christmas 2003. The question the article poses might be eye-catching, but it is the wrong question.

The question needs to be: Can Nintendo sustain the momentum they aim to create this Christmas into the longer-term? Not quite as catchy, but I think it's far more incisive and relevant.

Comparisons with 3DS also don't quite hold water, and also, from my perspective, vindicate Nintendo's decision (either due to software development issues or simple financial reasoning) to hold back key blockbusters like Smash Brothers and Mario Kart into next year. Launching both Kart 7 and 3D Land at the same time on 3DS was a huge victory for Nintendo, but, without major titles following up that Christmas splurge, 3DS declined far more than it should have done. Sales in the West in 2012 were below sales in 2011, which can be attributed to a failure to ensure regular, exclusive, quality releases. Now that's a big alarm bell for me--9 months of 2011 sales in the West, 3 months of which were awful, were higher than 12 months at the new price point with evergreen titles out.

This lesson with 3DS informs the reasoning behind Nintendo's decision to hold back Wii U launch titles, attributed to development bottlenecks, which strengthens their hand in the market--the arena that ultimately matters most. Nintendo have exclusive content launching on Wii U at retail and online every month until the end of the year. In the very near term, sales won't hugely improve, but it is the beginning of Nintendo providing a proof that consumers need: their Wii U will remain in use, and will remain supported by quality software. It is a proof Nintendo have failed to provide so far and failed to provide for 3DS in patches in 2012, and the market responded accordingly. It is proof that Nintendo need to continue into 2014, and that is where the battle looks tougher, because third party support beyond the end of this year is essentially non-existent. That's why Mario Kart 8 is spring 2014, and why Smash Brothers is 2014: this is Nintendo's best chance of ensuring base line sales don't drop to non-competitive levels, which would send third parties away for good. Nintendo do need more to come in 2014, and really, titles like Yarn Yoshi, X, and Bayonetta 2 would ideally be out by mid 2014 along side the blockbusters Smash and Kart.

I think what's ultimately overlooked, though, and what will ultimately hold Wii U back, is that Nintendo built the system for the wrong audience. As with GameCube, they have built a system designed to bring Western third party support on board. I think that's a bad bet from the start. Most Western publishers have built their audiences on the PlayStation and now Xbox brands, and their returns on Nintendo formats are always less than that on rival platforms. GameCube, a cheaper, more technologically capable and developer friendly machine than Wii U (for its time), with more third party support than Wii U in its early days, was Nintendo's biggest failure thus far in the home console market. Nintendo built the Wii with their own developers in mind in order to save their home console business and it worked spectacularly, thankfully free of the arrogance that hindered a similar approach with the N64.

So I think what Nintendo should have done, and what they should do if they want to remain competitive in the long-term, is expand. Nintendo software sells Nintendo systems. Nintendo are always the number one publisher on their systems. So provide more first party and Nintendo published software for consumers to buy, rather than banking on major third party support. I know it's not easy for Nintendo to expand, but they have the cash to expand more aggressively and rapidly than they have been doing, particularly in terms of Western operations. It would be an investment in their long-term future as a platform provider, and an investment in their ability to consistently supply software. Many people deride Nintendo's platforms as a place just to play Nintendo's software, the implication and sometimes outright statement being that is a secondary console, an afterthought, an occasional place to game, but with enough Nintendo software, a place to just play Nintendo's titles becomes a much more permanent and competitive prospect.

Edited 1 times. Last edit by Daniel Hughes on 9th July 2013 12:12pm

Posted:A year ago

#34

Slade Wilson Financial Analyst

14 11 0.8
Woah this comment section certainly took off with discussion. We have to be real careful with hyperbole

Posted:A year ago

#35
@Slade -
You note the defensiveness of some in the sector when they get pushed back to the wall - and things they supported are questioned! A few months ago you would have been flamed by the Nintendo fanboys to even suggest errors in the Wii-U approach. Now you have to wade through 1,053-word comments to face the reality! There will be a lot of anger if this platform fails - though developer fall-out seems to have been minimized.

This is a momentous point for all of us - before the Gen-8 race has even started and we have a first wavering entrant!

Edited 1 times. Last edit by kevin williams on 10th July 2013 2:23am

Posted:A year ago

#36

Henry Durrant Programmer, SUMO Digital

52 43 0.8
In my opinion :
In the end, Nintendo have a large install base of Wiis and a lot of familys will look to buy a WiiU instead of a XBone or PS4 if the price is right - especially that it's backwards compatability means you can play all your old Wii games on it. Young adults and above however will mostly ignore the WiiU.

Posted:A year ago

#37

Adam Campbell Associate Producer, Miniclip Ltd

1,217 1,050 0.9
@Daniel Hughes

Always enjoy a well thought out post. Last two paragraphs in particular.

Posted:A year ago

#38

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