18 March 2013

The State of Wii U

The 18th of November 2012 saw the launch of Nintendo's Wii successor, the Wii U in North America, 12 days later, on the 30th, Europe got their hands on the system. Crowds gathered eagerly in the cold for their chance to experience the first of the next generation of home consoles. From there it's safe to say things have gone downhill for the system. Now heading into it's fourth full month on the market it seems the console's prospects are decidedly grim. 

Sales of the Wii U in US during January stood at a mere 57,000. Neither the PS3 nor the Xbox 360 have ever had such a poor month in the seven years since the release of those systems. Things improved slightly in February to 66,000 (roughly a 12.5% increase).

Some sites remarked the sales actually represented a 45% improvement on an adjusted basis, however, even taking into account that February was a shorter month with fewer shopping days and other factors it's difficult to justify such figures.

That doesn't mean there aren't silver linings to the sales data.

Macquarie Capital analyst Ben Schachter went so far as to describe them as "good", on the grounds they indicated Nintendo would meet their reduced sales target of 4 million by the end of March - they had originally intended to sell 5.5 million units by that point.

Also worthy of note is that over 70% of system sales are for the more expensive premium model.

Somewhat more impressive is that the Wii U has sold 2.6 million units so far. During the PlayStation 3’s comparative launch period 2.4 million consoles had been purchased by consumers while 2 million Xbox 360s had been bought by a similar point in that system's availability on the market.

Wii U figures have been buoyed significantly by Japan which has snapped up some 633,000 Wii U's over the Christmas period. Looking beyond Nintendo's home territory however the situation becomes somewhat bleaker.

Though Wii U sales figures for Europe aren't officially available industry insiders believe the number of consoles sold on the continent in February number in the low 10,000s. An utterly abysmal number if true and resulting from Nintendo's virtually non-existent marketing campaign in the region as much as from a sparse release schedule and the company's (and dedicated game devices generally) inability to carry over the casual market so effectively captured by the Wii.

GameStop's president Tony Barlet recently commented that the chain has seen "lower than expected" sales of the system and adding there's a need to "increase consumer awareness of the new features available on the Wii U and its tethered tablet features."

UK retailers have also called for a new strategy and a price cut.

Tesco's Johnathan Hayes commented that the system "has not captured the public's imagination yet. We believe we need a 'killer app' on the console to drive interest and sales."

While both ShopTo.net's James Rowson and Game Centre's Robert Lindsay remarked that the majority of consumers simply aren't aware the Wii U exists.

Even the Wii U's most ardent third party publisher supporter, Ubisoft, has stated their belief that Nintendo needs to drop the price of the system "in order to find its public", a strategy which worked wonders for the initially struggling 3DS. While Ubisoft remains "optimistic" about the console it's difficult to see how Nintendo can maintain the current price point for long should sales remain as they are in the US and Europe.

Further dampening the system's viability as it currently stands is the lack of developer support for the platform. The highlight of Nintendo's consoles has always been its first party content yet with games like Crysis 3 (which had a Wii U version developed) skipping the platform along with the delay of Rayman Legends so that the game could be ported to PS3 and Xbox 360 and the newly announced Saints Row 4 bypassing Wii U the pickings are looking increasingly slim for prospective Wii U owners. 

Zelda and other major Nintendo franchises will arrive on the platform at some point, the question is; will it be too little too late when they do?

In a poll of over 2,500 US developers it was found that only 6.47% were interested in developing for the platform. If Nintendo wish to turn around the Wii U’s fortunes they’ll be required to either throw significant cash as developers or rely on their own franchises – neither course appears, on the surface at least, to be enough.

As Nintendo's bigger IPs begin to arrive on Wii U as the year goes on they'll have to compete with the PlayStation 4 and the Xbox 720. Both these systems may well be $500 but will come with both returning and new IPs as well as boasting more powerful processors with improved memory. Technology doesn't always decide the fate of a console, the PS Vita is significantly more powerful than the 3DS yet sales have consistently lagged behind.

The same is true of the PSP and DS not to mention the Xbox and the PS2 - the bestselling console of all time.

What justification Nintendo will have to sway gamers to the Wii U when that happens is difficult to determine and will no doubt revolve around their core franchises which have always been enough in the past. Even the GameCube saw some of the finest games of all time and finished third in that generation a mantle the PS3 has arguably assumed in terms of game innovation.

Though it’s also possible that the PS3 will in fact ‘win’ the current generation of consoles around 2016 globally if not in the US where the Xbox 360 is set to overtake the Wii, something which is also very close to happening in the UK. 

With casual gamers either unaware of the Wii U or having migrated to smart phones and tablets and core gamers setting their sights on the next offerings from Sony and Microsoft Nintendo need a strategy to stand out and sell hardware, Mario and Zelda will only get them so far.

Industry analyst Michael Patcher has said Nintendo “misfired” with the Wii U before speculating the company will never recover. The 3DS continues to perform reasonably well but now Nintendo needs to justify the Wii U. Nintendo’s collaboration with Skylander-like near field communication (NFC) models for a Pok√©mon based game may go some way towards achieving that goal but until them Nintendo have their work cut for them.

At the very least, there’s always Bayonetta 2.

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