Tokyo - This holiday season Nintendo faces a critical test with its Wii U video game console that is pitted against Sony's PlayStation 4 and Microsoft's Xbox One as it seeks to revive flagging sales.
Analysts say there's a chance for the Kyoto-based company to stage a turnaround as new game releases such as Super Mario 3D World and Wii Fit U could lift Wii U sales.
Should lacklustre sales persist, the company which shot to prominence in the 1980s with Family Computer consoles and Game Boy portables might be forced to reconsider the core of its business strategy.
Nintendo's business, long associated with the hit Super Mario, Donkey Kongand Pokemon games, has been shaken in recent years as more people play games on their smartphone and tablets. So far Nintendo has been steadfast in its refusal to adapt games for those devices.
The company reported an ¥8bn ($81m) loss for the three months ended on 30 September. Quarterly Wii U sales nearly doubled to 300 000 units from 160 000 in the previous three months, but cumulative sales remained far short of the company's goal of nine million units for the financial year ending March 2014.
Mobile games
Eiji Sato, analyst at Toyo Securities, said Nintendo needs "killer content" for the Wii U to turn around its business after a weak line-up of game titles added to its woes. That has caught the company in a vicious cycle because developers are reluctant to create games for a poor-selling console.
Most game creators are also pouring resources into mobile games, which are easier and faster to develop compared with those for home game consoles that take more time, energy and expense due to the need for higher quality graphics, said Sato.
Nintendo's management principle has been to increase the population of gamers in the general public. When its strategy works, Nintendo wins big as it did with the motion-sensing Wii in 2007, Sato said.
The Wii U, the successor to the original Wii, reached cumulative global sales of 3.9 million units at the end of September since its launch over a year ago. In contrast, sales of Sony's PS4 reached more than 2.1 million after going on sale on 15 November. More than one million Xbox One machines were purchased on the first day of sales in 13 countries on 22 November.
The arrival of the PS4 and XBox One leaves Nintendo in a "bad place in the console world", said Steve Boxer, a game reviewer for The Guardian and an avid gamer.
"If I was Nintendo, I would be thinking very hard about some means of damage limitation."
On the latest Super Mario 3D World game, Boxer said it is a "very good game with classic Mario-type platform game action, but it doesn't feel like it's something new and fresh".
But Hirokazu Hamamura, president of gaming magazine publisher Enterbrain, said the PS4 and Xbox One consoles are flying off the shelves because their core fans waited up to eight years for these new consoles to come out. And he said their release was accompanied with strong game software.
Price cut
What has been happening to the Wii U is very similar to the Nintendo's experience with the 3DS, said Hamamura.
The popular Nintendo handheld device had a suggested retail price of $249.99 in the US when it first became available in March 2011. After weak sales, Nintendo slashed the price to $169.99 in August of that year.
Strong software titles such as Mario Kart and Monster Hunter ensued and "3DS sales exploded", said Hamamura, who points out that Nintendo now has a pipeline of unreleased games for the Wii U.
Since September, the Wii U's recommended retail price has been reduced to $299.99 for the 32GB model in the US. It was $349.99 when it debuted in November last year.
Another price cut is a strong possibility for the Wii U if sales stay sluggish, said Sato, the Toyo Securities analyst. Nintendo has ¥460bn in cash ($4.4bn) and is prepared to survive a bad sales year or two, he said.
Still, some say it's time for Nintendo to change rather than take comfort in its big cash pile.
"Nintendo should broaden its revenue stream in order to grow," said Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities.
Nintendo has strong software, with hit titles like Super Mario and Zelda, so it may be prudent to make that content mobile while preserving Nintendo's style, he said.
Analysts say there's a chance for the Kyoto-based company to stage a turnaround as new game releases such as Super Mario 3D World and Wii Fit U could lift Wii U sales.
Should lacklustre sales persist, the company which shot to prominence in the 1980s with Family Computer consoles and Game Boy portables might be forced to reconsider the core of its business strategy.
Nintendo's business, long associated with the hit Super Mario, Donkey Kongand Pokemon games, has been shaken in recent years as more people play games on their smartphone and tablets. So far Nintendo has been steadfast in its refusal to adapt games for those devices.
The company reported an ¥8bn ($81m) loss for the three months ended on 30 September. Quarterly Wii U sales nearly doubled to 300 000 units from 160 000 in the previous three months, but cumulative sales remained far short of the company's goal of nine million units for the financial year ending March 2014.
Mobile games
Eiji Sato, analyst at Toyo Securities, said Nintendo needs "killer content" for the Wii U to turn around its business after a weak line-up of game titles added to its woes. That has caught the company in a vicious cycle because developers are reluctant to create games for a poor-selling console.
Most game creators are also pouring resources into mobile games, which are easier and faster to develop compared with those for home game consoles that take more time, energy and expense due to the need for higher quality graphics, said Sato.
Nintendo's management principle has been to increase the population of gamers in the general public. When its strategy works, Nintendo wins big as it did with the motion-sensing Wii in 2007, Sato said.
The Wii U, the successor to the original Wii, reached cumulative global sales of 3.9 million units at the end of September since its launch over a year ago. In contrast, sales of Sony's PS4 reached more than 2.1 million after going on sale on 15 November. More than one million Xbox One machines were purchased on the first day of sales in 13 countries on 22 November.
The arrival of the PS4 and XBox One leaves Nintendo in a "bad place in the console world", said Steve Boxer, a game reviewer for The Guardian and an avid gamer.
"If I was Nintendo, I would be thinking very hard about some means of damage limitation."
On the latest Super Mario 3D World game, Boxer said it is a "very good game with classic Mario-type platform game action, but it doesn't feel like it's something new and fresh".
But Hirokazu Hamamura, president of gaming magazine publisher Enterbrain, said the PS4 and Xbox One consoles are flying off the shelves because their core fans waited up to eight years for these new consoles to come out. And he said their release was accompanied with strong game software.
Price cut
What has been happening to the Wii U is very similar to the Nintendo's experience with the 3DS, said Hamamura.
The popular Nintendo handheld device had a suggested retail price of $249.99 in the US when it first became available in March 2011. After weak sales, Nintendo slashed the price to $169.99 in August of that year.
Strong software titles such as Mario Kart and Monster Hunter ensued and "3DS sales exploded", said Hamamura, who points out that Nintendo now has a pipeline of unreleased games for the Wii U.
Since September, the Wii U's recommended retail price has been reduced to $299.99 for the 32GB model in the US. It was $349.99 when it debuted in November last year.
Another price cut is a strong possibility for the Wii U if sales stay sluggish, said Sato, the Toyo Securities analyst. Nintendo has ¥460bn in cash ($4.4bn) and is prepared to survive a bad sales year or two, he said.
Still, some say it's time for Nintendo to change rather than take comfort in its big cash pile.
"Nintendo should broaden its revenue stream in order to grow," said Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities.
Nintendo has strong software, with hit titles like Super Mario and Zelda, so it may be prudent to make that content mobile while preserving Nintendo's style, he said.
- AP
Nintendo Wii U Review:
It's almost unbelievable that Nintendo launched the original Wii eight years ago. A games console that changed the way people viewed gaming, one that meant anyone young or old could pick up a controller and play almost without instruction. Updated on 17/12/12.
So what has the Wii U got to offer? How do you follow such a popular console, keeping everyone still interested while fighting off the competition from Microsoft and Sony? Nintendo's Wii U hinges and revolves around the GamePad. See also: Nintendo Wii Mini announced
Nintendo Wii U: Design and build quality
The Wii U looks extremely similar to the original Wii, only more rounded and longer. It's designed to sit flat rather than upright, but you still have the option of which ever suits you. It looks better lying flat in our opinion.
On the front of the console is a slot loading disc drive, power, eject and sync buttons and a flap which hides two USB ports and an SD card slot. Round the back is the power connector and, for the first time on a Nintendo console, an HDMI port (cable included). There's two more USB ports, the same sensor bar connector and an AV port so Wii owners can use previous cables if they wish or don't have an HDMI port.
A nice design touch that we like is that the game discs have a rounded edge – a small but charming feature. However, the real unique design point is the GamePad which is unlike any other console controller in that it has its own screen. It looks something like a bigger version of Sony's PlayStation Vita. The closest anything has come to it bundled with a console was the Sega Dreamcast controller with a VMU (visual memory unit) plugged in.
There is a white and black model but it's more than just the colour scheme that's different this time around. The former is the 'basic' pack and comes with no games and 8GB of internal storage while the latter is the 'premium' pack and offers Nintendo Land plus 32GB of storage and some accessories like a GamePad charging cradle.
Priced at £249 and £299, it's worth the extra cash for the nicer looking black model, the extra storage, a game to play and extra kit.
Build quality of the main console unit is good; it feels much more solid than the original Wii. The GamePad has slightly cheap and plastic feel, but not overly so.
Nintendo Wii U: Hardware and performance
Under the shiny exterior of the Wii U are an IBM multicore processor and an AMD Radeon-based GPU. As we've mentioned already, the console is able to output up to full HD 1080p resolution. It would have been a shocker if it didn't. We mentioned the flash-based storage and there's also built-in 802.11 b/g/n Wi-Fi.
You would be forgiven for assuming the Wii U can play DVDs or even Blu-Ray discs via its slot-loading disc drive. Unfortunately this is not the case and a bit of a disappointment.
Over the course of a week we had a lot of fun playing with the Wii U and we found a lot to like about Nintendo's new offering. The interface looks almost identical to that of the Wii; it's easy to navigate but things are frustratingly slow to load, even opening the system settings.
This is where the Wii U is quite different the original Wii. Anyone could pick up a Wii Remote a throw a bowling ball but hand someone the GamePad and it's not immediately obvious which screen you're supposed to use when.
The Wii U is backwards compatible with original Wii Remotes, which you will need for some games. In Nintendo Land multiplayer and co-op games are played with a combination of the GamePad and Wii Remotes meaning you can have up to five players at the same time. The GamePad player gets their own experience on the small screen while the others play on the TV. It might be a little bit hard to get your head round but it works well and it's easy to switch which player uses the GamePad.
At launch there are plenty of titles to suit different types of gamers. Super Mario Bros U and Nintendo Land are fun easy going games while titles like Zombie U, Call of Duty Black Ops 2 and Batman: Arkham City will appeal to the more serious gamer. For those not wanting to play the more serious titles on the GamePad, there is a Pro Controller which isn't far removed from the Xbox 360 controller.
So far the games only support one GamePad but there is potential for developers to use more, but until then Nintendo won't be selling additional GamePads.
It's a bit difficult using the resistive touchscreen on the GamePad at times, especially if you're used to a responsive capacitive screen on tablets like the iPad and Nexus 7. Battery life lasted around 3-4 hours for us which isn't great if you want to play for a long session and we found the GamePad died during play a couple of times because we didn't notice the warning light. However, the charging cradle, which comes with the Premium pack, will keep the GamePad topped up when it's not in use or you can play with the power lead plugged in.
You can also play Wii games on the Wii U – Nintendo says nearly all of them - but for some reason you have to first launch into the old-style Wii menu which seems a bit long winded really. You can't use the GamePad with Wii games.
Aside from gaming you can also use the Wii U to access services such as YouTube, Netflix, Skype and Lovefilm in app form. There's also an internet browser and the GamePad can be used as a remote control for your TV – there's a dedicated button for it.
Netflix ran smoothly, but requires you to sign up for a free Nintendo ID. These services are a great way of getting access to content on your TV, you can watch on the TV or the GamePad. In addition there is the Miiverse which allows you to connect with other players and the Nintendo eShop where you can download demos and purchase games. Nintendo will also launch its own on-demand content service called Nintendo TVii next year.
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