With sales of Nintendo’s Wii U system dying down, and a net loss for the third year in a row, the video game company is facing heavy competition from Sony and their Playstation 4 console. The official figures for this past fiscal year report that only 2.72 million units were sold, compared to a projection of 9 million, leading many to wonder what went wrong and caused this downfall. Whatever may be the cause of this dip, the failing sales of Nintendo’s Wii U system signals a need for the video game company to seek a new angle with which to market their system. Analysts are looking to identify exactly what the issues are with this system, and what will be needed to fix them.
One big issue with the Wii U system is the fact that hardware sales equate to a net loss; the console costs more to make and distribute than the company makes off of its sale. Because of this, Nintendo has to rely on software (game) sales to make up the deficit. Unfortunately for them, the figures for this system have not been as promising as they were expected to be. To make matters worse, the 3DS portable game system, which has been contributing to the bulk of the company’s revenue, is also selling at rates less than were projected. With a downturn in sales of its more profitable hardware as well, there is pressure on Nintendo to come up with some big ideas to turn their financial situation around.
The numbers show that there may be even more cause for concern in terms of software sales for the Wii U. For the fiscal year which ended on March 31, less than 19 million games were sold to consumers, compared to about 26 million sales of games for the original Wii system. These numbers tell us that many are hesitant to make the move from Wii to Wii U, likely due to a lack of big-name titles on the system. Nintendo has stated that they intend to address the failings of the Wii U sales for software by focusing on the main feature that sets the Wii U apart from both the Wii and its competitors: the gamepad controller. The company hopes that putting this unique feature on display will aid in a resurgence of interest in the console. The gamepad features a touchscreen interface which allows players to interact with the game being played on the console, but many games have not made substantial use of this feature. Considering that much of the cost involved in producing the Wii U comes from the gamepad, Nintendo is planning on developing more games that feature it in an integral way that makes the console stand out from others. Details are sparse on how this will be done, but Satoru Iwata, president of the company, stated that more information will be released about these projects at the Electronic Entertainment Expo, also known as E3, in June.
Nintendo is also seeking to enhance their selection of fitness-oriented games for the Wii U in the coming months. The first Wii Fit, released on the original Wii console, was a very successful game that featured a unique balance board controller to control the game’s activities. A focus on more lifestyle improvement games, which helped the Wii gain the success that it did, is one of Nintendo’s main plans to reinvigorate the struggling Wii U console. While Wii Fit U did not have the same success as its predecessor, the company’s statements hint that games in this same niche will likely be coming out for the Wii U in an attempt to draw in consumers in the near future. In addition to fitness games that are in development, Nintendo is also looking to bolster sales with the release of Mario Kart 8 and the newest game in the Super Smash Brothers series, both of which are well-established franchises within the company’s portfolio of games with a huge fan base. These two titles are part of the reason that projected sales of the Wii U over the next fiscal year are expected to reach 3.6 million units, almost 1 million more than were sold this past year.
Compared to competing consoles in the video game industry, it seems that the Wii U has been a disappointment to gamers and game producers alike. Despite the failure in sales that the Wii U has faced since its launch 18 months ago, Nintendo remains confident in its value, and is projecting to see an increase in sales and profit in the coming year.Only time will tell whether the new ideas which the company is planning to implement will succeed, and whether it will be enough to bring them back into the status of successful competitor in the video game console market.