Thoughts on the recent Nintendo Financial Results

It’s no surprise that Nintendo isn’t doing so hot when it comes to their present-day financials. Obviously, this is a complex issue, with many layers… but I think one of the major factors is the back-swing of the runaway success the Wii enjoyed. I wrote about this a few years ago, but basically everyone—gamer and non gamer alike—was buying the Wii, because it was incredibly new and unique.

The Wii was the coveted “Furby” leading up to Christmas for the gaming (and non-gaming) world… and it’s the non-gamers that were the problem. During the height of the Wii’s popularity, I knew at least 20 people who weren’t what you’d call a “gamer,” who had purchased a Wii… but after a few months of use, it ended up just sitting around, collecting dust at their place.

The Wii saw insanely high sales, combined with a large number of buyers who didn’t use the system all that often, and who for the most part never bought a game outside of the Wii Sports title that came with the system. This set up Nintendo for a fantastic failure with their follow up, Wii U.

Not only was it impossible for Nintendo to meet, let alone surpass, the sales they achieved with the Wii’s innovative debut, but even a strong sales turnout would have resulted in disappointment. Considering all the non-gamers were likely looking at their Wiis collecting dust, and not really feeling keen on buying another system that wouldn’t be used, it would have been a logistical impossibility for the Wii U to achieve the same level of success.

And let’s be honest, in many cases, consumers didn’t even recognize the Wii U as a new system. How many times have you heard, “Wii U? What’s that, does it come with some sort of attachment?”

So, considering that even good as could be expected sales of the Wii U would have been met with disappointment from investors, when the actual sales of the Wii U turned out to be quite low, this put Nintendo into a pretty bad financial situation.

So what’s Nintendo to do?

For starters, they need to get their act together when it comes to online and digital software. Every other player in the industry has them SO outclassed, it’s almost a joke.

For example, my 3DS was stolen last week, and I lost ALL my games I purchased digitally, with no way to get them back.  If it had been a Sony or Microsoft gaming system, I guarantee I wouldn’t have needed to repurchase those games like I will for the 3DS if I want to play them again.

It’s 2014! There should be a unified Nintendo account that links all your purchases and data across systems, so that, oh I don’t know, losing a 3DS isn’t a heart-wrenching loss of 2000 street passes.

That being said, catching up in the areas they have fallen way behind on isn’t going to be enough. When you’re coming from behind in a technical sense, bringing it up to par with the competition isn’t enough to save you.

You need something truly innovative and unique—like the Wii’s motion controls were when they first came out!  Along those lines, and I’ve talked about this before, why not release a Netflix-for-games type service on the Wii U?

We know that the Netflix model is successful, and Nintendo is uniquely situated to offer this service.  One of the strongest draws for Nintendo platforms has always been the first-party titles.

Sure, you can release these in the eShop, and people will buy some of their favourites, but probably not all of them. On a subscription model, you can get hundreds of thousands, if not millions of people paying every single month for access to the back-catalog.

I’d shell out for that value proposition in a second!

Ultimately, Nintendo is once again on the road to irrelevancy. They’ve been close before, but each time they were able to recover. I’m sure they’ll find a way to do so again, but they need to go back to the innovative thinking that brought the Wii so much success. Nintendo is going to have to catch up on the many areas they are lagging behind in, if they want to reclaim their former glory.


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Author: Dave View all posts by
Dave will tell you that he likes to play video games, this is in fact a lie. What he really likes to do is buy games, and leaving them sitting unopened on his shelf. He is a monster.

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