It's official: Sales of the Nintendo Wii U have hit such a low level that the system's performance is starting to line up with the public's increasingly negative perception of Nintendo.
Although no hard numbers were released by Nintendo, research groups and media outlets are pinning the Wii U's sales numbers within a paltry range of 50,000 - 60,000 units during January 2013. That is a dangerously low number for a system only three months old.
For some context, those monthly numbers are worse than anything the Xbox 360 and PlayStation 3 pulled in at any point during their lifecycles. Even the GameCube, widely considered a less-than-successful effort by Nintendo, didn't drop to levels that low until 60 months after its launch, when the original Wii was released.
In short, Nintendo has failed to both differentiate the Wii U from its competitors and offer an interesting line-up of games. Consumers aren't excited about the system, and many have a hard time telling it apart from the original Wii.
This has sparked a very pessimistic outlook from analysts across the game industry.
"I think they misfired on the Wii U," said Wedbush Securities Managing Director Michael Pachter to GamesBeat. "It's just not that different from the other two [existing] consoles, and the gameplay isn't as unique as the Wii. They made a mistake, it's something they probably can't recover from."
"I think they have made a costly mistake [with the Wii U]," he added. "And their handheld business can't save them in the face of cannibalization from smartphones and tablets."
Despite all the doom and gloom, it's still possible for Nintendo to turn its current predicament into a profitable enterprise. As I mentioned before, the company faced similar situations in the past with both its DS and 3DS systems before sparking their success with a line-up of great games; even the Nintendo 64 and GameCube, though never market leaders, managed to pull in profits for the company. The major obstacle standing in the way of that future, however, is the same one that plagues all new consoles when they first arrive: a lack of games.
"Games, games and more games," said IDC research manager Lewis Ward to GamesBeat. "The relationship between key releases — primarily first-party titles — and hardware sales is especially clear in Nintendo's case. The sooner they get titles like Pikmin 3 and Wii Fit U on the console side and Pokémon games and titles like Animal Crossing: New Leaf on the 3DS side on store shelves, the better."
If Nintendo can start releasing a steady stream of quality titles on a monthly basis, the system's prognosis will brighten considerably. Complicating that analysis for the Wii U, however, is the fact that it's not guaranteed Nintendo will be able to meet the challenge this time around.
The company hasn't released a first-party game since the system launched; at the same time, it has delayed games like Pikmin 3 into March, leaving early adopters to choose between less-than-stellar third-party games and simple ports of titles already on the 360 and PS3. The one bright spot for the system in terms of exclusives, Ubi Soft's Rayman Legends, was not only stripped of its exclusivity, but also delayed from February to September. That's not exactly a sign of confidence from the important publisher.
Nintendo tried to excite its user base recently by announcing a slew of games, including a new 3D Mario, a new Zelda and a Yoshi-centric platformer. The company also promised to reveal new information about the newest Super Smash Bros. in the coming months, but there's no way to know when any of these games will be ready. The new Zelda and Super Smash Bros. are likely more than a year away, and Nintendo's penchant for delays means that it's no guarantee that a new Mario game will be out by the time the PlayStation 4 and Xbox 720 launch.
Discounting Nintendo has typically been a fool's errand. The company routinely manages to come back from the brink to not only become profitable again, but also to invent products that capture the world's imagination.
This time, though, with new products from Sony and Microsoft threatening to overshadow it, as well as a landscape that's changing at an increasingly rapid pace due to non-traditional competition from smartphones, Nintendo has a tough road ahead.
