Podcast: Tanking Wii U Sales (Don’t) Spell Doom for Nintendo

[DracIsBack]

Interesting to watch the commentaries on this in different threads out on the net. Perfect fodder for armchair executives to comment on how Nintendo should run their multi-billion dollar business. Lots of "oh no, they're doomed", "there's nothing they can do now", "they might as well close shop", "no options but bankruptcy". etc.

 

My big personal issue with the Wii U is really two fold. 1) Where are the games? and 2) It's a hard sell when I can play games of decent quality on my iPad or PlayBook for a couple of bucks to shell out $60 a title. Still, if Nintendo comes out with some killer exclusives, I'd be all over it and I imagine sales would pick up.

 

My own armchair CEO thought: If I were Apple Inc and sitting on $100 billion+ in cash, I can see an acquisition target - a leanly run company with a revenue stream, similar company philosphies and a lot of iP with a tendency to create disruptive technolgy ...

Edited February 19, 2013 by DracIsBack

[akator]

My own armchair CEO thought: If I were Apple Inc and sitting on $100 billion+ in cash, I can see an acquisition target - a leanly run company with a revenue stream, similar company philosphies and a lot of iP with a tendency to create disruptive technolgy ...

 

Apple is very happy selling games made by other people for a 30% cut and no significant investment. That's a pretty cushy deal. Why would they want to get into the content creation business when they're already the most valuable company in the world from selling other people's content?

[Atariboy]

well, assuming the money in the bank is not widely fluctuating, all that fluctuates is the currency exchange value. 10 billion yen in the bank back then is still 10 billion yen in the bank today (assuming no addition or subtraction from the account).

 

it's a far cry from half a billion to 5 billion. it's easy to forget how much a billion is. Even a brand new chip foundry and all the associated costs is no more than a couple billion.

 

I was never a wizard with finance and account classes, so I won't argue it any further since I'm hardly the last word in such matters. But with the 700 million+ USD difference between Nintendo's listed value and what you got, at the very least it's probably not worth the bother when you're going to have someone speaking up that checks the figures and see's something different and didn't realize what you did and vice versa.

 

Either way, I was wrong about them having billions of dollars in the bank. It would've been wise to look it up first before expressing skepticism but sometimes it's hard to remember just how much money is involved in this industry until you see something like 500 million for just a launch marketing campaign for an accessory.

Edited February 20, 2013 by Atariboy

[+wood_jl]

it's called confirmation bias. people will immediately recognize and catalog things that match with their feelings and buttress their arguments while information that doesn't fit their viewpoints are marginalized and dismissed. people will remember things that confirm their opinions and throw away things that don't match.

 

Thanks, that's it! I forgot about the name. There's definitely a lot of that going on here.

 

 

fans of the Wii U will latch onto the charts that fit their view point and ignore what doesn't. the truer picture is how all the evidence stacks together.

 

Yup, and the future is unknown, although there are a few in this thread who think they know. Ouija boards? Tarot cards? Innate clairvoyance? HA HA HA!

 

If I understand the argument so far, I think this is what it must be:

 

"I'm right for buying my console, simply for the fact that I'm right. The fact that I'm right is more important than whether or not I enjoy the console. The fact that someone else may be enjoying another console (did not buy mine) is not right either, because obviously, it's more important that I'm right. I'm right, and I'm going to crow about it, rather than enjoy my console. Somebody please engage me, because - although I am not privy to inside information, I'm right, I consider myself an authority, and I want to argue about it."

 

Heh heh. Thanks for the entertainment, folks. This thread is a nice little comedy break from reality, and the stresses that come with it.

[atarian63]

The earlier thread that I recall had virtually everyone in it talking about how plentiful they were. Only a person or two (At least one that was Canadian) talked about it being in short supply in their area's.

 

At most places it seems as if the store shelves never were bare from the reports I saw. And I know that goes for Northern NY state as well if my experiences are anything to go by.

no the ealier thread had them hard to get for awhile then Nintendo got some out to the public finally, initially they were sold out nearly everywhere

[atarian63]

The Wii U was easy to get before Thanksgiving in the US. Gamestop had them online with free shipping. No bundle required. That is how I bought my Deluxe Wii U.

 

The Wii U is not a bad system, there just are not many games out for it right now. I haven't bought a game since New Super Mario Brothers, which I bought at the same time I bought the system itself.

 

The Wii U needs more exclusives. Most people will not drop $300+ just to be able to play a game or two (like I did).

gamestop had them very briefly,then out,just like everyone else. Best buy and target and most main sources were out.I found my 1st one due to knowing a manager at the local Best buy,held one for me for a few $$, couldnt find a second one for weeks unless you wanted to pay the stupid high ebay price,marked up from retail.

[moycon]

out to the public finally, initially they were sold out nearly everywhere

 

If they were sold out it was like for a couple days. Personally I never saw them sold out in my area. In fact I offered to buy and ship you one, which you declined because I believe you found one local...something like your 3rd or 4th unit?

Clearly the shortage was no where near as severe as the other two consoles that were not available for months and months anywhere.

There were never any "FIND A WII-U CONSOLE" sites, like the ones that popped up when the 360 launched. The reason why was simple. They weren't needed.

[xg4bx]

I'm not too concerned about current sales. Some strong titles can pick things up. I am concerned about future 3rd party development. I don't see it happening. 3rd parties have already shifted resources to the next Xbox & Playstation, and I don't see them abandoning those platforms to put engineers and artists back on Wii-U. HOpefully I'm wrong...

 

How many developers had their backs broken by the costs of development this gen alone? They claim to be scraping by as it is, I frankly don't know how many could afford to make the jump to a more expensive 8th gen. At the very least all you will see are sure bet sequels and indie games, the days of mid-tier developers and publishers are just about over; one mediocre selling game puts them under now, who will have the fortitude to produce games (or take chances) when the stakes are even higher?

 

At the end of the day I think you'll see middle tier developers embracing the U as a more cost effective HD option rather than breaking the bank on the other consoles.

Edited February 20, 2013 by xg4bx

[Jess Ragan]

Every time... every fucking time Nintendo hits a dip in sales (or even releases a new product) it's "they're doomed!" this and "Virtual Boy" that. That tune gets old after you've heard it for the last decade. People scoffed at the Nintendo DS and were wrong about that. People mocked the Nintendo Wii and were wrong about that. They'll keep shouting that Nintendo is finished in the video game industry until by lucky chance, the prediction actually comes true. These Nostra-dumbasses will be playing with their crystal balls for a long, long time before it does, though.

 

Has the Wii U sold poorly? Sure, nobody's debating this. Not every game console is going to be a success, but a failure doesn't necessarily spell the end of a game company. The Playstation 3 is still behind the Xbox 360 and Wii in overall sales, and its Move accessory was far less popular than Microsoft's Kinect. The PSP was soundly beaten by the Nintendo DS, being outsold two to one, and the Vita has been a debacle, with its sales figures eclipsed by the Sega Saturn and Dreamcast. Yet despite all this, Sony remains in the game, hoping that their next console will help them claim the market dominance they enjoyed from 2001-2006. I think Nintendo can afford one misstep after the massive success of the Wii and Nintendo DS.

 

Having said that, I would like to see Nintendo change its market strategy in the next console cycle. The PowerPC architecture in their last three consoles hasn't been cutting-edge since 2001, and it's time to leave it in the past. The Wii U has been struggling to keep up with the Playstation 3 and Xbox 360 in performance, and even those two machines will be yesterday's news by the end of the year. Nintendo should work harder to achieve parity with its competitors, even if it costs them backward compatibility in the process. Is this even an important feature anymore? The game companies don't seem to think so, generally abandoning it two to four years after their consoles are released. It has little long-term value, and it's not worth the trouble if it's going to hobble your system. Either offer backward compatibility with software emulation as Microsoft and Sony have, or cut it loose entirely.

[Atariboy]

Wii U's horsepower seems adequate enough to me. It looks like if programmed well, it can even surpass the Playstation 3 and Xbox 360 if some of the claims like Criterion's are to be believed. I don't know how it will fare against the upcoming competition, but it looks like it won't have any difficulty bringing new iterations of classic Nintendo franchises home in high definition. So at least from my vantage point, it's mission accomplished.

 

As for backwards compatibility, I think it's still important. The traditional benefits of it that myself and other's have discussed in past threads here are just as valid today as ever. And with everyone settling on fairly standard optical disc formats based on DVD and now Blu-Ray technology, a wide range of downloads on all three existing console's, and online accounts that people will want to take with them forward. I'd argue it's even more important and expected by today's consumer that the Playstation 4 and Xbox 720 have some level of support for their predecessor's just like the Wii U has with the Wii.

 

And personally, the ability to do a good job upscaling Wii content for an HD display is one of the aspects of the Wii U that pleases me the most. Since my tv never handled 480p content particularly well, I stayed playing 16:9 Wii releases on a 4:3 Trinitron like Metroid Prime Trilogy. So this ability for the console to handle the scaling and allow me to get pleasing results with 16:9 Wii titles on my HDTV is like getting new games without buying a single one. And the inability to play 4:3 Wii content without it being stretched to 16:9 proportions such as with Wii Virtual Console downloads is what displeases me the most with the new hardware. So at the very least, backwards compatibility and how it's implimented is important to me.

 

And I don't see what Microsoft eliminating further backwards compatibility updates several years in, Sony eliminating it to trim cost by saving on the inclusion of a PS2 chip in an emergency effort to save the platform from being way too costly to produce by eliminating as many frills as they could, or the removal of it a year or so ago on the Wii has to do with it. It's simply proof of the obvious. Backwards compatibility is most important to the consumer, the console manufacturer, and the game publisher during the opening years a console is on the market during the transition period from one generation to the next.

 

That the average Wii owner in 2012 was buying a Wii without GCN compatibility and not caring in the least for the most part isn't relevant.

 

gamestop had them very briefly,then out,just like everyone else. Best buy and target and most main sources were out.I found my 1st one due to knowing a manager at the local Best buy,held one for me for a few $$, couldnt find a second one for weeks unless you wanted to pay the stupid high ebay price,marked up from retail.

 

Reports about it being plentiful dominated that thread.

 

http://www.atariage.com/forums/topic/205553-wii-u-sold-out/

Edited February 20, 2013 by Atariboy

[JamesD]

The Wii U never sold out where I'm at and I only saw 1 empty spot in the display case since it's been out. I'm guessing most local sales were launch day and Walmart had plenty to go around.

 

The economy isn't helping Nintendo and what they really need for Wii U sales is a killer app.

At the moment many people are being cautious so any new console with limited titles is going to have slow sales for a while.

Nintendo certainly won't go belly up in a few short months just because of slow Wii U sales.

 

I think the Wii U needs one or more of their exclusives to have new, must play games that aren't on the Wii.

That means Mario and/or Link have to step up to the plate.

An also ran Mario Cart won't do here.

[godslabrat]

My own armchair CEO thought: If I were Apple Inc and sitting on $100 billion+ in cash, I can see an acquisition target - a leanly run company with a revenue stream, similar company philosphies and a lot of iP with a tendency to create disruptive technolgy ...

 

They've obviously managed to get by, but I think it was a major loss for Microsoft to NOT aquire Nintendo over the past few years. They absolutely tried... Microsoft's hardware and infrastructure combined with Nintendo's IPs would have been an amazing package.

 

Nintendo just didn't want to sell. Gotta admire that.

[Atariboy]

I really doubt they ever tried to acquire Nintendo. What would Nintendo's shareholders have gained by selling out as their console was marching to just a couple of hundred thousand units shy of 100 million where it stands today?

 

If Microsoft was out to acquire any of the traditionalist, I would think it would've been Sega. And I've seen rumors to that effect.

[godslabrat]

I really doubt they ever tried to acquire Nintendo. What would Nintendo's shareholders have gained by selling out as their console was marching to just a couple of hundred thousand units shy of 100 million where it stands today?

 

""If Hiroshi Yamauchi calls, he will be directly transferred to me." - Bill Gates, 2004

 

I admit it's a bit of reading between the lines, but it seems to be that a few offers were floated, perhaps under the table, to see how viable the purchase would have been. It's one thing Microsoft really should have done more of right away: acquired successful IPs and made them XBox exclusives. Sega would have been great! Capcom also a good choice, even Atari wouldn't have been a miss. But Nintendo... would have been a crown jewel for a new-to-the-market Microsoft.

[Atariboy]

Microsoft got off to a good start with 1st and 2nd party publishing on the original Xbox but seemed to largely abandon it after a few years. If you're not Halo (Even there, they let Bungie go) or a Turn 10 Forza game, they don't seem too interested. Look at Rare today for instance to see where some of these historic names could be had Microsoft acquired them...

 

They don't even seem to be routinely picking up quality 3rd party releases and publishing them today. Things like Microsoft publishing Outrun 2 used to be routine a few years back. I don't know, I have trouble picturing Microsoft being any good for classic Nintendo franchises. I think if anyone would make a good fit for them, it would be Sega.

Edited February 20, 2013 by Atariboy

[DracIsBack]

Apple is very happy selling games made by other people for a 30% cut and no significant investment. That's a pretty cushy deal. Why would they want to get into the content creation business when they're already the most valuable company in the world from selling other people's content?

 

Two reasons:

 

1. They don't actually make a lot of money on the content itself persay. The apps sell their devices, their cut keeps the app store running. When Apple reports record profits, it isn't from App Store revenues. They treat it as a means to sell high margin devices.

 

2. There have been rumours about Apple getting into the console market for some time. This would give them more access to exclusives and help them build a world class first party development house.

[DracIsBack]

There were never any "FIND A WII-U CONSOLE" sites, like the ones that popped up when the 360 launched. The reason why was simple. They weren't needed.

 

Same here. I always saw them on the shelves in some form at the local BEST BUY. Sometimes some configs might be briefly sold out, but they'd get more in.

 

Very different than the first Wii. I got mine late February after its first Christmas. Every time they'd get a skid in at the nearby target, it would be sold out 15 minutes after the store opened ... months after its release.

[cimerians]

It's kind of like Friday the 13th or some other horror show.

 

The last few months I keep walking passed a Target display stand near my house and the black Wii U boxes sit there and stare at me......creepily they never seem to go away...........

[Mendon]

I still say before anyone starts predicting the demise of the Wii U and Nintendo based on three months of sales, let's wait and see what 3 month sales are for MS & Sony this year when they each release their new console. The refrain might actually change from "Sales are dismal; Nintendo is doomed" to "Sales are dismal; console gaming is doomed".

 

Latest "rumor" I saw today, from a respected insider who the gaming magazines trust, says that PS4 will release with 2 packages.... a $429 version and a $529 version. For myself, I don't believe ANY console is going to fly off the shelves at a $400+ price point.

 

Add in the rumors of no BC, constant internet connection, no used games..... time will tell, time will tell.

[onlysublime]

if it's a good product, people will forgive anything.

 

take backwards compatibility. people were in uproar initially but a year or two later, no one cared and people would say that no one plays the old games anymore. the PS3 was selling pretty well even above $400. of course, part of that reason was that at the time, it was an "affordable" BluRay player that also played games (in fact, the stats showed that the PS3 was mostly used as a BRD player).

[moycon]

I can't believe Sony would release another console at such a high price point.

Hmmmmmm....Maybe if it comes with the latest disk media Red Ray super disks that hold 5 Terebits!

Ohhhhh I can't wait to get a 2160p Sony TV!!! I hope the PS4 and the TV are sold in a package deal.

 

Ok yeah I'm speculating. So what, that's been the majority of this long thread! LOL

[cimerians]

if it's a good product, people will forgive anything.

 

 

Actually a very true statement.

[amigaengine]

The only WiiU's that was hard to come buy after release was the 32Gb version and that was only for 2 weeks locally.

 

Take a shot as to why Nintendo has went through so much cash is possibly advertising (where?) and getting games made for or with WiiU features included. While it is safe to assume third parties are reluctant to release games for a new console but a little cash goes along way in getting publishers motivated.

[Mendon]

if it's a good product, people will forgive anything.

 

Some people may, I don't.

[onlysublime]

no way advertising is the reason for 5 billion gone. you could completely blanket the airwaves across radio, internet, and tv for well under a billion dollars. buying up all the commercial time for the Super Bowl at $3.8 million per 30 second spot is only about $220 million. buying a commercial spot for a CW show like Nikita is only $29000. the most expensive ads on american idol are over $400K. for a top-notch comedy, it's $250K. so there's no way $5 billion can go toward advertising. the most expensive blockbuster game takes at most $150 million to produce (and most blockbusters are made for well under $50 million). 5 billion is enormous. it'd be awesome if someone dug through the financial statements to figure out how they spent that money.