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Roundtable: Is Nintendo sounding a retreat?

Roundtable: Is Nintendo sounding a retreat?

Thu 29 Aug 2013 7:31am GMT / 3:31am EDT / 12:31am PDT
HardwarePublishing

With a Wii U price cut and a DS which drops 3D, is Iwata backing down?

Nintendo dropped two pieces of news this week with the unveiling of the 2DS and a $50 price cut for the Wii U Deluxe Edition bundle, bringing it down to $300. The new handheld abandons the glasses-free 3D feature and clamshell case design of the 3DS, but brings the price down to $130 in the process. Meanwhile, the Wii U's price cut will be accompanied by a new bundle featuring a Legend of Zelda-themed GamePad and a digital version of the WindWaker HD remake included right out of the box.

Both made for big headlines, but will they lead to big sales? Will the price cut work considering the Wii U Basic Edition was already available for $300? Is customer confusion going to be an issue with the 2DS? Do you believe Nintendo's insistence that they aren't backpedalling on 3D? Which announcement will wind up being more significant for the company? The GamesIndustry International team weighed in on the news for this week's staff roundtable.

James Brightman

It would be redundant for me to say that the Wii U desperately needed a price cut. Now that it's finally got one, I do like its chances slightly better this holiday, especially when combined with Super Mario 3D World, Donkey Kong Tropical Freeze and Wii Fit U. It's too bad Mario Kart 8 isn't coming this holiday season, because to me, it's poised to move more Wii U hardware than any other game. Even in the demo I played at E3, it looked incredibly polished and fun with new gameplay mechanics. Unfortunately, Nintendo is not selling Wii U in a vacuum and consumers are going to be looking at Xbox One, PS4, tablets and other game-playing devices this Christmas. If the hype and purchase intent around next-gen consoles is as high as GameStop claims it is, Wii U is going to have a tough time, regardless of its slightly lower $299 price point.

1

The 2DS' hingeless, child-friendly design has met with a mixed response.

Besides, price conscious parents are more likely to skip right past Wii U in favor of one of Nintendo's own handhelds. The new 2DS is likely to do gangbusters alongside Pokemon X and Y this holiday season. For $129, consumers can get a system that already has a wealth of great content - albeit now played without the 3D function. I have to agree with Brendan on that point, however; customer confusion is something that Nintendo is going to have to put considerable time into avoiding. Marketing will be key for solving this problem, but Nintendo's track record of late with marketing is pretty darn poor. The Wii U was terribly marketed, and even now with better software on the horizon I've yet to see Nintendo truly convey the value and appeal of the Wii U. Maybe they can do better with promoting 2DS.

At the end of the day, we all have to remember that Nintendo is Nintendo. The company isn't in any console or handheld race. It's racing against itself, and as long as it can boost its bottom line and post a healthy profit at the end of the year, shareholders will be happy, Iwata's job will be safe, and it ultimately won't matter one bit that Wii U sales are quickly lapped by the competition.

Steve Peterson

The Wii U will certainly do better at $299 than at $349, especially against a $399 PlayStation 4. Still, the main driver will be software, and Nintendo's got some strong offerings late this year and early next year. I don't expect a dramatic sales increase for the Wii U, though; the price cut still leaves it more expensive than an Xbox 360 or PS3. Looking ahead there's no reason to expect new must-have software every month or two. Nintendo alone can't produce Wii U titles at that pace, and third-party support is not strong and likely never will be.

"Looking ahead there's no reason to expect new must-have software every month or two"

The Wii U will sell better with this price cut and the more compelling software coming out, but it will never lead the monthly sales reports for consoles. The Wii U will probably establish a position as a strong alternative console for those gamers looking for family fun who aren't interested in shooters, RPGs, sims and sports.

The 2DS is an interesting strategy. The $129 price point will certainly be attractive and keep the overall 3DS momentum going. Marketing-wise, the naming is confusing and difficult to figure out, but that follows right in the footsteps of the Wii U. I don't think Nintendo will be able to turn the 2DS/3DS/3DS XL line into a juggernaut like previous handhelds. Continued pressure from smartphones and tablets will keep this line from becoming a superstar, but it should do quite well. If Nintendo can hit $99 with the 2DS for Christmas 2014, that would keep the line going strongly into the future.

Mike Williams

I'm going to give Nintendo a small clap for the price cut and phasing out of the Basic Wii U unit. The cut puts the Deluxe on better footing against Sony's PlayStation 4, but still leaves the system almost $100 more than the new 12GB PlayStation 3. The price cut and Super Mario 3D World will move some systems this holiday, but not as much as if Mario Kart 8 had joined the party. Together it would've been a repeat of the price cut/Mario Kart 7/Super Mario 3D Land combo that pulled the 3DS out of its slump. As it stands, Mario 3D World is all that's stopping parents from looking at the wide variety of PS3 titles, that $200 price tag, and calling it a day.

The 2DS is the real announcement that happened yesterday. The portable is an ugly little thing, but at $129 and next to Pokemon X/Y, it won't matter. It's not as portable as the 3DS, but at that size it'll certainly fit into kids' backpacks just fine.

2

This will never happen in the real world.

Consumer confusion could be an issue, but I think removing the old 3DS and leaving just the 2DS and 3DS XL would help. The 2DS instantly looks like the system you buy for your kids, while the 3DS XL competes directly with the PlayStation Vita. The $30 difference between the 3DS and 3DS XL just looks odd, while the $70 between the 2DS and XL just feels right.

Brendan Sinclair

I'm torn on these announcements. The Wii U price drop is undeniably a step in the right direction for the system, but it's a very, very small step. The Wii U Basic set was already available for $300, and savvy shoppers have been able to find even the Deluxe system for that price as retailers have looked to move the product from shelves. The addition of a few more GB of internal memory and an HD remake of a game with an art style that still looks perfectly good in standard-definition is not exactly going to get ambivalent consumers to finally pull the trigger on a purchase. The Wii U would likely be struggling no matter the asking price, as Nintendo has done a dreadful job giving people compelling software reasons to pick it up. This month's release of Pikmin 3 was the first time I purchased a Wii U game since launch. It's a good start, but Nintendo still has a long way to go on the software front.

"As for the 2DS, that system is a very tangible backpedalling on the value of glasses-free 3D."

As for the 2DS, despite Nintendo's protestations to the contrary, that system is a very tangible backpedalling on the value of glasses-free 3D. Much like the never-released Wii Vitality Sensor, Nintendo promised creative developers would find excellent new ways to use it, but those innovations never materialized. (Sadly, the GamePad may belong in that last sentence as well. We'll likely find out for certain once Nintendo releases a few more games for it.) It was essentially a vestigial organ that was hindering efforts to lower the hardware cost, so Nintendo removed it, no matter how much pride they had to swallow in the process. The result is that they now have an affordable option for parents who don't feel comfortable giving their kids access to expensive tablets with app stores that double as free-to-play minefields.

I'm generally in favor of the move, although I am slightly concerned about customer confusion. Will parents buying 2DS systems in an aisle choked with 3DS games fully understand that one works on the other? Will 3DS packaging be changed to include the 2DS logo somewhere? The company seemed to deal with these issues effectively enough in selling the DS Lite, DSi, Game Boy Pocket, and so on, but this time the name of the system is directly contradicting a primary feature of the software platform. I can't help but think it will be an issue.

Christoph Holowaty

Satoru Iwata's mantra-like statements in the last months were absolutely appropriate: The reason for the slow sales of Nintendo Wii U is not pricing, it is the lack of software which shows off the unique nature of the system. So far, people don't see enough reason for buying a Wii U and even in a price-aggressive and competitive retail landscape like some of the European markets, a lower price point wonīt save a system without compelling games.

"people don't see enough reason for buying a Wii U - even in a price-aggressive and competitive retail landscape like some of the European markets"

The timing of the price-cut is hard to understand: for the first time in almost a year Nintendo has a very strong lineup with eight big titles for the holiday season - including some long awaited system-sellers like The Legend of Zelda: The Wind Waker HD. However, retail canīt be happy with the inventory turnover of the system. During Gamescom, for example, German retail chain Saturn sold the 32GB Wii U with Nintendo Land and New Super Luigi U in the stores in Cologne for only 299 Euro - almost 100 Euro below the usual pricing. This educates potential customers that a price drop is actually possible and may prevent many from buying the system now. It is obvious that retailers are giving Nintendo a hard time and the company probably decided to concede before predatory pricing on a local basis turns into a wildfire.

However, the downgrade of the Nintendo 3DS seems to be an even stranger decision. With a global install base of more than 32 million units, a cosmetic redesign of the hardware could have been a good idea - actually extending the lifecycle. We have seen this with several Game Boys, the DS, and also the Xbox and the PlayStation. But Nintendo decided against the fashion path. Nintendo decided to kill the 3D-functionality and by association the unique sales point of the hardware. This turns the handheld effectively into an almost 10 year old gaming system anybody can buy much cheaper on ebay.

14 Comments

Robin Clarke Producer, AppyNation Ltd

321 748 2.3
Popular Comment
"This turns the handheld effectively into an almost 10 year old gaming system anybody can buy much cheaper on ebay."
Wait, do you think that the 3DS is just a DS with a 3D screen?

Posted:A year ago

#1

Adam Campbell Associate Producer, Miniclip Ltd

1,179 967 0.8
Wait, do you think that the 3DS is just a DS with a 3D screen?
That's quite interesting because the USP was supposed to be 3D. But the 3DS has turned out to be simply a better Nintendo DS with all the new Nintendo games people want, 3D not being so important.

On that note, being a better DS with new games and superior graphics, it wouldn't be fair to say customers can buy the same thing much cheaper. Its a bit like saying you can buy the PS2 instead of the PS3 or the Xbox instead of the Xbox 360.

Sure, the game play is almost identical in many cases but the system capabilities and developer support are all but the same...

Posted:A year ago

#2

Keldon Alleyne Handheld Developer, Avasopht Ltd

449 422 0.9
I like how they say it's aimed at children but feature adults in their promotional material.

Posted:A year ago

#3

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 496 1.1
Popular Comment
Agreed with Adam and Robin, but it's important to note Nintendo retreated quietly from 3D two years ago, when they completely overhauled the advertising around 3DS and dialed down the intensity of the 3D effect in their software. 2DS is exactly what Nintendo are saying it is--a device to lower the entry barrier to their 3DS software, targeting kids and families. The 3D screen is the single biggest barrier to lowering the price, so it has to go if Nintendo want to create a budget console. Ultimately, it's about selling hardware that gives more people access to Nintendo's software, and 2DS is designed to give a wider audience access to that software.



I'm not getting my hopes up, though. I also disagree with James about Mario Kart 8. I think delayed Kart 8 is a small part of exactly what Nintendo need to do. Rather than having all their big titles out at once, Nintendo need to stagger them to keep that regular supply of software chugging along. While the Kart/Land combination did work wonders with 3DS, there was also a clear downside in the West, in that the next 12 months of release were too thinly spread, with only one commercial blockbuster releasing in the West in 2012. Western 3DS sales actually dipped in 2012 because of this, and I think Nintendo understand spacing out major blockbusters like World, Kart and Smash is hugely important because it prevents the baseline sales level dipping too much.

The combination of Mario, Zelda, Donkey Kong, Wii series titles, good third party support and a price cut in the next 3 months should generate decent momentum for Nintendo, but it's critical that any momentum is followed up with titles like Kart and Smash in the first 6 months of 2014, punctuated by smaller releases like Bayonetta, before another big push in the second half of next year. The fact Kart is not being rushed into the Christmas window suggests Nintendo understand this, but whether or not they have the manpower to make it a reality remains to be seen.

Posted:A year ago

#4

Caleb Hale Journalist

155 231 1.5
Despite the fact people are going to look a little funny playing what appears to be, at first glance, a doorstop, I think the Nintendo 2DS is going to gain some traction, not only with young kids (as Nintendo intends) but with adults who have no use for 3D. The sub-$150 price point, plus the wealth of available content make it a great candidate for a cool Christmas item that doesn't break the bank. Nintendo would be smart to make some alterations to game packaging, because some might be confused about buying a 2DS but seeing 3DS on all of the boxes on the store shelves. I don't know how the response to the form factor is going to play out, because it seems Nintendo really hit their handheld stride when they started making the fold-shut build, i.e. the GameBoy Advance SP.

The Wii U remains an uncertain proposition going into this holiday season. Keep in mind, there was a Wii U SKU priced at $299 last year, and that didn't seem to bump launch sales beyond the expected crowd of early adopters. Granted, since the Wii U is going into its second holiday season, its game lineup this year is stronger than what the PlayStation 4 and Xbox One will be offering, at least as far as what people expect in the Nintendo franchise.

Nintendo needs to understand its target audience for the Wii U at this point is not the hardcore gamer who is eyeing a PS4 or Xbox One. It's the more casual crowd, those who bought an original Wii midway or late into the console's life cycle who has yet to even acknowledge the Wii U's existence much less move to buy one. Nintendo would be smart to push out the message that buying a Wii U will give you access to big-name games like Call of Duty: Ghosts, Assassin's Creed 4 and Watchdogs this Christmas, all for a price that's $100 cheaper than the two next-gen offerings from Sony or Microsoft. That's going to fall on deaf ears to the people who want to play these games with better graphics and a robust online community, but to the parent who wants to buy this console for their kids, giving them the heads up they can check out at least the main course of some of these big cross-platform games might entice frugality.

Posted:A year ago

#5

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 207 0.6
"while the 3DS XL competes directly with the PlayStation Vita. "

what is there to compete? :P :D
it will take a while and a lot until PS Vita is nearly ready to compete with 3DS.

Posted:A year ago

#6

Ralph Tricoche Studying MA, CUNY

31 66 2.1
There is absolutely a market for this. In my home we own 6 3DS, 4 of which are always on 2D mode because they are for young children. We've had a case where one of them loosened the second screen from excessive use. This device answers all these issues.
Nintendo didn't just pull this out of hat. Even in Club Nintendo they ask consumers quite clearly, did you use the 3D portion of the 3DS in their surveys.
This was a product created to answer a concern and I applaud Nintendo for doing so.
The $50 dollar price cut is obviously a move to compete against the other hardware manufacturers and their games.
Although I fully intend on getting one of the newer consoles. I see no immediate need to do so this year.
That being said, anything and everything I can get for WiiU, I will.

Posted:A year ago

#7

heirdt von braun Marketing Specialist

22 8 0.4
I think 2DS is an interesting product, but it is not for everyone. 3D matters as it is one of its biggest differentiators. However, I'm not sold on the design, it doesn't look nearly as portable and practical as the original 3DS model, and I'm pretty sure many people feel the same about this new one. The good news is 3DS has a very strong software lineup right now and the 2DS price is hard to resist. So it's functionality (portability, 3D screen, comfortability) vs. price. So, in the end I think it's a fair price, but it's not an awesome product. I would expect it to have some degree of success as price is more important than value to many.

Wii U is not solving a single problem. I don't think games are good enough and Nintendo is definitely not sufficiently prepared for November. PS4 and Xbox One have proven to have astonishing demand (at least for November), and even if we cannot guarantee high degree of success for the following months, I'm pretty sure interest will be kept by gamers as long as publishers continue supporting these systems, and we all know they will. As I said before, main Wii U problem is not price, name or even marketing. It's Nintendo's ambitions to create trends, make sure they will always have the last word, and that no one will interfere in their plans. Wii U is no different to SNES or N64 at its core. Nintendo wants to impose their philosophy without asking this industry about what they need. As a result publishers are tired to deal with them because they also have needs and do not share the same opinions. If Nintendo tries so hard once and again to demonstrate they're right, their only available option is to demonstrate success, but have failed once again just like N64 or Gamecube once have. The original Wii was awesome, but you cannot replicate that success again with the same strategy, things have changed.

Consumers have also needs, and Nintendo requires effective answers. Fans have spoken very clearly, they want Metroid and Zelda. Where are them?!. Wonderful 101 is good but it is not exceptional, and Pikmin is ok, but it is far from being a console seller and forgive my comment but sounds to me more like the product of Miyamoto's vanity. It's time to think about fans first, and demonstrate they are devoted to them. The least you want to see are angry or disappointed fans, if this happens the rest probably will buy, but you have to give something to everyone to stick with you or else they will fly away and you never know if they'll return. It is now or never, before every N-fan joins Xbox One/PS4 euphoria, and I'm afraid perhaps it's a little too little too late once again.

Edited 2 times. Last edit by heirdt von braun on 30th August 2013 1:57am

Posted:A year ago

#8

Paul Jace Merchandiser

936 1,412 1.5
I don't think Nintendo is sounding a retreat. I think they are just doing what they have to in order to survive with the Wii U and a price cut was long overdue. The 2DS move was made to expand upon their already large 3DS market. I thought that one was silly at first considering you can just turn the 3D off on the 3DS(as I do) but this is also a cost cutting measure for them. So right now I don't think Nintendo is any worse off than they were three months ago. We will know how smart these moves were come January.

Edited 1 times. Last edit by Paul Jace on 30th August 2013 1:34am

Posted:A year ago

#9

Andy Samson QA Supervisor, Digital Media Exchange

237 180 0.8
I don't see this as a retreat or a last ditch effort but a much needed aggressive push to delivering their product to the widest audience possible. Hardware wise the Wii U bundle is better valued than a gimped PS3 12GB SKU. You are comparing a next gen "deluxe" model with a "budget" model that has outdated hardware and flimsy build.

People are forgetting that there is still a Deluxe bundle that comes with Nintendo Land. This is the original Deluxe model at launch that is now made more affordable at $299.99. People have a choice to choose between the Nintendo Land or Zelda bundles. What Nintendo should have done is sweeten the Nintendo Land bundle by including a special color wii remote in the "local multiplayer" package. Either way, Wii U Party comes bundled with a black Wii remote and you can get this for only $50. Nintendo should emphasize more in playing together with the Wii U and the best multiplayer/party games can only be found on the system.

The 2DS to me is Nintendo testing the waters for their future handheld's form factor (what Nintendo calls a slate)). Little did people know is that the 2DS hardware has a large single touch screen that is only made to look like dual screens. The top screen technically is also a touchscreen that is locked out physically by a screen panel. Their future handheld can then eliminate this physical border between the screen entirely. The system can then be played like Bandai's WonderSwan which supports portrait and landscape game styles. Most people doesn't keep their handhelds in their pockets so a system that ditches the clamshell design might work as long as its size is close to 7 inch tablets.

Posted:A year ago

#10

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
I just think they are doing what they can within their current situation to push more hardware into peoples hands. And i consider the 2DS and the WiiU price drops very intelligent moves. If they can shift more hardware, it will give software developers, more reason to want to develope for the console. Because the problem with Nintendo is that they dont have enough software for there console. right now the WiiU Zelda Bundle sounds sweet. I will probably give that a shot.

Posted:A year ago

#11

Steve Peterson West Coast Editor, GamesIndustry.biz

108 73 0.7
The Wii U is becoming the new GameCube. The GameCube had some great software from Nintendo, but never got great third-party support. Still, it did pretty good for Nintendo and overall made the company a profit, I'm sure. The GameCube was not the leader of the console business, nor did it need to be for Nintendo to be successful with it. The Wii did lead the console business, but that was not necessarily repeatable. Nintendo should not be trying to be the number one selling console; they should be trying to make a good profit on console sales. Sometimes, like now, that means losing money on hardware (or breaking even) in order to profit on software in the long term.

Posted:A year ago

#12

Bruce Everiss Marketing Consultant

1,692 594 0.4
Nintendo are acting to staunch losses and to gain breathing room.
Then they will work out how to take their entertainment properties forward.
Plan A isn't working, so now they will come up with plan B.

Posted:A year ago

#13
Bruce has in his inimitable manner partially hit the nail on the head.
...so they come up with plan B.
The dropping last year of the dependance on 3D, married to the situation with the Wii-U, has seen Nintendo drive towards a more corporate centric (old school) approach to future business. While the US executive team seem to have been sidelined, NOJ has formulated a plan to buy time, defend brand and grow a new market.

The question will have to be what will the new Wii-U look like when they relaunch it in two years time!

Posted:A year ago

#14

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