It’s pretty obvious that Nintendo is having quite a bit of trouble selling the Wii U. In fact, to compare Nintendo to themselves, they sold as many Wii Us to date since its November-December 2012 launch as the 3DS sold in it’s first month. (Wikipedia says 3.61 million to date for the Wii U and 3.61 million from Feb. 26 to May 31 for the 3DS). Considering that selling a home console and games for it can provide a huge amount of revenue for a company, is it safe to assume that this could be the beginning of the end for Nintendo because they’re missing out on a large chunk of revenue?
Long story short: No. I don’t think Nintendo is going anywhere. I think that Nintendo will stick around for quite a few more years, if not longer. Here’s what I think will happen to Nintendo in the coming years. I’m going to assume that the Wii U flops this holiday (although I don’t think it will, as I stated in one of my earlier posts) in order to make this article progress. If the Wii U is a success this year, then Nintendo has smooth sailing ahead, and there would be nothing to talk about. The flipside, however, provides an interesting backdrop. So, with that being said, let’s assume that the Wii U still continues to see lackluster sales this holiday season.
The good news is, this would give Nintendo a lot of time to perfect the next generation console (when the PS5 and Xbox 3 come out). I would hope that they learned their lesson: don’t jump the gun and try to launch a new system too early. I would hope they would attempt a more traditional launch near the same time as the new Sony and Microsoft products. This would give them time to ensure that they can accomplish everything they need to with the Wii3 (that’s what I’m going to call it). Let’s face it, the Wii U is a children’s system; it doesn’t appeal to a broad audience. If they take these next 5 years or more to learn how to effectively bridge the gap between their innovative products and the mainstream gamer, they’ll be back in the race for the next lineup of consoles.
Again, this would signal an end to the article; the Wii3 is a success, and Nintendo sees smooth sailing during that console generation. So, what would happen if they make another home console misstep? That wouldn’t spell out the end of Nintendo either. The reason: their handhelds. The 3DS is seeing solid sales, and its games are moving millions of copies. In fact, the top two selling 3DS games (Super Mario 3D Land and Mario Kart 7) have sold more copies than all the Wii U games combined (16.37 million to 14.44 million). Whether the 3DS is meeting Nintendo’s expectations or not, it’s tough to deny that it’s doing pretty well in the mobile sphere.
Their handheld success can be attributed to the fact that their hardware is always innovative enough to stand out in a market where the only other competitors are Sony and smartphones. People say that smartphone gaming will take over the handheld market within a few years, but I strongly disagree, and I’ll talk about that in a future post. The main reasons are that as of now, phones can’t offer an experience like a dedicated console can, and no matter the amount of innovation, you probably won’t be able to fit a battery big enough to play power-demanding games, make calls, keep screen brightness up, and surf the web all at once without your phone being the size of a handheld system. Seeing that phones are getting slimmer and slimmer, this goes against everything they’re trying to do, so I think handhelds will stay separated from phones for quite a while (unless Sony decides to squash together a Vita and their Xperia phones; the Vita already has 3G. It just needs cell signal, and voila!).
So, if Nintendo’s home systems fail, their handhelds will continue to come through for them for years. With more focus going toward their handheld line, they would be able to perfect their systems even more, and make even better games. I believe that Nintendo’s home systems have a 50/50 chance of succeeding in this console generation and the next, but I think their handheld systems will endure far into the future with a much greater success rate.
Finally, let’s assume that the worst case scenario occurs: let’s assume that phones can somehow manage to corner the handheld gaming market, and dedicated handheld systems become irrelevant and obsolete. At that point, Nintendo would have no home console and no handheld to keep them afloat, right? They’d go bankrupt!
Wrong. At that point, I think Nintendo could make serious money working as strictly a developer for other systems. Mario, DK, Kirby, and everyone else could live on as Nintendo-developed titles for Sony and Microsoft systems. This is similar to what Sega has done since they no longer produce systems. They create Sonic games for other platforms and re-release classics onto Androids and iPhones. They don’t make gobs of money, but they’re still around, aren’t they? Imagine if Smash Bros came to your Xbox, or if a legitimate Pokemon game (not one of those spinoffs titles) was available on your Playstation. Would you buy a Nintendo game, especially if you didn’t have to buy another system to do so? I know I would. Nintendo would make a killing by expanding their consumer base, and that’s exactly what working as a third-party developer for other systems would allow them to do.
This would bypass the problem they’re experiencing right now: people want to play their games, but they don’t want to drop over $200 on a system without third-party support that plays almost strictly Nintendo titles. I want the new Smash Bros. next year, but I don’t want it enough to buy a system that would only play it and a handful of other games when I can opt for a PS4 with plenty of games and third-party support. With that being said, I still think the Wii U stands a chance this winter, even if I’m not buying one (I have to choose wisely; I’m a teen with a minimum wage, part-time job, whereas many console purchasers this winter will be parents and grandparents with a tad bit more money in the bank).
So, to recap, I think Nintendo has a 50/50 shot of staying in the home console business over the next 10 years, but I think that their handheld line will stick around for much longer. If a revolutionary smartphone comes along that can magically change everything, Nintendo might have to resort to simply working as a third-party publisher, which could actually work out in their favor. Nintendo isn’t going to crumble and disappear for a long, long time, and that’s great for people like me that want to continue to see their great games in the future.
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Until Next Time