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[Claude Kenni]

I understand finances are not this simple but considering how much money Nintendo have, what is preventing them from reducing the price of the Wii U?

Most of you cite the lack of games as the issue but clearly the price is a huge barrier.

Nintendo will eventually cut the price but doing so too early would cause them to lose money without gaining the benefit they should or could get later from a price drop. Price drops that aren't combined with a steady release of games do not work very well and Nintendo really can't lose possible profit right now unless they're sure the benefit is worth it.

 

[Snowden's Secret]

Saying the Wii U is doomed is not the same as saying Nintendo is doomed. Nintendo will continue to do business. The Wii U has no chance of turning it around, though.

This post is doomed.

 

[PanicFreak]

I mostly agree with the article.

It'll take at least two more consoles bombing as bad as the WiiU for nintendo to consider going third party or abandoning consoles. They have too much money and are far too stubborn.

5 billion can go in a flash of the eye. One misplaced decision can ruin the whole company. Nintendo is lucky that they are really the only company that can make money on a dedicated mobile gaming platform or they would have already gone bankrupt.

 

[The Power Of Snap]

So basically, Nintendo has a lot of cash in the bank and thats why the situation isnt bad?

Just like blackberry! It's gonna come back!

 

[Shiggy]

I understand finances are not this simple but considering how much money Nintendo have, what is preventing them from reducing the price of the Wii U?

Most of you cite the lack of games as the issue but clearly the price is a huge barrier.

Remove the basic sku, drop the premium to $199/£149.99 and get some momentum going into the holiday period.

The price isn't an issue.

 

[Opus Angelorum]

Nintendo will eventually cut the price but doing so too early would cause them to lose money without gaining the benefit they should or could get later from a price drop. Price drops that aren't combined with a steady release of games do not work very well and Nintendo really can't lose possible profit right now unless they're sure the benefit is worth it.

True but the next few months in the run up to Christmas is the strongest release period from the Wii U since launch.

 

[Sean]

Like Pixar and Cars 2, Nintendo has hit their low. Hopefully they can pull it back up.

Except Cars 2 made like 600 million at the box office and raked in tons of money from merchandising kids toys (the whole reason a sequel was made). The Wii U situation is way more dire than Pixar releasing a shitty yet successful movie.

 

[Grayman]

I understand finances are not this simple but considering how much money Nintendo have, what is preventing them from reducing the price of the Wii U?

Most of you cite the lack of games as the issue but clearly the price is a huge barrier.

Remove the basic sku, drop the premium to $199/£149.99 and get some momentum going into the holiday period.

Nintendo would lose more money on the hardware than they would make back on games.

No one cares is a bigger problem than the price.

 

[metalslimer]

I fail to see how investments in western game studios guarantee a better position...? I think a deal like the Fire Emblem X SMT-game is a way better postion to be in. Same goes for the Platinum-games exclusives. It makes a Wii U worthwile.

Haha, the platinum games are basically worthless by themselves. It's nice that they got them, but they do basically nothing when platinum games are not popular. W101 will be lucky to break 400k WW. And what exactly do you expect SMTx FE to do?

 

[Tripon]

Also if Nintendo had invested a fraction of that money into western game studios and deals they would be in a much better position. The N64 might not have sold great but Rare was a lifesaver. They continue to operate in a japanese bubble as the majority of the industry shifts elsewhere.

They recently had Next Level Games make Luigi Mansion: Dark Moon, bought out Retro and had years of difficulty getting that studio to order, had Monster games work on the 3DS port of Donkey Kong Country Returns, Kuju Entertainment is working on Art Academy.

I agree that Nintendo needs to rapidly ramp up their acquisitions or developing better relations with Western party devs.

Edit: There's also the curious case of Shin'en Multimedia who despite being an independent company, only makes games for Nintendo consoles and handhelds.

 

[Striek]

IMO thats a rather opaque analysis. Its oft-mentioned that Nintendos warchest could see them weather several storms, but that misses the point. People rarely say (in a serious tone) that Nintendo is facing a risk of bankruptcy (or "dooooooom"). It doesn't say too much about the overall market conditions they're facing.

Its more interesting to consider what a Wii U failure means for Nintendos ability to capture the console market going forward. Or more specifically, does it even impact it at all. Iwata is the one who said (of the Wii) "we shouldn't continue this business if our only target is to outsell GameCube". If the Wii U doesn't get back on track, and not only that but doesn't outsell the GC and (on its current course) doesn't really get close, where do you go? Try and capture lightning again?

Their portable line is a different matter. The 3DS is selling well as long as comparisons to its predecessors are avoided. Importantly their handheld software shipments are lower than anytime since just the original Game Boy was on the market. Should change with the fall lineup, but they still have to carefully navigate the current market trends. If portable sales decline again next-gen - which seems VERY likely with mobile continuing to grow in install base and developer attention to handhelds waning - then Nintendo will have to diversify in some way or do something crazy.


OTOH they could turn the Wii U around, and/or capture lightning again, and the handheld market might recover or at least stabilize. Like everything, wont know until it happens.

 

[SenatorBot]

Didn't they have 10 billion a few years ago and some site argued that they could have lost money for 50 years to go bankrupt?

Now they have 5 billion left and money is running out and time is running short. I really don't see how this is a good thing.

 

[Claude Kenni]

True but the next few months in the run up to Christmas is the strongest release period from the Wii U since launch.

I agree personally, dropping the price near the end of this year does seem like it would provide the most benefit. Nintendo could hold out and try to make as much money as possible but there doesn't seem to be a better time to cut the price than with games coming out and the new MS/Sony consoles arriving.

5 billion can go in a flash of the eye. One misplaced decision can ruin the whole company. Nintendo is lucky that they are really the only company that can make money on a dedicated mobile gaming platform or they would have already gone bankrupt.

I think this is completely off base, way way too much hyperbole. 5 billion can't go in the flash of an eye. One decision isn't likely to "ruin" Nintendo. They were never close to going bankrupt.

Didn't they have 10 billion a few years ago and some site argued that they could have lost money for 50 years to go bankrupt?

Now they have 5 billion left and money is running out and time is running short. I really don't see how this is a good thing.

I'm not sure why this speculation keeps happening, the article clearly states they have around 5 billion in short term investments. This makes up the entirety of the 10 billion figure.

 

[Teknoman]

I understand finances are not this simple but considering how much money Nintendo have, what is preventing them from reducing the price of the Wii U?

Most of you cite the lack of games as the issue but clearly the price is a huge barrier.

Remove the basic sku, drop the premium to $199/£149.99 and get some momentum going into the holiday period.

It'll definitely be the price, especially considering a good chain of games has started with Pikmin 3, leading to the holidays.

 

[Pancakes R Us]

The Wii U is really, really struggling, but in the grand scheme of Nintendo’s operations it actually doesn’t matter as much as you might expect.

I beg to differ. Yes, this DOES matter. Nintendo is practically irrelevant in the home console space at the moment, and if things don't pick up, a successor to Wii U won't do so well.

 

[RurouniZel]

THQs problem wasn't it's ip, it's problem was that it was badly managed.

Nintendo desperately needs to expand it's audience, and some of those IP had broad appeal...enough for many companies to pick them up after thq was scrapped.

Which ones? The only IP they had that I remember is Saint's Row.

 

[megabytecr]

In the end the Wii U will make them money at the 200-250 price range and when they market the thing.

I don't see the gamepad as the problem like some think. The Wii U name is a mistake as well as the actual Wii U console looking like the Wii.

I think that with

- Wii HD as the name people would get the idea better even with the gamepad
- Differentiate a bit more the actual console and focus attention on both the console and the gamepad
- Split the marketing between the gamepad and the Wii motion controls but showing games in HD. Why not release at launch a Wii Sports 2 and Nintendo Land together, and see what works best. Even if the gamepad is not being understand they could start with a 50-50 split between gamepad and wii motion controls and during its lifecycle to start and give more importance to the gamepad.


edit: if they have trouble with 3rd parties I agree with some on Nintendo expanding their IPs and having 2-3 mature titles, one big FPS or TPS Multiplayer game and at least one big action/adv game. Even if it does not make them money it could begin to change mindsets about Nintendo and further diversify their lineups.

edit 2: right now they are betting heavily on indies and I think this will eventually pay off. I am sure they see more interesting ideas on the indie space than on the AAA games. The Wii U is a capable console and they were betting on more 3rd party support, they should learn the lesson and have a stronger launch next time.

 

[SmokedMeat]

Warehouses full of cash? Check!
Third party exclusive games? Nope!
Timed exclusives? Nope!
...feature parity ports? Nope!

 

[Heyt]

Sure, if you want the situation to worsen.

How? Their portable segment of the business is profiteable while their console isn't. Focusing on the fraction that earns them money and avoiding losses is worsening the situation? How?

 

[The Power Of Snap]

I agree personally, dropping the price near the end of this year does seem like it would provide the most benefit. Nintendo could hold out and try to make as much money as possible but there doesn't seem to be a better time to cut the price than with games coming out and the new MS/Sony consoles arriving.



I think this is completely off base, way way too much hyperbole. 5 billion can't go in the flash of an eye. One decision isn't likely to "ruin" Nintendo. They were never close to going bankrupt.

I think it is not money that is killing Nintendo but irrelevancy right now.

 

[prwxv3]

How? Their portable segment of the business is profiteable while their console isn't. Focusing on the fraction that earns them money and avoiding losses is worsening the situation? How?

The handheld market is shrinking and the 3ds is not selling as well as the DS.

 

[Manmademan]

IMO thats a rather opaque analysis. Its oft-mentioned that Nintendos warchest could see them weather several storms, but that misses the point. People rarely say (in a serious tone) that Nintendo is facing a risk of bankruptcy (or "dooooooom"). It doesn't say too much about the overall market conditions they're facing.

Its more interesting to consider what a Wii U failure means for Nintendos ability to capture the console market going forward. Or more specifically, does it even impact it at all. Iwata is the one who said (of the Wii) "we shouldn't continue this business if our only target is to outsell GameCube". If the Wii U doesn't get back on track, and not only that but doesn't outsell the GC and (on its current course) doesn't really get close, where do you go? Try and capture lightning again?

Their portable line is a different matter. The 3DS is selling well as long as comparisons to its predecessors are avoided. Importantly their handheld software shipments are lower than anytime since just the original Game Boy was on the market. Should change with the fall lineup, but they still have to carefully navigate the current market trends. If portable sales decline again next-gen - which seems VERY likely with mobile continuing to grow in install base and developer attention to handhelds waning - then Nintendo will have to diversify in some way or do something crazy.


OTOH they could turn the Wii U around, and/or capture lightning again, and the handheld market might recover or at least stabilize. Like everything, wont know until it happens.

exactly.

 

[Snowden's Secret]

Haha, the platinum games are basically worthless by themselves. It's nice that they got them, but they do basically nothing when platinum games are not popular. W101 will be lucky to break 400k WW. And what exactly do you expect SMTx FE to do?

I think a lot of these are Nintendo saying, "We like these games and want them to exist; we gain some tangential value by having them exclusive to our system," more than, "We are doing this to make money." The same reason first party games like Sin & Punishment 2 were made.

Of course, Nintendo should be trying to make money, but there's no way that was the driving factor behind Bayonetta 2, a proven non-starter sales-wise.

 

[Guevara]

I beg to differ. Yes, this DOES matter. Nintendo is practically irrelevant in the home console space at the moment, and if things don't pick up, a successor to Wii U won't do so well.

Exactly. One way or another Nintendo will be forced to address the home console disaster.

 

[Paskil]

If I was Nintendo, I would build a huge silo and swim around in all that on-hand cash. Shit, that's probably already what Iwata does.

 

[7threst]

Haha, the platinum games are basically worthless by themselves. It's nice that they got them, but they do basically nothing when platinum games are not popular. W101 will be lucky to break 400k WW

Sure, but how is this different with any western studio? Do games developed in the west magically sell better? I think success of Wii U depends more on investments and deals Nintendo makes with certain studio's that are able, and willing, to take the uniqueness of the Wii U and it's controller and use that in order to create games with which Nintendo can say 'this is what Wii U is about, this is what is possible with our hardware.' And of course, that has nothing to do with developers coming out of Japan or the west. Great ideas can come from everywhere.

Edit: of course that doesn't mean the games will sell, but Nintendo might be able to create a situation where consumers think the unique offering of Wii U makes the investment in a Wii U is money well spent.

 

[mantidor]

If I was sitting on 5 billion dollars and wanted the wii u to succeed I'd start by moneyhatting a lot of publishers/devs.

I would think the reason they have so much money is precisely because they don't make such hasty decisions.

I bet 'doom / doomed' appear more in posts pre-emptively whining than they ever have in the posts of 'haters' or the 'delusional' or whatever the current buzzword is..

Of course, but just because a post doesn't have the literal word "doomed" doesn't mean it's message is anything but precisely that.

 

[Mileena]

I love how they have all that money yet are completely understaffed. Just hire a dedicated Wii U VC team is all I ask :/

 

[Manmademan]

Which ones? The only IP they had that I remember is Saint's Row.

saints row, metro: last light, darksiders, red faction, homefront, company of heroes, and thq was publishing the upcoming south park game.

Nintendo could have bought all of these for a fraction of the cash on hand they have that is currently doing nothing.

not all of these are blockbuster AAA games, but most outsell bayonetta. right now atlus is up for bid, and persona is probably the biggest third party rpg franchise not named dragon quest or ff.

 

[Tripon]

Warehouses full of cash? Check!
Third party exclusive games? Nope!
Timed exclusives? Nope!
...feature parity ports? Nope!

Sonic: Lost Worlds, and Monster Hunter 4 aren't third party exclusives? (To Nintendo's consoles at least).

 

[Raistlin]

Saying the Wii U is doomed is not the same as saying Nintendo is doomed. Nintendo will continue to do business. The Wii U has no chance of turning it around, though.

pretty much this

 

[schwabdizzle]

If Nintendo did not make the game pad necessary and sold a Wii U with the pro controller at $199 it would kill it in sales.

 

[prwxv3]

I don't think some of you understand how bad it is to become irrelevant in a market. It's going to take a shit ton of effort and resources to become relevant again.

 

[RustyNails]

I wonder how the picture looked if Nintendo called it Wii 2. Did they fire the marketing dept yet?

 

[Starfish Hero]

The price isn't an issue.

There's a few reasons why those didn't work. First, price means nothing without games. The 3DS price cut worked because it was followed by a solid holiday release schedule. The ASDA and Amazon price cuts were in the midst of the summer drought, with only Pikmin on the near horizon. Next, if I'm not mistaken, ASDA and Morrisons were clearance sales, so selling a couple hundred units each still probably means like 80-90% of their stock, considering they had already stopped ordering more Wii Us. Finally, price is relative: a price cut doesn't mean much now because the Wii U will still be among the most (if not the most) expensive consoles on the market. Once the PS4 and Xbox One drop, a price cut could strengthen one of the only advantages the Wii U has over the other two. $299 doesn't mean much now, but it could tilt a purchase in Wii U's favor when everything else is $399+.

 

[orioto]

The whole "but Nintendo is full of money and will be for centuries" is crap.
What's the point in having all that money if they're out of the industry. A company survive by existing on the market, not by having extra cash in hidden boxes. What they need is to stay relevant.

 

[N2NOther]

Nintendo was never going to go third party over one major flop, even if the WIi U ends up being this generation's Saturn or Dreamcast.

If it became this generations Dreamcast, that would mean they would go third party.

 

[Tripon]

I love how they have all that money yet are completely understaffed. Just hire a dedicated Wii U VC team is all I ask :/

They aren't the only successful company to do that, Valve's does this too. Not excusing under-staffing, just that for one reason or another, there are some companies with a history of success don't bother to scale up until it becomes an issue.

Its hard to find a middle ground between under-staffing and catching up, or over-staffing like EA and Activision does and then do a round of layoffs and studio closures when its time for profit taking.

 

[Heyt]

The handheld market is shrinking and the 3ds is not selling as well as the DS.

No console will sell like the original DS in a long time. And even with the handhled market situation 3DS has proven to be profiteable and viable even in those conditions. WiiU, meanhile does nothing for Nintendo except leecheing on to their wallet.

 

[Shiggy]

I would think the reason they have so much money is precisely because they don't make such hasty decisions.

If I were mean, I'd say it's that high because they avoided market research activity and thus saved money on those potential expenses.

But well, the cash amount has not changed a lot over the past 10 years. The amount of short term investments has increased from $400000 in 2001 to $5mio in 2012 though.

 

[Grayman]

I love how they have all that money yet are completely understaffed. Just hire a dedicated Wii U VC team is all I ask :/

It is amazing nintendo hasn't put together an account system to sell me on investing buckets of money on their VC system.

 

[Shiggy]

There's a few reasons why those didn't work. First, price means nothing without games. The 3DS price cut worked because it was followed by a solid holiday release schedule. The ASDA and Amazon price cuts were in the midst of the summer drought, with only Pikmin on the near horizon. Next, if I'm not mistaken, ASDA and Morrisons were clearance sales, so selling a couple hundred units each still probably means like 80-90% of their stock, considering they had already stopped ordering more Wii Us. Finally, price is relative: a price cut doesn't mean much now because the Wii U will still be among the most (if not the most) expensive consoles on the market. Once the PS4 and Xbox One drop, a price cut could strengthen one of the only advantages the Wii U has over the other two. $299 doesn't mean much now, but it could tilt a purchase in Wii U's favor when everything else is $399+.

Please read my post in context of the original post which I quoted. Those sales weren't clearance sales and it's apparent that the price isn't a real issue. You can get the Wii U for €200 at various retailers in Europe, that's not just a temporary thing.

The problem of the Wii U are its library. And I can't see much of a change there anytime soon. Will Mario 3D World help when NSMB U didn't?

 

[Zombie James]

Great article if you're a stock trader.

edit: Guess I should clarify. Saying stuff like Nintendo has $5B in a warehouse and they can tolerate multiple failures doesn't mean those failures don't matter. If each successive failure means Nintendo is less and less relevant, then the money they don't spend won't matter. I don't see how anything in this article is of comfort to someone who spent $350 on a Wii U. A comforting article if you own or trade stock, but nothing in there for owners of the system.

 

[megabytecr]

I would love to see Nintendo take some chances.

Now , onto the Platinum games talk, even if there games do not recoup the investment it is a good investment for the sake of the Wii U lineup and how the consumer views the console with all these types of games, just that for me make it worth it.

 

[Bill Rizer]

I don't know how long Ps4 and One will last, but I think next Nintendo home console will arrive just mid-gen in a few years (2016?).

This would bring a very interesting twist, if ever Nintendo will prove being still relevant in the home console market.

 

[Mileena]

They aren't the only successful company to do that, Valve's does this too. Not excusing under-staffing, just that for one reason or another, there are some companies with a history of success don't bother to scale up until it becomes an issue.

Its hard to find a middle ground between under-staffing and catching up, or over-staffing like EA and Activision does and then do a round of layoffs and studio closures when its time for profit taking.

Yea well Valve fucking sucks. If the game isn't called Dota or feature hats they can exploit, they don't care about it. Not exactly the company I'd aspire to be like if I were Nintendo. They might not be understaffed per say, but they're most definitely understaffed with people who know HD development. Throw the scrubs on the 3DS and get some guys who know HD development pls, maybe then we would have some games to play by now.

 

[SmokedMeat]

Sonic: Lost Worlds, and Monster Hunter 4 aren't third party exclusives? (To Nintendo's consoles at least).

I believe Sonic's being funded by Nintendo, which would make it a second party game, and MH4 isn't a Wii U game.

 

[Forsaken82]

Cars 2 was ridiculously successful.

Glad someone else called him out on this..

Now A Bugs Life is a different story.

 

[TunaLover]

Nintendo best bet is a handheld-home-console hybrid, they know how move in the handheld space, I don't think there's enough market out there for 2 Nintendo systems next time around, currently the development between 3DS and WiiU is hurting WiiU.

 

[Lumyst]

In the end the Wii U will make them money at the 200-250 price range and when they market the thing.

I don't see the gamepad as the problem like some think. The Wii U name is a mistake as well as the actual Wii U console looking like the Wii.

I think that with

- Wii HD as the name people would get the idea better even with the gamepad
- Differentiate a bit more the actual console and focus attention on both the console and the gamepad
- Split the marketing between the gamepad and the Wii motion controls but showing games in HD. Why not release at launch a Wii Sports 2 and Nintendo Land together, and see what works best. Even if the gamepad is not being understand they could start with a 50-50 split between gamepad and wii motion controls and during its lifecycle to start and give more importance to the gamepad.


edit: if they have trouble with 3rd parties I agree with some on Nintendo expanding their IPs and having 2-3 mature titles, one big FPS or TPS Multiplayer game and at least one big action/adv game. Even if it does not make them money it could begin to change mindsets about Nintendo and further diversify their lineups.

edit 2: right now they are betting heavily on indies and I think this will eventually pay off. I am sure they see more interesting ideas on the indie space than on the AAA games. The Wii U is a capable console and they were betting on more 3rd party support, they should learn the lesson and have a stronger launch next time.

I think N64 era Nintendo would make the typical games in the genres that are popular now, but this newer Nintendo has Platinum making Wonderful 101 and Bayonetta 2 as marquee titles. It's making a huge open world JRPG. It collaborates with western developers to make games such as Punch Out and Luigi's Mansion and Lego City. It's somewhat beautiful that they are choosing to make games that are not typical and as a first party present them as marquee titles. (Personally I want N64 era Nintendo to come back in a way.)

Also I think Art Academy would be the better game to bundle with the Wii U, along with Wii Sports U and a Wii Remote+ and Nunchuk. With Art Academy, it's obvious what the gamepad lets you do: You can draw. Sure the gamepad does more, but to make it simple and easy to market, just say "You can draw on it." Let that be a Trojan horse for getting the gamepad into people's hands. They can fall back on Wii Sports U as well.

Personally, I think the Wii U has the potential to bring back some of the DS's cool ideas and present them with the visibility of being on the TV in HD. Things like Style Savvy, Nintendogs, etc. I was going into the E3 Nintendo Direct thinking "Will I get to see X?" but it was after Iwata revealed Art Academy that it really hit me that the Wii U is an ultimate version of the DS and Wii. Nintendo has shown that it is willing to spend money on making high quality casual games, even postponing Wii Fit U and Wii Party U to polish them up (or was it to pad the release schedule?) These casual broader, "non core" games sell, as attested by Minecraft and Animal Crossing recently, and while the M-rated violent games are all the rage, there is a huge opening for companies to actually give a damn about that market and respect it instead of making quick cash grabs.