Times have been tough for Nintendo recently; a $15 million loss for the nine month period ending 31 December 2013 and an 8.1 per cent drop in game revenue in 2013 are just some of the less than impressive figures the Japanese electronics giant has revealed recently. The upper echelons have put on a brave face to shareholders, and in a sign of good will (or low confidence) the company’s president, Satoru Iwata, has announced a self-imposed five-month 50 per cent pay cut starting this month. So what’s to blame and what can be done to stop it?
The most apparent cause of Nintendo’s recent woes is the undeniably poor performance of its new console, the Wii U. Indeed in 2013 the Wii U shifted a mere 2.8 million units, an unimpressive figure for a Nintendo console in any year, but even more so considering that this was the console’s first full year on the shelves.
There are a myriad of potential reasons for the Wii U’s astounding under-performance. Not least was Nintendo’s frankly confused launch campaign, which failed to communicate to the public the virtues of the system’s new power and gamepad. The bewildering naming didn’t help either; let’s be honest, how many non-gamers do we know who gamers are faced lacklustre and limited selection of good, but very stale, ports of titles such as Mass Effect 3, Deus Ex and the Batman Arkham series, games that have been on Sony and Microsoft consoles for months (and in some cases, years) already.
Nevertheless, the success of Nintendo’s consoles has always rested on the quality and demand for its stellar first-party franchises. Yet even in this area Nintendo has been slow to deliver. The only real landmark first party title released last year was The Legend of Zelda: The Wind Waker HD, and even that was a remake of a game that came out for the GameCube over a decade ago.
So is it all doom and gloom for the Wii U? Not necessarily. The very fact that the console has yet to get kicked off with its generation of quality first-party titles means that many are still to come, and with them a potential lifeline for the Wii U’s sales. Indeed with Mario Kart, Super Smash Bros. and Hyrule Warriors all penned for 2014 releases and with other AAA titles such as Metroid and Animal Crossing yet to be announced, this may well be the year when Nintendo’s latest console really gets going. Reflections of the company’s recent history should also give encouragement to Nintendo’s fans and shareholders. Like the Wii U, the 3DS started its life as a sales flop, but unlike the Wii U it is now flying off the shelves. The story of the 3DS’s redemption was due in large part to the success of a hefty price cut. This should be taken note of, and Nintendo would do well to consider a similar move as executives draw up plans to turn around the Wii U’s early failure.
At a hefty £220, its pricing put the console on the back foot before it even gets going, and with the recent release of Xbox One and PS4 the Wii U needs to define its niche if it is going to survive. Nintendo’s struggling device cannot hope to compete with these consoles in terms of power, nor does it have to. When the Wii was released in 2006 it was already miles behind the Xbox 360 and PlayStation 3 technically, and yet it became by far the best selling console of the last generation, outselling the 360 and PS3 by 20 million units to become Nintendo’s best-selling home console of all time.
Furthermore, as the novelty of the latest offerings from Sony and Microsoft wears off and bank balances start to recover following the post-Christmas blues, consumers will become more and more open to the idea of a second console. With the Xbox One and PS4 offering much the same experiences and games, the Wii U may become a very attractive option indeed.
The situation is ripe for the Wii U to lure in gamers looking for something different, or at the very least gamers wanting to play the most recent iteration of the Nintendo franchises they know and love. With the Wii U’s promising 2014 first-party line-up this is a hugely important and highly achievable opportunity for Nintendo to finally reveal some good news to the gaming world.
No matter how you look at it, this is a huge year for the Japanese electronics giant, a year in which success is certainly reachable. But it is also a year in which real, potentially crippling, failure is a distinct possibility. Failure that could have long-term repercussions for Nintendo’s dedication to the home console market and thus for the entire games industry as a whole. Should they fail, the pressure on Nintendo and Satoru Iwata to release their licences to the app store, and maybe even Sony and Microsoft, may well become unbearable. If all goes wrong, 2014 could well be the year that Nintendo takes its first steps towards becoming the next Sega.