Nintendo's Wii U sales are in a tailspin, but there is a (drastic) way out

This morning Nintendo announced the current state of its finances. The current state is not good. Following an earlier prediction of 9 million Wii U sales for 2013/2014, the company has taken a broadsword to its expectations, hacking the console’s expected retail prospects to just 2.8 million. Worldwide. Not good. Not good at all. 

The Wii U is in a tailspin. As a result, Nintendo is expecting to take another full-year loss, the second in as many years. Do not though, join the braying hordes of pitchfork-wielding torch-wavers prophesising the end of Nintendo. That’s not going to happen. But we really do need to consider exactly how Nintendo is going to move on from this point. Because this is an unprecedented situation. 

First things first. In terms of financial assets, Nintendo is in a very, very good position. It’s been stockpiling capital for a very long time, and after the success of the Wii and DS, has $10 billion to play with. As we pointed out a while back, Nintendo could fail another four console generations and keep on ticking. Nintendo--as an entity--is safe, particularly with its seemingly untouchable handheld dominance to buoy its cashflow. But the Wii U really, really isn’t. 

History is littered with the corpses of failed consoles, but rarely has a machine from one of the industry’s major platform-holders failed so hard and so fast. There’s no obvious roadmap out of this one, but it seems that Nintendo has two broad options. Firstly, it can just write off the Wii U as a bad idea (the console is a conceptual disaster, with neither the horsepower and third-party support to snare the core gamer, or the immediately comprehendible, accessible gimmick required to score another Wii-style grab of the casual market). 

That approach would allow Nintendo to pour its financial and creative resources into the part of its business that is doing (very) well, making the 3DS even stronger with a slew of new software and initiatives, which could be achieved significantly cheaper than their Wii U equivalents. A significant saving can be as good as a profit, and if the Wii U’s budget can drive even greater sales for the 3DS, then on one level, things would improve. But it would be a PR catastrophe. 

If you think the doomsayers are vocal now, get ready to be deafened if Ninty ever euthanises the Wii U. There could even be fallout among the core fanbase. Nintendo fans are legendary for their loyalty, and have kept the company going through many a tough time. The pole-axing of a new, still-expensive console could potentially stretch that goodwill too far. 

The other option? Stop stockpiling and start spending. Nintendo currently has more money than God, Buddha and Cthulhu combined. Nintendo also currently has a problem with software support. Third-party Wii U games just aren’t going to happen, and Nintendo’s own development talent, as significantly talented as it is, isn’t sizeable enough to accommodate healthy, attractive release schedules for the 3DS and Wii U at the same time. If the rest of the industry isn’t going to support the Wii U (and it isn’t), then Nintendo needs to crack out some of that $10 billion, go on a studio-buying spree, and turn itself into a game factory; an in-house mini-industry developing solely for its own consoles. As strong as its output consistently is, Retro Studios cannot support the Wii U alone. 

But crucially, Nintendo needs to recruit an eclectic blend of first and second-party developers, from all corners of the globe, in order to ensure that the Wii U’s software line-up is genuinely universally appealing in a way that courts the mainstream just as strongly as the Nintendo die-hard. Almost every first-party Nintendo game is excellent. Much of it embarrasses the rest of the industry in terms of vision and quality. But that stuff alone doesn’t pull in those not already convinced by Nintendo, and those guys and gals are fundamentally the buyers the Wii U needs right now. Smash Bros. and Mario Kart won't change anything. 

Nintendo can afford to take the latter option. And it should. It needs to face up to the realities of its current situation and take bold moves to fix it. In short, it needs to stop being so conservative, stop hoping for the best, and make something happen. A global, Nintendo-run developer collective would not only help the Wii U, but it could be an incredible thing in its own right. Ninty needs to get on that. Saving for a rainy day is all well and good, but you have to actually follow through when the heavens open. 

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  • Relayer71 - January 19, 2014 9:22 p.m.

    Nintendo should release a new version of the Wii-U with: - A regular controller, not that screen-controller monstrosity - A 60GB HD (yes, welcome to 2005 Nintendo, but better than 8 or 32GB!) - A $50 price cut And release it along with a new Metroid (2D please!!!!) or Zelda game. IT WILL SELL
  • leon-hastings - January 20, 2014 7:08 a.m.

    - Storage space isn't a problem with a usb, - It has a wii u pro controller that is awesome, plus the screen monstrosity is sweet anyway - They just dropped the price for a deluxe with game - I can wait for more great games, Wind waker is awesome all over again and Mario 3d world is a blast as usual I love Nintendo and they keep giving me more reasons to keep on loving them, I just wish more people would buy a Wii u so it doesn't go the way as the Dreamcast. Which was a great system with great games, with a life cut too short.
  • RebornKusabi - January 20, 2014 5:51 p.m.

    Yeah, no. Everything he said will save the system- Nintendo needs new customers, not you... you already own it.
  • Shigeruken - January 19, 2014 8:33 p.m.

    Most NZ stores don't even stock Wii U's. Nintendo has pretended that nobody outside of their main markets matters for so long that every kiwi gamer knows that the value of their products will be hobbled by backwards policy. Strict region lock means the odds of us playing anything but AAA games is low. Still no Shin Megami Tensei 4 for example. (Not even on the eshop). It may makes things easier for them legally, but they're cutting off an entire revenue stream. I've studied Japanese at a University level, but I can't purchase any Japanese games. I can't even import niche games localized for America. Sure, this is a smaller problem. For the average kiwi, the regional price gouging is probably the biggest deterrent to supporting Nintendo. Games here cost more than they need to, in retail they cost more than a regular AAA console release in America. That's par for the course though, but on the eshop here games are on average 20%-60% more expensive than their NZ retail price. I know that a lot of regions get screwed like this by a lot of publisher, but Nintendo takes things too far for this to be acceptable.
  • CROZILLA - January 19, 2014 9:11 a.m.

    Maybe they should consider replacing Iwata...
  • shawksta - January 19, 2014 7:09 p.m.

    I have noticed a lot of people are saying that. That proposition is just flat out wrong and not the answer. People seem to forget that Iwata is the one who suggested all the things in the past that lead successful for the long term, but now because the Wii U is struggling they blame him and they want him fired? Its called learning from your mistakes. You cant expect to grow better if you dont stumble somewhere, and this is no exception.
  • BladedFalcon - January 19, 2014 10:03 p.m.

    Has he now? ever since he stepped in during the GC era, the only unquestionable success that can be pointed to him is the Wii's sales for it's first years. And even then, we don't know exactly when the idea and development for the Wii started, so for all we know it could have started before Iwata even became the head of Nintendo. I'm not saying he's been TERRIBLE. But so far, i haven't seen real proof to think he's done a great job. The Wii sold great because of it's innovative control and marketing, but it's library of games could have been better, same for the 3DS, which is doing good, but it's no DS, both in terms of sales AND games. And well, the Wii U is... *tsk* If nothing else, he's been unable to bring back proper third party support for Nintendo consoles in 10 years so far. that alone makes him a failure in my eyes.
  • shawksta - January 19, 2014 11:50 p.m.

    I know, but even then, you need to value failure, it shouldnt mean that you have no use. For all we know, failure is what Iwata and Nintendo needs to be able to succeed in something greater later. The fact that David Jaffe out of all people said this, shows how much more people need to look at things and stop looking so linear.
  • BladedFalcon - January 20, 2014 12:44 a.m.

    ...Yes, because David Jaffe is such a voice of reason, and everything he says is pure wisdom, no? Of course David Jaffe would say that, Jaffe, like Iwata, has been failing repeatedly to do anything worthwhile since he created God of War. No wonder he can relate. The point is moot anyway, Iwata already announced that he's not stepping down any time soon. So regardless of whether he deserves it or not, he's imposing his own second chance to prove me and all the naysayers wrong. Let's see if he delivers this time.
  • shawksta - January 20, 2014 12:55 a.m.

    I dont care about David Jaffe, he of all people's biggest dream is for Nintendo to be bought by Disney. Its the fact that despite this dream of his, even he doesnt think Iwata should step down and should rather accept failure and fix it from there. As you said, he rejected leaving, and so we'll see if they can learn and grow better from the downslide.
  • BladedFalcon - January 20, 2014 1:10 a.m.

    I don't think "despite" applies here. As Jaffe just says crazy shit all the time. Kinda hard to predict or understand his mindset.
  • shawksta - January 20, 2014 3:47 p.m.

    Fair enough, i'll give you that one. There is a press event later this month but we wont know if it has to do with the financial issue or not, if i have to predict, its most likely somewhere in February afterwards where Nintendo makes an official Direct/Event on the issue, otherwise its possible the upcoming one has nothing to do with it but i cant say i know everything and could be wrong.
  • Doctor_Pancakes - January 18, 2014 9:14 a.m.

    God, Buddha and Cthulhu all have a whopping $0 so... LOL
  • BladedFalcon - January 19, 2014 10:53 a.m.

  • Doctor_Pancakes - January 19, 2014 2:37 p.m.

    I though it was an odd joke to see on a gaming site. My view of it is how can fictional beings have money so I Lol'ed at it.
  • lechman - April 5, 2014 8:37 a.m.

    Buddha was a real person, you theophobe.
  • TheGooseinator - January 18, 2014 3:40 a.m.

    My God, I had no idea things were so bad! Nintendo better pull it together, because everyone who DID buy the Wii U will be furious if it becomes obsolete this fast. Looks like E3 is really Nintendo's only hope to show off they're prowess.
  • Balaska - January 18, 2014 2:24 a.m.

    Spending some money on advertising would have been good, a huge campaign last Christmas could have made the WiiU
  • GOD - January 17, 2014 10:13 p.m.

    They should form a new 1st Party studio, call it Well-Done, and hire everyone from the original Rare that no longer works for Microsoft (I doubt any of them still do).
  • shawksta - January 17, 2014 10:21 p.m.

    Funny Grant Kirkhope wishes for that, to just gather the rest of the team that left, make a studio and make Banjo-Threeie for Wii U, but they know they cant with the name.

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