Monday Musings: Nintendo’s Doomsday Clock still lies silent, despite adversityWritten by: / / 6 Comments
Welcome to this week’s Monday Musings, a weekly meander through the random thoughts of members of El33tonline. It doesn’t always makes a lot of sense, but it does make us feel a little better sending whatever’s at the top of our minds out into the Internet ether.
This week, Oliver sorts through the news regarding Nintendo’s current financial situation, the plight of the Wii U, and why the Big N is here to stay, despite what everyone says.
There’s no way to sugarcoat the current situation that Nintendo finds itself in: The Wii U is in very poor health.
Even in Nintendo’s stronghold of Japan, sales barely spiked on the release of one of 2013′s most outstanding games, Super Mario 3D World, and despite a strong library of titles already available on the system including Nintendo Land, Pikmin 3, The Legend of Zelda: Wind Waker HD, LEGO City Undercover, The Wonderful 101, ZombiU, and the best version of Rayman Legends… Wii U has hardly made a scratch on the market selling a total of under five million units after over a year on the market.
In a fraction of the time, and with more expensive devices, Sony has sold in excess of 4.2 million PlayStation 4s while over three million of Microsoft’s Xbox Ones have made their way into the households around the world.
- PS4 and Xbox One combined units sales have already eclipsed the Wii U
Even with important games like Super Smash Bros., Mario Kart, Bayonetta 2 and the next full adventures of Link in The Legend of Zelda, it’s probably already too late for Nintendo to turn the Wii U’s fortunes around in the face of the incredible momentum that the PS4 and Xbox One currently enjoy. Why would anyone now buy a Wii U with outdated capabilities when they could opt for Sony or Microsoft’s machines?
The short answer would be because you can’t get Nintendo games anywhere other than on a Nintendo platform – if you want to play Mario, or Zelda, or Smash Bros., or Mario Kart, or Metroid, or you want to experience some of the most carefully crafted and downright delightful games available, then Nintendo is the place to play.
It would also be foolish to bet against Nintendo and decide not to look forward to what the company has to offer in the future – as the oldest videogame company, and one of the oldest companies in the world still operating, Nintendo has survived tough financial situations time and again by continually reinventing itself over a century. From starting out as a playing card manufacturer, Nintendo has gone on to invent and release toys, develop arcade and Game & Watch games, and release some of the most successful home and handheld consoles of all time.
- Nintendo DS lifetime sales stand in excess of 150 million units
Nintendo is also incredibly cash rich with no debt, which has in the past allowed the company to take big bets on systems like the DS and Wii, both of which have paid enormous dividends. Nintendo’s cash reserves have consistently hovered around the $10 billion mark, and as of September 2013 (if I’m reading the financials correctly), Nintendo had $14 billion to its name.
That doesn’t change the fact that the Wii U is in dire straits, but it certainly removes the doom and gloom surrounding the company over the last few days after it was forced to announce revised earnings for the financial year ending March 2013, slashing sales forecasts for the Wii U and 3DS by over four million apiece, down to 2.9 million and 13.5 million units respectively for the twelve month reporting period.
The 3DS, meanwhile, enjoyed great success in 2013 with an amazing slate of games, becoming the best-selling dedicated gaming device in the US during the year.
A Call For Action
On the back of the reduced sales forecasts, Nintendo’s share value dropped by a whopping 18% as investors became skittish over the company’s ability to deliver strong financial results in the future, but as we’ve already established Nintendo is a master of reinventing itself and delivering the unexpected, so why should we expect anything but the unexpected in the months to come?
There’s already been a call for president Satoru Iwata to step down from his role (which he has confirmed will not happen) while the suggestion that Nintendo become a multiplatform developer has once again grown louder, lead by outspoken market analyst Michael Pachter. The problem with that idea (one of many) is that Nintendo’s games (more so than many other developers) are built on precision input – imagine playing a Mario game on mobile – and the fact that Nintendo’s top designers also have a direct say in the development of the hardware makes them experts able to use these systems to their full potential.
Iwata has also confirmed, however, that Nintendo is currently exploring different business strategies, while studying how the use of smart devices can be used to increase Nintendo’s audience, but I personally don’t believe the company’s back catalog will appear on an iPhone any time soon – if anything, we’ll see companion apps to begin with as Nintendo tests the market.
Can You Hear Nintendo’s Doomsday Clock?
While it’s quite possibly too late to save the Wii U and turn its fortune around in the face of the PS4 and Xbox One, and as mobile gaming continues to take chunks out of the company’s handheld gaming market share, Nintendo is in no danger of faltering any time soon, if ever.
Iwata and the rest of the Nintendo leadership have recognised that something needs to change in order for the company to continue to be successful and that remaining stagnant is a surefire way to fail. Recent experiments with eShop pricing and special offers show that Nintendo is exploring different avenues and is more than willing to try new things to excite and entice customers.
The fact of the matter is that Nintendo will be able to weather the storms of multiple ‘failed’ consoles before it is forced to make a decision as drastic as moving to multiplatform development, but because investors like to see growth and aren’t in the business of giving companies the benefit of the doubt, we will continue to hear about Nintendo’s wavering fortunes for some time to come.
As people who play and enjoy games, however, we are able to give the benefit of the doubt to companies as trusted and historied as Nintendo, and even though the Wii U hasn’t been the runaway success I hoped it to be, I have no doubt Nintendo has something to ‘surprise and delight’ us with once again in the near future.
What are your thoughts on Nintendo’s position in the videogame industry? Should the publisher push forward and create a new home console, create games for PlayStation, Xbox and mobile platforms, or focus on the handheld business and get out of the home market altogether?
What are Nintendo’s core problems at the moment and what do you think the company will do next to instil confidence not only in investors, but gamers as well?