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Nintendo prepares for massive losses, expects Wii U to tank

Jonathan Lester
Nintendo, Please understand

Nintendo prepares for massive losses, expects Wii U to tank

Forecasts slashed from 9 to 2.8 million sales

Nintendo have decimated their Wii U sales projections by nearly two-thirds following a torrid few months, predicting an enormous loss at the end of the financial year. Satoru Iwata is on damage control once again - but will investors "please understand" this time?

Without further ado, let's talk numbers. According to the latest Ninty forecasts, they now expect the Wii U to sell 2.8 million units over the current financial year: a dramatic and tiny fraction of their original 9 million estimates. Even the 3DS has been underperforming despite being the best-selling console of 2013, leading them to cut their projections from 18 to 13.5 million sales.

The net result is an expected annual loss of £146 million... instead of a profit of £322 million.

So how could things go so badly for Nintendo? We all know the answer to that: despite a handful of great games scattered throughout 2013, Nintendo failed to market or advertise the Wii U effectively, leaving punters blissfully unaware at best and contemptuous at worst at a time when they should have been flogging consoles by the boatload. Just when the Wii U finally started to pick up steam, the PS4 and Xbox One seized the limelight, all while Nintendo shockingly failed to secure anything resembling third-party support.

On the 3DS front... I don't know. Everyone should own one. Seriously.

Nintendo president Satoru "Please Understand" Iwata, however, suggests that the recent price cut was a key factor in their revised projections. "In particular, sales in the US and European markets in which we entered the year-end sales season with a hardware markdown were significantly lower than our original forecasts, with both hardware and software sales experiencing a huge gap from their targets," he wrote in the report.

"In addition, we did not assume at the beginning of the fiscal year that we would perform a markdown for the Wii U hardware in the US and European markets. This was also one of the reasons for lower sales and profit estimates."

The fact that he's still in a job continues to amaze and confuse us.

We expected the Wii U to receive a modest but appreciable upswing over Christmas, but Sony managed to accomplish the impossible by actually securing some semblance of a supply chain over the last few months, stopping Nintendo's console from fully capitalising on any next-gen stock shortages. However, December did herald their most successful month of Wii U sales to date in the US.

Is it crushing time? I feel like it ought to be; that magical paragraph where I pour scorn onto Nintendo's decision making and performance. But I'm not going to. In our New Year's Podcast, I promised to be more upbeat about the Wii U - seeing as I'm a day-one adopter - concentrating on the all-important games and the way playing them makes us feel, not grim and cynical numbers on a balancesheet.

I'll... erm... get right on that once Nintendo delivers Mario Kart 8, Super Smash Bros and Bayonetta 2 - then enjoys their own crushing time with X.

For now, tell us: did you buy a Wii U in the last year or over Christmas? If not, why not, and what would make you take the plunge?

Add a comment10 comments
MattGardner  Jan. 17, 2014 at 10:52

I made no such promise. Crushing article (sort of) incoming :p

Last edited by MattGardner, Jan. 17, 2014 at 10:52
DivideByZero  Jan. 17, 2014 at 11:09

Sadly I saw this coming a mile off, long before the release of the Wii-U.

Nintendo wrote off proper gamers with the Wii. It was gimicky and under powered and the "proper" games that did come out were few and far between. Nintendo made their money on the Wii with the Mum's fitness / people that have never gamed games type games and so when it comes to upgrade time, those people don't care.

Factor in that the next console, the Wii-U was still an underpowered box and has a very limited choice of games for it and so you don't have much of a draw to it.

Jon listed 3 games he is waiting for. Basically, those three games will have all hope of saving Nintendo's console business pinned on them and quite frankly, I don't think it's going to be enough. Not now we have Next-Gen.

Maybe this will be like manual CPR, a bit of a hard slog just to keep the heart beating until something better happens... but what and when?

Surely Nintendo should look at sacking off consoles and start making third party games for PS4/XO/PC and focus their efforts on the portable market which is doing much better than the competition.

ChaoticSound  Jan. 17, 2014 at 11:26

Nintendo has two major problems in the wii u.

1 - Lack of games. I think there's only 5 games announced for 2014 (super smash, mario kart, donkey kong, bayonetta 2 and zelda). Maybe i'm forgetting some, but they're very few.

2 - Price. The current price puts it in almost direct competition with the "new" generation (only 100€ cheaper than PS4 for example). Not only the wii u have very low specs when compared but also has fewer games.
This will only aggravate as big titles start coming out (Destiny, Infamous, Titanfall, Watch Dogs, The Division, etc).

Last gen Sony had to learn the hard lesson that customers won't buy their hardware just out of loyalty. It took then almost half the gen to correct their mistakes and regain a place in the market.
Fortunately they learn it and did a great job with the launch of PS4.
Now the question is, will Nintendo learn the lesson or will they simply leave the home console market?

Last edited by ChaoticSound, Jan. 17, 2014 at 11:28
Late  Jan. 17, 2014 at 11:33

I see Iwata has stated today that he will not resign, though he takes full responsibility for the current omnishambles.
I know they're tolerant in the land of the rising sun, and CEOs can survive a lot more than they would in the West, but surely he's on his way out now...

JonLester  Jan. 17, 2014 at 11:39

@Matt: let's bring it. 8)

@DivideByZero: Agree with pretty much all of that.

Barring an unrealistically successful relaunch that could only work in Fantasy Land (a parallel universe created when the OUYA's staggering denial ripped a hole in reality - yes I have been watching Fringe recently), I don't think the Wii U can hope to be anything more than a niche console now - though I reckon it is and will be more hardcore than people give it credit for. It's got true exclusives with real pedigree and rare quality - something that will secure it a small but dedicated following, myself included.

Though you could say the same about the Neo Geo AES. :P It would certainly seem tempting for Nintendo to take advantage of other companies' hardware - something that Iwata's successor will doubtlessly mull over. If he ever leaves.

@ChaoticSound: yuuuup.

@Late: We've been saying this for months. In any other software or hardware company, Iwata would have been facing stern questions if not some form of boardroom ejection catapult.

EDIT: can't...fight...crushing time...

Last edited by JonLester, Jan. 17, 2014 at 11:54
gmdlogan  Jan. 17, 2014 at 11:41

I dream about playing Mario on PS3/PS4. Would buy them all.

wibbleboy  Jan. 17, 2014 at 12:01

Nintendo missed a couple of major opportunities when the PS4 and Xbox One were hard to find and the major titles had been put back until May.

1) They should have created an official Wii-U Premium pack with Super Mario 3D World at a very desirable price.

2) They could have pushed the angle of "Yeah, the other two consoles are here, but only have a handful of games at the moment. Buy a Wii-U which has dozens of games available right now, then but another console next Xmas."

socialjeebus  Jan. 17, 2014 at 12:22

It's a damn shame.

I don't own a Nintendo console, and haven't for a long time - I never really bought into the Wii concept.

Another big issue for me, is the lack of storage options and the online side of things.

But, anyway, the parallels between the Dreamcast and Wii U are all too apparent.

I was a huge DC fan, and in many ways it was ahead of its time.

However, the inter-generational release, quality first person titles - but few and far between, poor third party support, controllers with displays (come on - VMUs were ahead of the curve!), atrocious marketing and the complete lack of any kind of emergency plan coupled with a deer-in-the headlights response - it's just so familiar.

The 3DS though is a bargain, and I'm shocked that given how cheap you can pick one up for that anyone opted for a 2DS.

Breadster  Jan. 17, 2014 at 15:37

I was just talking with my friends last night about how awesome it would be if Nintendo made games for other platforms. I'd still be sad to see them out of the console market, despite not having bought one of their consoles for quite some time, but it would be awesome to play their big franchises on a console without a gimmick.

I can't speak for everyone but I never bought a 3DS because the 3D melts your eyes if you're not looking at it at the perfect angle, and virtually everyone turns it off anyway, and beside that I didn't see it as a big enough upgrade over the DS to spend the money on it.

googleberry  Jan. 18, 2014 at 17:22

Iwata reminds me of Hiroo Ononda somehow. You have to admire his resolution to stay

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