Even a price drop may not be enough to save the Wii U

wii-u-eshop — Image used with permission by copyright holder

The Nintendo Wii U is arguably the most troubled Nintendo console to hit the market since 1995’s Virtual Boy, a machine that failed to connect with consumers so spectacularly that production was halted within a year of release. After a promising first month on sale, Nintendo Wii U sales plummeted in 2013, totaling just 57,000 consoles in January and 66,000 in February. As a result, retailers and game publishers alike have called on Nintendo to lower the price of the console.

“[Nintendo’s] silence on strategy is deafening at the moment.”

Wedbush Morgan analyst Michael Pachter believes that a Wii U price drop won’t save Nintendo’s struggling machine, though. “The only key hardware device to underperform our expectations was the Wii U,” said Pachter, referring to the console’s estimated March sales. Pachter is forecasting 55,000 consoles sold despite new releases like Lego City Undercover and Monster Hunter 3 Ultimate. “[Wii U’s] fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console.”

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“We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveilved before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality.”

With rumors suggesting that the PlayStation 4 and the Next Xbox will sell for $400, just $50 more than the Wii U Deluxe Model that accounts for 70-percent of all Wii U sales, it’s clear that price is a major hurdle standing in Nintendo’s way, perhaps even as much as the lack of games. The company has sworn to its retail partners that it has a plan to change the console’s fortunes in the year ahead, but as one retailer said in March, “[Nintendo’s] silence on strategy is deafening at the moment.” As that retailer and others have pointed out, though, even unofficial price cuts don’t sell Wii Us.

Even with a significant price cut and a selection of promising retail games, Nintendo still faces a third and final hurdle to future success: its poor online infrastructure. New releases can’t be downloaded directly to the console because of its miniscule internal memory, and while Nintendo has promised a system update to improve basic console functionality for April, with more than half the month past the company has made no new announcements. Nintendo still, contrary to every successful digital distribution model from iTunes to Steam to Amazon.com, doesn’t offer a centralized account, making it easy for customers to access its purchases on more than one device.

In order for the Wii U to be successful, Nintendo needs to rethink its entire console business model even before it drops the price.

Source: GamesIndustry International