Pachter: Price drop won't help Wii U
Analyst forecasts yet another bad month of sales in the US for Nintendo's console and says even a price cut wouldn't be enough to help
The NPD Group will report its US video game retail data this Thursday, and in a preview note Wedbush Securities analyst Michael Pachter commented that he's expecting Nintendo to post yet another weak month of Wii U sales. For the Wii U's fifth month on the market, he's forecasting that Nintendo sold just 55,000 units, which would represent a 17 percent decline month-over-month. Moreover, Pachter's expecting this slide to continue for Wii U, even if Nintendo chooses to implement a price cut.
"The only key hardware device to underperform our expectations was the Wii U," Pachter said of last month's numbers, "and its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console. We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."
And if the pricing on the PS4 and next Xbox is reasonable, it could really put Wii U in a bind, Pachter added: "Should the new consoles from Sony and Microsoft be price competitive, we think that Wii U sales may continue to stagnate." In fact, Pachter believes that next-gen consoles are likely to be subsidized and will therefore look even more affordable to consumers.
"We think that the next-generation consoles will perform a wide range of multimedia functions. We should learn more in the coming months, but we expect the next Xbox to have an IPTV tuner that will allow an MSO to deliver services over the Internet outside of the MSO's regulated geographic boundaries. If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model). If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history," he said.
As for March retail game sales overall, Pachter expects the numbers to be up slightly (just one percent) thanks to big AAA releases like Gears of War: Judgment, Tomb Raider and BioShock Infinite.
Hopefully this means there's an increased chance of Deus Ex: Human Revolution Director's Cut coming to PC. :D
That said, I can see - just about - them continuing with portable hardware. There's still a demand for dedicated portable games machines, and they continue to innovate with controllers and UI. But even that would be a shame - I want to see a Metroid game with the flawless gloss of Tomb Raider or Bioshock: Infinite, not something on a teeny 3D screen. :(
I really don't get this guy some times.
Does it include Easter?
(If so doesn't that guarantee more sales?)
I do agree that a price drop is a waste of time.
Nintendo needs more of their console sellers. Insert a Mario Kart + Smash Bros. and sales will improve.
Outside of downloadable titles, which honestly have been AWESOME, the WiiU software has been soft so far.
1-2 titles a month, few titles on the horizon (to the point that Nintendo did a PR to mention Disney Planes is coming to WiiU...seriously, a movie game gets a Press Release...from Nintendo!? That's a bad sign!)
It will be interesting to see how the other consoles do when released, I think PS4 does worse than WiiU and X720 does better b/c of the subsidized w/4 year live account sign-up. (I only assume MS will do something like this)
Too bad though, WiiU is the only console that is trying to do something different and long-term, more of the same with better graphics on the other consoles for me is a huge lose for the industry. WiiU offers more opportunities for interesting game play, but it's clear that the public has not yet embraced it. :(
Edited 1 times. Last edit by Art C. Jones on 15th April 2013 10:29pm
Most of the devices i use need 10 - 20 watt's for ther duty( Blue Ray/ Sky decoder). The Wii U only needs 35 Watt's to run. What i learnd of Sony and Microsoft past is: Ther next Gen Ps4 and X-Box 720 will take 70 - 150 watt's to run and you will pay around 200 more for feature's most of ther customers allready owne a device for. Family's with limited bugets for gaming/ entertainment will see nintendo as always as the best console to owne.
Next Holydays i wonder how many man will argue with her women to buy a console for 500 when thy can buy the a Wii U for the family with a game and pay 350 in total.. With nintendo's console every one is happy in the livingroom one can play, one can watch tv. To do this with a Ps4 you need a vita for 150 more. X-Box do's not have this feature. All nintendo needs to do is: make the benefit of the second screen more visible.
Could have the same effect on the business model of the manufacturer.
Having said that Sega haven't exactly set the world alight as a publisher despite amazing heritage IP.
Wii U is approaching 3 million sales. Dreamcast reached over 8 million.
This year smartphones will probably reach over 2,000 million.
If you want to reach people with a game then the world has changed.
8 days ago Pachter suggested that the price cut WAS an important factor in how Wii U would sell. Now while I'm agreed software will be the real driver of any turn around Nintendo want to enact, a lower price point will help as well.
Oh, and Bruce, Dreamcast sold 10.6 million units and came from a company with one failed home console, two failed handhelds, and four failed hardware extensions in the preceeding five years. Comparisons between it and Wii U are absolute crap, and you are an intelligent enough man to know that. You'll also note that 3DS has managed to find an audience of 30 million and climbing, despite that huge mobile audience that exists.
The problem is just how much are Nintendo losing on every Wii U that they sell?
They are subsidising for the first time in their history, throwing money at trying to get to critical mass. Something that might be impossible given the myriad better alternatives for a potential customer's entertainment spend.
On top of that nintendo has a stock vaule of over 51 billion. Nintendo can do this for 2 more generations. If sony fails this generation thy will be out of the market.. If microsoft fails this generation, microsoft will have a hard time..
Edited 1 times. Last edit by Stephan Schwabe on 16th April 2013 11:08am
Nintendo has form for this kind of approach (GameCube=Wii) - best to clean the mess up with some player bribery.
Now lets see the fan-boys paint a happy ending out of this train wreck!
I still don't see the Wii-U as being the next Dreamcast and there is just so much that can go 'right' or be done to improve the success of the console between now and any time that would be a remote possibility.
Edited 1 times. Last edit by Adam Campbell on 16th April 2013 11:17am
Well, neither of us can provide an answer to that--but with 3DS turning a profit per unit and selling increasing amounts of software at retail and crucially through digital, I doubt the amounts lost on Wii U are currently so huge as to make the device non-viable. Combined with the weakening yen and strengthening dollar, Nintendo's financials this year could actually post a small net profit, even if they are yet to return to operational profit. Though the weakened yen will also increase profits from the overseas sales of 3DS hardware and software, which could possibly even see a small operational profit.
The important point is that for the near future, Nintendo do have the financial resources to burn to turn Wii U around, or even go back to the drawing board and launch a new system.