May 7, 2014

Nintendo Post Loss, Wii U needs help


Nintendo had a rough fiscal year to say the least. The company reported today that they have ended their fiscal year with a net loss of $230 million (23.22 billion yen). Both the 3DS and Wii U had smaller figures than the previous year as well, thought the 3DS performed better than its console brethren. The 3DS sold 12.24 million units, selling 13.95 million the year before. The Wii U on the other hand sold, 2.72 million systems, that number is world wide. The Wii U sold 3.45 million units the previous year. Wii U software did produce a few million seller titles; typically in the industry, for a AAA title, a million units units is the goal. That number though, shrinks and increases depending on a lot of factors such as development cost, marketing cost, if it is a worldwide release localization takes money as well. GameSpot has the top selling Wii U games to date and they include New Super Mario Bros. U, Nintendoland, Super Mario 3D World, New Super Luigi U, Wii Party U, and The Legend of Zelda: The Wind Waker HD, all of those titles have sold a million plus units.  The 3DS software had incredible numbers with Pokemon X and Y selling a monstrous 12.26 million copies. Other top selling games include Animal Crossing: New Leaf hitting 3.8 million units sold; 2 million unit sellers include Luigi’s Mansion: Dark Moon, The Legend of Zelda: A Link Between Worlds, and Mario and Luigi Dream Team. The success of the 3DS does excite me for the future of handheld gaming. The numbers may slip a little but there is still life in it despite the mobile market.  The Wii U on the other had has a host of issues and there are ways of rectifying the situation without dumping the hardware in favor of something new.

The Wii U is a unique case. It came off the “selling like hotcakes” Wii and follow up numbers typically falter,but not like this. The Wii U was never going to sell the same as Wii. I worked games retail during the life cycle of the Wii and judging from the people I sold units to, they were happy with their singular purchase and would not be back for the next gen. Nintendo didn’t bank on the casual audience and that was a positive for the Wii U. When coming out of E3 2011, Nintendo wanted the “hardcore” gamers back that they had possibly pushed off with the Wii. One problem with the console is the name. The title “Wii” still seems to carry a stigma with gamers as something casual, and for the casual Wii U was confusing. Was the Wii U a peripheral that you bought for your Wii? Would the Wii U games work on the Wii? Why is it a new system, but most of the games still use the Wii Remote? The Wii U, like the 3DS initially, needed to be branded something different. With Sony, you know the PlayStation brand, but know that the larger number on the end of the console name is the newest console. The Wii U needed to be named anything other than what it is, that was problem number one.

Number two is with the controller set up. The gamepad has shown some brilliance. The Legend of Zelda: The Wind Waker HD shows some massive potential, as well as titles like ZombiU and The Wonderful 101. On the other hand, a lot of Nintendo’s own titles don’t take full advantage of the gamepad. Any of the Mario titles for example, only use the second screen as a way to play the title without the TV and it feels like a wasted opportunity. Bringing the Wii remote back for anything outside of backward compatibility was another mistake. Motion gaming was a fad, much like rhythm games, they had their time in the sun and now are done. Even the power of Microsoft’s Kinect 2.0 for the Xbox One is trying to find relevancy outside of being a microphone to shout commands at the console. Nintendo brought out a 360 styled controller dubbed, the Wii U Pro Controller. The Pro Controller should have been the only other option outside of the gamepad. One, maybe two controllers per console life cycle; more than that you are just going to confuse consumers.

Problem 3 comes with multiple parts and it all focuses on software. Software pushes hardware, it is as simple as that. Nintendo, since the N64 days, have a had a problem with 3rd party developers. Whether problem being the hardware difficult to develop for, no post kit support, bad relationships, or just not going after 3rd party developers, they have a serious problem. Sony and Microsoft have good first party support, but with out the support of publisher and developers like EA, Activision, Ubisoft, Sega, Capcom, and the like; their boxes would have no traction as well. Nintendo has some of the best, if not the best, first party games on the market, but as we see, with out those third party titles, your ship can sink rather fast. During a PlayStation 4 press event, the lead architect, Mark Cerny, was telling a story about the PlayStation 3 and how hard it was for developers to makes games for it because the dev kits came with huge manuals, written in Japanese, and their tech support was horrid. Nintendo needs to see that they fit into a global gaming market. They need to cater not only to Japanese developers, but European and North Americans alike. Software droughts are common in the industry. Typically July through August is the lull the industry takes as it comes off spring releases and heads towards the fall and winter extravaganza. The drought for the Wii U, though has seemed longer than most. We had the launch titles, then a few titles in March, and then had to wait until August for Pikmin, October for Zelda, and December for Mario. There have been virtual consoles releases and some downloadable titles such as NES Remix and Toki Tori to fill gaps, but there is too much time in between releases for people to loose interest. The 3DS had banner titles from start to finish last year, Nintendo needs to treat the Wii U just the same. The final problem to the software puzzle is IP’s (intellectual properties), though they have some of the most beloved IP’s in gaming, they need to bring fresh ones to the table. Nintendo is capable of creating fantastic games in design and art style, but fail to bring anything new to the table in terms of new properties. Pikmin was incredible on the GameCube. F-Zero and StarFox showed what the SNES could do as well as showing Nintendo is more than Mario. Metroid and Zelda have grown into adult staples that provide deep game play, darker visuals, and content. Where has this creativity gone? The Wonderful 101, Eternal Darkness, Bayonetta 2, and XenoBlade Chronicles are excellent examples of 2nd party gaming that Nintendo has help flourished. Nintendo is in need of a renaissance. It needs to keep making its core titles, bring back franchises that haven’t seen the light of day in over a decade (F-Zero, StarFox, and the like), work directly with some developers to make strong 2nd party titles. The original PlayStation, during its console cycle, was the the new kid on the block, was less powerful than its competition, used a new physical format (to gaming anyways), and flourished because of the software. Software is the key to making a console successful no matter the odds. Nintendo have two heavy hitters and fan favorites still to come that could put the Wii U back on track. The impressive Mario Kart 8 hits stores at then end of the month, and Super Smash Bros. is coming this winter. Nintendo needs to complement these titles with some surprises at E3, and those titles need to be out this year.

I write this article as someone that cares for Nintendo and wants to see their home console business flourish. I have always been a fan of Nintendo, choosing to get Nintendo consoles first over the competition, and supporting them when everyone else is spelling doom. I bought a Wii U and a 3DS at launch, and love them equally. I don’t think Satoru Iwata needs to resign; I don’t think they need to give up and become 3rd party developers; and I don’t think making mobile titles is going to help in any way, shape, or form. They need to focus on software for the ailing console first and foremost. For the Wii U’s successor, they need to evaluate their business plan, the development, and their relationships with third party developers. Nintendo isn’t going anywhere. The 3DS is raking in cash and the company has enough cash reserve and equity that one failure will not sink the gaming giant. They do need to pull in more talent and exclusives. Shigeru Miyamoto is one of the best designers of all time, but is also 61 years-old. Buying a studio with fresh talent such as Monolith soft, Platinum Games, or even a larger company like Sega or Capcom could be beneficiary. You would have that talent under your banner, plus their IP’s would be exclusives. The industry needs Nintendo, just like it needs Microsoft and Sony. The big three all have their strengths and their weaknesses. They all bounce off each other and it drives creativity, innovation, and competition. I can not foresee a gaming industry without Nintendo, Nintendo just needs to either find a power-up for the Wii U, or grab a 1-up and start fresh; either way, the big N is here to stay.

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