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Nintendo has released its financial results for the fiscal year of 2013. In case you didn’t go to business school, that accounts for all the company’s commerce from April 1, 2012 to March 31, 2013. There’s a lot of information to parse out, including the N being technically profitable thanks to a weakening Yen and 3DS sales outpacing DS sales from the same time period, but likely the biggest takeaway were the first six months of Wii U sales. Some are looking at the numbers and predicting catastrophe for the Wii U, and the death of Nintendo.
But while the results aren’t great, they're hardly apocalyptic when given some context.
Let's get the hard numbers out of the way: From its November 18 launch, Nintendo reports it has sold 3.45 million Wii U consoles worldwide. This was certainly short of its original prediction of 5.5 million units, or its reduced prediction of 4 million. For January through March Nintendo only sold 450,000 units, a shadow of the post-launch sales that the Wii had.
The Wii U can barely compare to its predecessor. From the Wii’s November 2006 launch to March 2007, the system moved 5.84 million units worldwide, though Nintendo often said that number would have been bigger if the company could have produced more systems. A year later, in March 2008, Nintendo put the total Wii sales at 24.5 million--an exceptional increase. Comparatively, Nintendo hopes that it can shift 9 million total Wii Us in the same timeframe. Hmm, that sounds pretty bad, doesn't it? We think it sounds sort of bad.
However, while Wii U might look like a flop when compared to a phenomenon like the Wii, it fares much better next to the first year sales of the 360 and PS3. Microsoft sold 3.2 million systems from November 2005 to March 2006, and by March 2007 it had sold roughly 8.5 million. The PlayStation 3 had pretty similar results: 3.61 from November 2006 to March 2007, and 12.85 million by March 2008. The Wii U sales numbers fall in the middle, hardly an outlier.
Additionally, the Wii U sales compare somewhat positively to Nintendo consoles other than the Wii. The GameCube had 3.8 and 9.55 million for its respective five months and 17 months numbers. Based on Nintendo’s prediction of 9 million Wii Us sold by next March, it sounds like the executives want to match the trajectory of the GameCube. Matching the sales of Nintendo least successful home console to date sounds like a pretty low bar, but perhaps Nintendo is just aiming low with numbers it can hopefully outdo, thus making next year’s results seem even stronger.
When placed next to all those other systems, the Wii U’s lower-than-predicted sales aren’t stellar, but the numbers are still roughly on pace with its competitors circa 2005-2008 and at least one previous Nintendo system. Its biggest enemy ironically seems to be the Wii, a remarkably successful system the Wii U (or most other home consoles) just can’t compare to. The Wii’s sales perhaps raised expectations unfairly for the Wii U, if not all future consoles.
Can Nintendo turn things around and at least hit GameCube-level sales? We think it has some hope as long as it can get the flow of games going again for the rest of the year. Outside of a handful of average ports and a couple intriguing but niche titles like Monster Hunter 3 Ultimate, the past four months have been barren. Then again, the 360 and PS3 had pretty quiet beginnings as well, and only got going once marquee software like Gears of War and Ratchet & Clank arrived the following fall.
Several promising titles once planned for the launch window (Pikmin 3, Game & Wario, Wonderful 101) now all appear to finally be hitting in summer and early fall. Nintendo could then use these continually delayed games to keep a steady pace of releases into the fall with potential new entries in Super Mario, Zelda, and Mario Kart driving system sales into the holidays. Imagine how good that line-up could look compared to the potentially limited early titles on the 720 and PS4.
That plan’s success depends on Nintendo releasing titles more frequently than it normally does. We appreciate Nintendo’s commitment to quality, but if it wants to surpass 9 million consoles worldwide by March 31, 2014, the publisher needs to stop delaying so many titles. And if the Wii U can’t sell even with new entries from such major franchises and fails to match the GameCube goals for the second year in a row, then it might be time to predict the end of Nintendo, but we’re still a long way from that.