Like I Thought… Poor Wii U Sales

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Bill Loguidice
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Cycles that are special to our industry

I think ultimately the key is - and it's something we've been talking about for several years now - the market has changed. Smartphones and tablets are incredibly disruptive to all the "traditional" (past 30 years or so) form factors, be they desktops, laptops, consoles, or gaming handhelds.

We used to think that technology markets moved from great variety to just a few options, like what happened with personal computers with the move to all PC DOS/Windows and a very distant second, Mac. On the console side you eventually got down to three competitors: Nintendo, Sony, and Microsoft. In handhelds, it was just Nintendo for the longest time, then you had Sony as the Mac minor marketshare second-place equivalent. However, as we've seen, there's been something of a rebound effect to the old ways of many, many options that was kicked off with the introduction of the first iPhone and exploded once Android devices took off.

It's not really that the market has shrunk for traditional consoles and gaming handhelds - or even traditional PCs - it's just that the smartphone and tablet market has reached a bigger audience and technologically speaking, for that audience, there's not a huge difference between the capabilities of those products versus the traditional devices for their particular needs. With that new market firmly established and astonishingly huge, we're now starting to see more hardcore stuff for these non-traditional devices encroaching on those traditional form factors, be it the various physical controls for smartphones and tablets or things like Windows 8, which has the ambitious goal of being an everything OS. The overall technology landscape is in as much a state of flux as its ever been, as when we've had the shakeouts of the 80's and 90's. We'll have a shakeout again, surely, and it looks like we'll be ending up with a landscape that's very different even from now, most likely merging to a single do everything device, like a smartphone, that is a true hub and powerful enough to do everything when properly docked. There's something both appealing and scary about that, but it looks like that's where the next cycle is heading. That's probably another decade off, though. In the mean-time, the merging of the traditional with the new - like the Wii U - will continue, with relative success or failure being very hard to gauge.

This is best exemplified by the 3DS, which is considered middling for sales in every territory except Japan, despite selling more and at a faster pace than the world beating DS. That's because relative to smartphones and tablets it's just a blip on the sales radar. That doesn't make it a failure, though. Certainly the Wii U is no failure as of yet, it's just a question of how healthy it will be long-term. It seems sadly that the Vita has already failed that test and is the first casualty of the "new" market realities...

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clok1966
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its and interesting thing..

its and interesting thing.. consoles, handhelds, phones, tablets and the lightning fast growth of casual games market. I had thought what an impact the a fail at Consoles would be for Nintendo, at first I was sure it would be not fatal, but very harsh blow.. The Gamecube and its lack of success was very close to a killing blow for nintendo as far as consoles go.. In a huge way it effected the Wii quite negatively. The Wii was a HUGE unforeseen success, there is no doubt its changed how consoles are looked at, both controller wise, but what audience you can get to buy one. And you don't have to do with high budget machines.. Now think if the gamecube had been a success. There would have been much more 3rd party support for the Wii.. it was almost non exsistant at the Wii launch as 3rd parties thought the Wii was a fail before release. Some 3rd Party support and better designed 3rd party games to start could have gave the Wii some longer lasting power.. and quite possibly made it the best selling of all time.. but that is all "maybe".. But you know the failure of the Gamecube hurt the Wii in the end. The almost total lack of Interest in the Wii long term compared to the 360 and PS3 but devs is hurting the Wii-U now..The fact that 3rd Party titles sold badly on the Wii, due in no small part to the shovel ware hammered out when the Wii was a success. But even some (most) AA titles tanked..

Now how will this hurt Nintendo? Well no matter what there is Dev time, thats a loss. Then there is unit cost, I don't think Nintendo is taking a loss on each unit.. but I do think they are selling slow enough its going to be a long time before they make money on it. But the BIG ONE.. Nintendo makes a license fee on each game sold ( 3rd party), and that is where the real money is.. right now.. there is pretty much nothing being made here. THAT is a huge blow. let alone the fact 3rd Parties will soon treat any console form Nintendo like the plague. A fail from nintendo in the console market bodes SEGA like futures for Nintendos consoles .

Dominating the handheld market is wonderful .. and will keep Nintendo in that game.. for awhile.. OPINION: nobody will pay $300 for a game machine when phones will do almost as much and they are already purchased for other reasons. Nintendo s days of moving 1000's of units on handhelds weekly are coming to an end. The 3DS showed a chink.. and its going to be exploited. $300 hand held are done.. Nintendo is breaking even on hardware (3ds, Im sure they make money on the DS).. Losing on Console hardware.. so software is it for profits.. and $3-40 handheld games will not last against $.99 or $5 ones.. heck even $10 ones...

the Fail of the Wii-U will have more then monetary repercussions long term.. IF it fails.. Bill mentions its much to soon to stick a fork in it.. and while the Game cube is not really a failure, it was considered less then good.. it built steam slowly and built a a ok market by its end.. One Killer App for the Wii_U could turn the tides quite quickly.. and who knows..

i think we all agree, big changes in the OLD console/handheld game world are coming.. its not going to be a standard build release cycle as it has been for 20 years..

Jacob Marner
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Even if the Wii U fails (and

Even if the Wii U fails (and yes I also think it is a piece of junk) I don't think it will make much of a dent in Nintendo's financial situation. Their main source of income in the handhelds - and since the NDS/3DS are still dominant that goes well.

If anything is going to make Nintendo go out of business it is the competition from the mobile market. Why should people pay a lot of money for a game on handheld Nintendo machine when they get something at a much lower cost on a iPhone/iPad/Android device? Mobile gaming is really on the rise and I predict that it might very well be what kills Nintendo in the future. I see friends and family switching to mobile devices for all their handheld needs.

And as I said, I think the PS4/Xbox720/WiiU will be the final console generation as we know it. From then on it is cloud only. For the same reason I don't see Microsoft or Sony selling hardware at a loss on the next generation on consoles, so I don't think that the failure of the Wii U will matter much in the long run.

Rob Daviau
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I don't know...

I do not have enough info on Nintendo actual finances to hazard a guess on what will happen to them regardless of how the WiiU does. I don't have one, I have passed on the 3DS and the WiiU so far. First because I just don't have the love for typical Nintendo fare as I used to. I could not care less for more Zelda or Mario, I wish that was not the case, part of me hates the fact I lost interest in those games but maybe it is just from growing up.
Even on the NDS my favourite titles were Moon and Dementium the Ward which for me were titles that stood apart from the tons of shovelware, casual and cash in titles that just seemed to dominate on the NDS. The 3DS has only interested me for a couple titles like Resident Evil but not enough to make me bite. So far these are the same problems for me on the WiiU. Dammit I got my hopes up, I can SEE the potential but I want 3rd parties to see the potential and bring out new and original experiences that are going to convince me they can be only done on WiiU and makes it worth having. It may still happen, I hope it does but if not then maybe Nintendo should just pull out of hardware and just do software for other consoles and platforms, I know that did not work out great for SEGA as we hoped but Nintendo might make a better go of it.

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Matt Barton
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I have to disagree with the

I have to disagree with the prevailing wind here. This will be the system that either kills Nintendo outright, or does enough damage to set it on that path. I don't see Nintendo recovering from this fiasco.

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Bill Loguidice
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Wii U
clok1966 wrote:

i found the launch stuff weak, and that's being kind. Trying to make Christmas was a mistake. They where hoping for 2 things.. the bonus the 360 got for being first (last gen), and the gimic thing working twice.. neither happened (or will IMHO). Mine hasn't been on since the week i bough it.. I dont sell my consoles.. but this may be a first.

Even though it had the second highest launch game total of any other console (only PS2 had more), I agree that it was fairly uninspiring, riddled with mostly not-quite-as-good-as-Xbox-360-version-titles. I do think this "gimmick" has potential, though, and it seems an increasing number of forthcoming games will be supporting second screen gameplay. I think that most of all has been the failing of the launch line-up, that more didn't support the system's best feature.

It's way too early to call this system a failure, unlike, sadly, it seems, the Vita. The Wii U is tanking in the UK, but so far is doing well in the US. It's middling in Japan where they're 3DS crazy, followed by everything else in the far distance. As always it's the second act that counts for Nintendo. All of their recent systems, save for the Wii, have started out slow and picked up momentum over time. We'll see if that's the case here. It most likely will, since Nintendo always has their franchise titles in their back pocket.

Again, for me, my biggest concern if I were a pure Nintendo fan would be what and when Microsoft and Sony do with their follow-up consoles. They could make the Wii U seem like dated tech very easily, but a lot of it depends on how much of a head start they give Nintendo, as well as how well they execute their inevitable variations of the second screen stuff. At the same time, it's arguable that neither Sony or Microsoft has a great deal of incentive to do anything next gen until (and if) the Wii U really starts to take off. I guess that's part of what makes this interest of ours so fun, the uncertainty...

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clok1966
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i found the launch stuff

i found the launch stuff weak, and that's being kind. Trying to make Christmas was a mistake. They where hoping for 2 things.. the bonus the 360 got for being first (last gen), and the gimic thing working twice.. neither happened (or will IMHO). Mine hasn't been on since the week i bough it.. I dont sell my consoles.. but this may be a first.

Matt Barton
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I wouldn't be surprised if

I wouldn't be surprised if sales pick up in the wake of first-party hits. There are legions of fanboys who'll rush out to buy one if it's required to play the next Zelda or Mario. There's also the possibility they (or less chance, but who knows, somebody ELSE) doing something truly extraordinary for the platform.

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Jacob Marner
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I hope you are right

I think you might be right. The Wii U is too little too late. So at least I hope you are right. I think the console feels like a cheap toy and I will never buy one for myself.

That said, people also said that the Gamecube might be the last Nintendo console. People have almost every generation predicted that Nintendo would fail but Nintendo never did. Nintendo have always played their own way and are ignoring the competition. And for some reason they always end up on top. They seem to be able appeal to the casual market in ways they Sony and Microsoft cannot. So I think it is still a bit early to say. It might sell less than expected but if it is enough to keep Nintendo's market dominance it can hardly be called a failure. According to http://www.vgchartz.com/ Wii still have 40% of the console market while PS3 and Xbox 360 has 30% each.

On a related note it seems many (include me) thinks that the coming consoles from Sony and Microsoft will be their last. After that future development will probably become fully cloud based - like OnLive - in 7-8 years or so. So it might be the end of home console systems for all sooner than you might expect.

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