Entries in Xbox 360 (1)

Monday
Feb252013

Next Step for Nintendo

You may be asking why so soon after Sony’s big PS4 announcement am I writing about Nintendo? The reason is as the shine fades away from the newness of the Wii U and we finally have concrete information about the Nintendo’s new competition, we can start to see the future of the console landscape take form.

 

While the Wii U was not able to match the same sales figures as the Wii launch, they did perform better compared to the PS3 and Xbox 360 launch. Nintendo also claims higher revenue over the launch period despite lower volume versus the Wii due to the higher price tag of the Wii U at $299.99 and $349.99 versus the original Wii’s $249.99. Recently, Nintendo has had to cut its forecast as sales plummeted after the holiday season. A Gamasutra source reported that the Wii U sold fewer than 100,000 units in January, and was outsold by both the PS3 and Xbox 360.

 

It is worrying just two months after launch, Nintendo’s new console is already losing against last gen opposition. This is even before we get to the potential problem of weak third party support and the perception of weak hardware that may reduce the number of console selling titles from making it to market in the future. At the end of the Wii’s cycle, more and more third party developers shied away from Nintendo’s console citing reasons of low sales, and difficulty porting games to the Wii from the PS3 or Xbox. Last week’s PS4 announcement showed off an 8 core x86 CPU and Radeon based GPU on the same die from AMD. Meanwhile the Wii U’s more unusual Power PC based three core setup has a lower clockspeed than either the PS3 and  Xbox 360 has led to some developers to say the Wii U is under powered. At the very least it highlights the difficulty third party devs will face when trying to port games to the Wii U. This problem will be exacerbated after the release of the new consoles from Sony and Microsoft. With the last generation of consoles having close to a 10 year life cycle, I believe Nintendo will be forced into a mid-generation hardware refresh in order to keep up.

 

Nintendo also has to contend with a branding problem where many consumers are still confused by the difference between the Wii and Wii U. Furthermore, there are frustrating inconsistencies that prevent some games from using old Wii controllers and peripherals for no apparent reason. This is also compounded by a platform strategy seemingly devised in an era before the internet in which every Nintendo system is treated as a different ecosystem, unlike Sony’s PlayStation Network that closely integrates account and purchases across the PS3 and Vita. There has also been news of a Sony App for Android and iOS that will allow purchases to be made from a smartphone, similar to Steam Mobile as well as the ability to play non-camera based PS4 games on the Vita remotely.

 

This isn’t to say it is all doom and gloom over at Nintendo. The 3DS continues to dominate the handheld market, with Sony admitting sales are well below expectations in addition to an announced price drop in Japan. Nintendo also has a war chest of around 13 billion in cash reserves, so they aren’t in immediate danger of being forced to go software only a la post Dreamcast Sega. Nintendo has also shown resiliency after initial 3DS sales did not perform up to expectation, and has since corrected those problems growing stronger and stronger since.

 

The next big date for all three companies will be E3 where Microsoft is predicted to unveil their next gen system code named Durango. It will be up to Nintendo to deliver something in order to counter these new consoles when these new consoles are relived during the next holiday season sales battle.