Nintendoesn't any longer or why the Wii U might fail

Recently widely known (and "loved") market analyst Michael Pachter stated that Nintendo made their upcoming WiiU "sufficiently different that they are all but assured of limited third party launch support, which ultimately will lead to modest hardware sales.". Widely know (and "loved") garme jurnalizt Jim Sterling responded in his characteristically calm fashion by declaring Nintendo "DOOOOOMED". If for some inexplicable reason you wanna know my take on the topic, keep reading.

Personally I tend to agree with Pachter on this one. At least, I don't see them tie in with past successes. Whereas in former years Nintendo always had state of the art hardware (i.e. N64 and Game Cube) coupled with a stellar first and at least decent thrird party software support, that business model seems to have changed during this current generation. They went for a strategy of differentiation. By focussing on innovative controls and neglecting computing power, they were able to stand out among their competitors and still sell their product at a low price.
This worked because it was specifically marketed to and cashed in on an up to that point unknown and therefore unexploited market...the "casual gamer". Declining sales figures indicate that by now this market is almost saturated and if the average casual user is willing to take the next step into another console generation is rather questionable.


Larger than average decline of Wii sales

The major flaw of Nintendo's recent approach, to me, is the lackluster first and third party software support for the Wii, which consists mainly of shovelware. Casual customers might not mind that because they either don't know better and buy them anyway or are pleased with the few decent games that are released. The core gamer on the other hand does know when a company tries to sell him poor-quality games for the full price and isn't amused about it. Making the core audience beg for an US release of games like 'Xenoblade', that already have been localized for an English audience, doesn't help to improve the company image either. In my opinion, Nintendo lost a lot of cedibility with loyal customers during this generation. It's unwise to underestimate the damage an unsatisfied customer can cause for a company. Economists assume that on average one wronged customer will tell 8-16 people about the experience and with a probability of 91% won't do business with that company again should his complaint keep unresolved. Therefore customer satisfaction normally is one of the main objectives every company tries to achieve.

On the mobile market we have a similar development. The marketing for the 3DS focussed heavily on its glasses-free 3D effect. Considering the 3D effect is impossible to show in advertisements and about 10% of people can't even perceive it in the first place, they did an extraordinary job. The problem in this case again seems to be the premature release in order to boost short term revenue and with that a lack of first and third party software. Developers simply don't seem to know how to implement the 3D capability into their games. Sales figures dropped rapidly after the initial rush, when customers realised there were no games worth playing on this overpriced piece of hardware. A few month later Nintendo was forced to drop the price in order to push sales, because there still were no games for the system. Not until about 10 month later, sales figures increased due to christmas sales and the release of 'Super Mario 3D Land' and 'Mario Kart 7'. Recently, sales are declining sharply again. Without consistent support from new AAA game releases, which seems unlikely to me, this trend will continue.


Semaine = week; Noel = Christmas, Baisse de prix = price cut

The 3D capabilities themself turned out to be more of a gimmick. Tiring to the eyes, proclaimed potentially dangerous to ones health by the mainstream media and rather expendable when it comes to gameplay, the 3D effect becomes less and less of a selling point. What's left is a slightly improved DS with poor software support and low battery life. It might have had the most successful Nintendo handheld debut in history but in the long run, like the Wii, it will probably disappoint loyal customers.

The WiiU's unwieldy tablet controller seems to fall into the same category of "gimmicky" accessories. It makes game development and portability unnecessarily difficult. Nintendo announced that the WiiU "will definitely bring back the core gamer". But what exactly does it really offer to the average gamer? As far as we know it again will be less powerful than Microsoft's and Sony's upcoming hardware. It will most likely have fewer third party games than the other consoles. First party games may be of a high quality but usually are limited to a handful of franchises like the obligatory Mario and Zelda games. There are 23 Zelda games and apparently over 200 Mario games already. Where is the originality Nintendo shows regarding their hardware, when it comes to games? When it comes to online services like digital distribution, multiplayer gaming and community Nintendo is even further behind its competitors and doesn't seem to be able to catch up with them any time soon.

The outstanding marketing of their "otherness" was a major factor of Nintendo's success during the last years but so far they failed when it comes to the WiiU. Many people still think it's some kind of additional controller for the Wii. Even if they are able to step up marketing-wise, they won't be able to achieve the same success they had with the Wii. There won't be another Wii-hype, that led to Nintendo's long lasting dominance. Most casual users are either satisfied with what they have or already over with their "gaming phase". Those who aren't find similar products with superior motion control technology in 'Kinect' and 'Move'.

It seems to me that Nintendo is well aware of their current problems and again acts rashly. What they are trying to achieve is a headstart of at least one year before the other next generation consoles are released. With hardware that is slightly better than the recent generation, which already is 6 years old, but low-priced compared to the present state of the art, they could offer the most powerful console for a competitive price in order to gain back a share of the hardcore market. That strategy again would be one of short term revenue and probably leave customers disappointed in the long run. Does this work out for them? I don't know, it seems to depend on how high of a frustration tolerance the loyal Nintendo customer has.

Homepages of interest:
WiiU introduction

What's your take on the next console generation? Do you agree/disagree with me? Do you think Nintendo will be competitive in the future?