The Wii U is dead in its current form, admits Nintendo. But what now?

[MentalIlness]

It’s taken years longer than it should’ve, but Nintendo has finally woken up to the fact that it can’t maintain a closed-garden ecosystem forever. It’s been more than a year since the Wii U launched, and any expectation that the console would drive early sales and become the must-have gaming platform of the 2013 died months ago.



Now, the chances that the Wii U survives in its current form have taken a crippling blow. On Friday, Nintendo announced that it was revising its shipment forecast downwards by 6.8 million units and its sales forecast downwards by over $750M.


Losing that much money — and $750M is no small chunk of change — is a huge blow to the console manufacturer that famously led the last generation of console shipments and created a platform that had everyone talking about its advantages. For Nintendo, the problem is simple: A lackluster launch and dearth of titles were followed by month after month of lackluster launches and a dearth of playable titles.


Sales are thought to have been strong in December, with Wii U shipments picking up to 500,000 units and multiple new game launches, but there’s only so much that a good month can do, particularly given that the first quarter is typically sharply down compared to the previous year. Wii U software sales are expected to hit just 19 million units instead of the original 38 million, and the 3DS projections are also down, despite Nintendo shipping more units of the 3DSin 2013 than any other console.

In short, everything about this news is bad, and investors punished Nintendo for it on Friday. The stock shed 17% of its value in a matter of hours, falling from $18 to $14.40.

The Wii U has failed. Now what?

I’m going to go on record now and say it: The Wii U’s chance of being a major player this generation is gone. That doesn’t mean games won’t ship for it, and that it won’t offer some compelling adventures of its own — Nintendo still owns a core library of franchises that Sony and Microsoft would cheerfully kill for.



Nevertheless, the window of opportunity for the Wii U to blow open the next generation of consoles and direct the future of the market with its own hardware? That’s gone. Whatever Nintendo does now, it’s going to be fighting uphill for the rest of this generation and struggling to secure a spot for itself. Best case, it becomes a niche console with a niche usage model.


Nintendo’s president, to his credit, is aware of this. Saturo Iwata has no plans to resign, despite presiding over Nintendo’s worst failure in decades, but told the reporters, “We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”


Of course, Iwata is correct. It’s nowhere near that simple, and throwing open the gates to third-party clones and cheap, crappy imitations would be a disaster for Nintendo, quickly destroying in a matter of years the reputation for high quality that the company spent decades cultivating. Say what you want about the Wii U as a console, no one argues that the games are bad.


The problem, of course, is that Iwata may interpret the cataclysmic sales of the Wii U and the push into smartphones as proof that the world wants Nintendo to make a smartphone. Little could be further from the truth.
The Wii U: Right idea, wrong hardware

The irony of this, of course, is that Nintendo actually understood where the game market was going. The idea of a gaming tablet that you pick up and carry around the house is something that game companies like Sony and Microsoft are pouring billions into. Sony has the PlayStation Vita and its newly minted PlayStation Now service, while Microsoft has SmartGlass and its own plans for cloud driven Xbox Live gaming and back-end software rendering. Second screens are increasingly popular for gaming.

Treating the Wii U as a local rendering station and using the tablet as a portable gaming device is actually a really smart move for Nintendo to make. The only problem is, the company went with the wrong hardware in implementing it. The Wii U focused on tiny form factors and low noise — so much so that its CPU upgrades barely qualified it as last gen, while its GPU is far more advanced than the old Xbox 360 or PS3 — but isn’t anywhere near the Xbox One or PS4
.
Eurogamer.net has published a fascinating developer’s tale of what went wrong with the Wii U, including information that Nintendo’s dev tools were basically nonexistent, and that everything was precisely as half-assed as it looked from the exterior. More than anything, however, it looks like Nintendo’s decision to focus on an ultra-low-power design fatally crippled the product.

 

[cmdrdredd]

The problem I see is as follows.

1)They think releasing 2D platformers will sell a million copies and another million consoles like it did in the past. It doesn't work anymore
2) They don't understand that people want to see 3D Mario and 3D Zelda titles that are NOT re-releases and redesigns of previous games.
3) They failed to create a proper online infrastructure.
4) They rely too much on nostalgia.

If they announced today that they were working on a brand new Metroid title similar to Prime, a new 3D Mario title and have a New 3D Zelda adventure they could dig themselves out of the hole they dug. They are too stupid to realize that and I don't feel sorry for them. They just are not in touch with what gamers expect today. There is very little to get excited about for people who are what is now called "core gamers", the ones who spend the most money on gaming.

 

[MentalIlness]

I totally agree with you. And it saddens me because I am a big Nintendo fan.

They almost print their own money, and they really need to get it together. I don't want Mario on my phone either.

 

[futurefields]

Gamecube was the last time they got my money.

 

[Tom]

Based on my recent observations I think this is hogwash. I follow deal sites quite a bit and lately every time there's a Wii U deal on a bundle in the $200-250 range it sells out quickly.

And there's also getting to be a substantial library of excellent games.

All Nintendo needs to do is come up with affordable bundles and in the long run they may end up the winner of this round yet.

 

[shortylickens]

Based on my recent observations I think this is hogwash. I follow deal sites quite a bit and lately every time there's a Wii U deal on a bundle in the $200-250 range it sells out quickly.

And there's also getting to be a substantial library of excellent games.

All Nintendo needs to do is come up with affordable bundles and in the long run they may end up the winner of this round yet.

If people will only buy it at a bargain price then it really isnt a huge success.

 

[TerryMathews]

If people will only buy it at a bargain price then it really isnt a huge success.

It is if they make a profit at the bargain price.

 

[Fox5]

I think they need to take the opposite approach.

People are willing to buy a system for Nintendo games. Release a Roku style box for $100 with a tablet processor and sell your games on that. For $100, you get a box that will play Nintendo games and do Netflix streaming and whatever other services Nintendo wants to include on it. I think that would be a pretty big success and it's something only really Nintendo can offer.

 

[cmdrdredd]

Based on my recent observations I think this is hogwash. I follow deal sites quite a bit and lately every time there's a Wii U deal on a bundle in the $200-250 range it sells out quickly.

And there's also getting to be a substantial library of excellent games.

All Nintendo needs to do is come up with affordable bundles and in the long run they may end up the winner of this round yet.

A while back I think it was Costco or maybe sams club was clearancing the wiiu's and someone grabbed a Zelda bundle for $99

I think they need to take the opposite approach.

People are willing to buy a system for Nintendo games. Release a Roku style box for $100 with a tablet processor and sell your games on that. For $100, you get a box that will play Nintendo games and do Netflix streaming and whatever other services Nintendo wants to include on it. I think that would be a pretty big success and it's something only really Nintendo can offer.

The same core gamers who aren't buying it now because it doesn't have the games would scoff at mobile versions for sure. That's all it would be...mobile games on such a device. I already have a 3DS thank you.

 

[iluvdeal]

I hope Nintendo can survive this. It'll be a sad day when the other remaining major console maker of my childhood stops releasing their own consoles.

 

[Lil Frier]

I think that Nintendo, and most consumers, have known this for months. Nintendo might be narrow-minded, but they can't be blind to the fact that they are in a terrible position. I agree that the tablet concept was good, but it was done horribly.

But I don't think that a lack of quality titles is the issue. I mean, we talk all the time how everything is iterative and everyone just plays CoD, GTA, Assassin's Creed, or Battlefield. The sales go to a rather small handful of games, but the issue is that Nintendo made it hell for the third-party teams to make use of their hardware, so they're missing a lot of those games that people buy millions of.

They could certainly survive on more Mario and such. We saw Microsoft basically build its console and online empires on Halo for a few years, and it's STILL pushing the platform (I know that Halo 5 is the #1 reason I'll get a One). The problem becomes that Nintendo is still treating it like it's the 80's and 90's, where all gaming experiences are shared with the kids on your block. A lot of those kids are now gaming adults, and they don't live next to their friends, so they like having the online gaming experience.

If Nintendo had Xbox LIVE-quality gaming on the Wii U, it'd probably be in a MUCH better place. I'd actually consider a Wii U if it meant I could play Nintendo's first-party stuff online. The only time I really played the Wii was playing Mario Party or New Super Mario Bros. Wii at my sister's, because it's only intriguing to me in a co-op setting. If I could co-op it online, I'd maybe get a console for that.

I just think that online failings are the #1 reason Nintendo's in trouble. I can get a single-player platformer experience from an emulator or any number of smartphone or Steam games, without having to go buy a home console. Nintendo's hardware inferiority is probably the #2 problem (and the #1 reason the third-party situation is so bleak), but they've got to make their gaming experiences more social than they are, and that has to be done through a strong gaming network.

 

[mmntech]

Yeah, the online thing is a big issue with Nintnedo's platforms. They've had eight years to get it sorted but it's still just as bad as PSN was in the early days.

I think the big problem though comes from the relationship with third party publishers. Nintendo still treats them like second class citizens. This was painfully obvious reading that insider tell all article Eurogamer had a couple months back. A lot of people didn't know how to program for it, because the damn thing was still being worked on right up to launch. Compounded with language barriers that made getting assistance extremely tedious.

Difficulty in programming will continue to be a roadblock for third party games. Having a console with weaker hardware but a unique control scheme is not beneficial. Nor is having one that has a different CPU architecture from its contemporaries. All it does is require studios to spend more time and resources porting the game over. Time and resources that publishers don't want to spend money on, especially when there's a limited user base. Nor do third parties want to sell platform specific games. You want to make it available on as many platforms as possible with as little work as possible. It's easy to port a PS4 game to Xbox One, but not to Wii U. All this is the same reason why the Wii and DS also didn't attract very many triple-A games beyond first party franchises.

Which is fine. Nintendo has carved out success with systems that have a majority of titles that are first and second party. Except with the Wii U, there's nothing unique coming out of those studios. No killer app. 2D platfomers and HD remakes don't sell systems. Wind Waker is a phenomenal game, but it's still a 12 year old GameCube game. Something you've already played before. The Wii U is the first Nintendo console I can think of that's sold without a flagship Mario title coming within a year of launch.

When the Wii U launched, Nintendo's in house studios supposedly didn't even know how to develop games in HD. Which I suppose is a lot more difficult than I think it should be. Then again, I've been gaming in HD for a very long time (long live XGA). It just seems like Nintendo rushed the system and ultimately had no gameplay for it.

Now, Sony was in the same boat with the PS3 back in 2006 and 2007. It recovered quite nicely with the introduction of some very strong first party games. It could happen to the Wii U. However, the console is already outdated. It doesn't appeal to the Wii's audience (lack of focus on motion gaming), nor does it appeal to intermediate and hardcore gamers. Only the hardcore Nintendo fans are propping it up. Even they'll let go if they don't get any of the content they've come to expect.

 

[sxr7171]

I don't know about that stupid tablet.

This problem could be solved in 2 minutes with a price drop to $199. However that stupid tablet must have about $80-100 of BOM packed into it. So they would lose way too much money selling basically 2 systems (tablet and console) for $199.

There is a big market for the WiiU. I go to someone's house and we play boring Xbox one or PS4 games. Boring waste of time games for parties. Those systems are so "social" like sitting at home playing games with some random gamertag people in your underwear is "social". Those systems and most of the games are not meant for 2 or more actual humans to be in the same room.

The WiiU at $199 with good first party games and fun party games is an easy sell. But that stupid tablet again is so unfair. Only one person can use it at a time? It just defeated the point of the system. I want to get the system because its the only one that is fun when guests are over but I'm not paying $299 because it comes with yet another tablet. I have tablets collecting dust lying around everywhere.

What I need is the 32GB system at $199 and I have plenty of Wiimotes to get that to work for me. Don't care about the tablet at all.

 

[ImpulsE69]

Eh, the X1 and PS4 were already outdated when they came out as well. It's going to come down to games. Many of the 3rd party devs abandoned the Wii long before the Wii-U came out. The current status is nothing new. Nintendo did this to themselves, most normal people don't care about what the hardware is, just the games on it. I actually miss the old days where the games were actually different on each platform rather than the same exact games on every system save a few first party titles.

 

[sxr7171]

If people will only buy it at a bargain price then it really isnt a huge success.

It doesn't matter actually. Every mario 3d and zelda game will sell for $50-60 full price for years. There is no way those games have production budgets like AC4 or BF4 - just sit through the credits on either. They make tons of money on those first party games. A new 3d metroid wouldn't hurt either nor would an absolutely zero budget game like yet another mario kart.

 

[shortylickens]

It is if they make a profit at the bargain price.

No I'm talking strictly from a popularity standpoint. If people will gladly shell out 500 for the new Xbox but wont even consider a 300 dollar Wii, then you know right away what people would rather have.
Theres long term and short term profits. If they lose market share and exclusive franchises they will eventually die.

Not saying thats the case now, but it could happen. Losing Final Fantasy to the Playstation was the beginning of their downfall. Its just taking some time.

 

[sxr7171]

Eh, the X1 and PS4 were already outdated when they came out as well. It's going to come down to games. Many of the 3rd party devs abandoned the Wii long before the Wii-U came out. The current status is nothing new. Nintendo did this to themselves, most normal people don't care about what the hardware is, just the games on it. I actually miss the old days where the games were actually different on each platform rather than the same exact games on every system save a few first party titles.

In that sense Nintendo had the advantage. They have games that nobody else will ever have. But the idea of launching at $350 was ridiculous. We all knew it wasn't worth that and there will be a minimum $150-200 expenditure on first party titles over the next 3 years.

So the way I see it PS4, Xbox One and PC are equivalent systems. Sure PS4 and Xbox One will have a handful of exclusives but nothing to shed a tear over in the least. I like Forza but it's not a $560 game (well now $444.21 at Amazon).

For me a good strategy is to go with PC and WiiU. But WiiU is priced beyond what it's worth IMHO. I will never use that tablet. Just sell me the unit and Mario 3D for $250.

 

[shortylickens]

It doesn't matter actually. Every mario 3d and zelda game will sell for $50-60 full price for years. There is no way those games have production budgets like AC4 or BF4 - just sit through the credits on either. They make tons of money on those first party games. A new 3d metroid wouldn't hurt either nor would an absolutely zero budget game like yet another mario kart.

I'd settle for more 2D Metroidvania games if they were new, and had new areas and new enemies and new equipment and new characters.
But apparently even that is asking too damn much.

 

[HeXen]

I love my 3DS but damn they need some better games coming in. I saw the Wii U writing on the wall long ago. I think they may end up going the route of Sega and just stick to software.
Put all their first party titles on PC, PS4 and One and they'll do fine because it's only the games people want, not their hardware...Wii being the only exception.
I don't think they can ever make the hardware sustainable, but I don't see them abandoning the Wii U either so it will be interesting to see what they end up doing.

And give us some damn 2d Metroid and Castlvania games. Bring back Starfox too, sheesh.

 

[cmdrdredd]

Eh, the X1 and PS4 were already outdated when they came out as well. It's going to come down to games. Many of the 3rd party devs abandoned the Wii long before the Wii-U came out. The current status is nothing new. Nintendo did this to themselves, most normal people don't care about what the hardware is, just the games on it. I actually miss the old days where the games were actually different on each platform rather than the same exact games on every system save a few first party titles.

Nope...as far as consoles go they are top of the line. PC doesn't matter. They are not meant to be compared. You compare your Gaming PC to IBM's Supercomputers do you? That 4770k sure is outdated.

In that sense Nintendo had the advantage. They have games that nobody else will ever have. But the idea of launching at $350 was ridiculous. We all knew it wasn't worth that and there will be a minimum $150-200 expenditure on first party titles over the next 3 years.

So the way I see it PS4, Xbox One and PC are equivalent systems. Sure PS4 and Xbox One will have a handful of exclusives but nothing to shed a tear over in the least. I like Forza but it's not a $560 game (well now $444.21 at Amazon).

For me a good strategy is to go with PC and WiiU. But WiiU is priced beyond what it's worth IMHO. I will never use that tablet. Just sell me the unit and Mario 3D for $250.

There's 6 million people who think the PS4 and the Playstation brand have games worth buying and what, about 4million for the XB1? Don't use your personal bias to make a point. There is always going to be exclusives for each platform and always enough to sell a boatload of consoles.

 

[desura]

I think they need to take the opposite approach.

People are willing to buy a system for Nintendo games. Release a Roku style box for $100 with a tablet processor and sell your games on that. For $100, you get a box that will play Nintendo games and do Netflix streaming and whatever other services Nintendo wants to include on it. I think that would be a pretty big success and it's something only really Nintendo can offer.

While I think this is the best way too, it would also mean that N wouldn't be able to enjoy profits on $60 game sales.

 

[sxr7171]

The problem I see is as follows.

1)They think releasing 2D platformers will sell a million copies and another million consoles like it did in the past. It doesn't work anymore
2) They don't understand that people want to see 3D Mario and 3D Zelda titles that are NOT re-releases and redesigns of previous games.
3) They failed to create a proper online infrastructure.
4) They rely too much on nostalgia.

If they announced today that they were working on a brand new Metroid title similar to Prime, a new 3D Mario title and have a New 3D Zelda adventure they could dig themselves out of the hole they dug. They are too stupid to realize that and I don't feel sorry for them. They just are not in touch with what gamers expect today. There is very little to get excited about for people who are what is now called "core gamers", the ones who spend the most money on gaming.

That's another thing with them. They've had years to start work on some games for their new system. They knew the specs pretty much. It may be "underpowered" but it's fine for typical nintendo first party titles. This is a company that has made their system too weak to handle contemporary 3rd party games and they have treated 3rd party developers like they don't need them. So they know they need some first party games to sell the system. But they didn't work on those. Even if they thought some people would pay less for gimped versions of contemporary 3rd party titles they priced the thing within $50 of the PS4 which delivers state of the art performance for consoles. Well with the price cut it's a bit more compelling but way out of range for the experiences or lack thereof it can currently deliver. A couple of first party Nintendo games would change that.

 

[Pariah]

Eh, the X1 and PS4 were already outdated when they came out as well.

As far as the average console user is concerned, consoles are probably years ahead of the PC when it comes to gaming performance. It is a fractionally small part of PC owners that have decked out gaming PC's. Calling the PS4 and XB1 outdated is like calling the next Nissan Z or WRX outdated because it can't compete with the Zonda's and Koenigsegg's of the world. Look at the steam hardware surveys which are limited to people who game on their PC at least casually. Over 60% of steam users have a primary display running at a resolution below 1920x1080. You think those people will think the PS4 delivers outdated visuals?

The problem with the Wii-U is that it IS outdated when compared to other consoles. If someone is buying a new video card for their PC, they aren't going to buy one with the same performance as the 8 year old card they have currently. That's what would be happening for anyone with a PS3 or 360 moving to a Wii U. Hardware specs aren't everything, but there has to be a tangible improvement over previous generations for people to be interested in buying it.

 

[sxr7171]

I'd settle for more 2D Metroidvania games if they were new, and had new areas and new enemies and new equipment and new characters.
But apparently even that is asking too damn much.

I would too, but the average young gamer of today wouldn't pay more than $25-30 for it. However it would sell so many systems to people like us.

 

[sxr7171]

Nope...as far as consoles go they are top of the line. PC doesn't matter. They are not meant to be compared. You compare your Gaming PC to IBM's Supercomputers do you? That 4770k sure is outdated.



There's 6 million people who think the PS4 and the Playstation brand have games worth buying and what, about 4million for the XB1? Don't use your personal bias to make a point. There is always going to be exclusives for each platform and always enough to sell a boatload of consoles.

Sure good for those people. They have no interest in PC gaming. For me I use my PC as a console. And I know with the PC based design of the consoles I won't be missing out on much. Pretty much every console game from a 3rd party is being released on PC. Watchdogs, Division etc. I can easily forgo the expense of one or two consoles to get my hands on one or two additional games.

But if I didn't have a gaming PC then either console is good but not the WiiU. Personally I'd get the cheaper one - the PS4.