What the Hell Is Wrong With Nintendo?

Gamers try Wii U at the 2012 E3 Expo. Photo: Ariel Zambelich/WIRED

Earlier this week, amidst all the hype over the launches of PlayStation 4 and Xbox One, the Bloomberg news service took a step away from the wall-to-wall coverage of the new consoles to discuss Nintendo and the Wii U. They say no press is bad press, but…

“Sony Corp. and Microsoft Corp. each sold more game consoles in 24 hours than the Wii U maker did in nine months,” read the story. “[Nintendo] sold just 460,000 Wii U machines in the six months ended Sept. 30, about 5 percent of its target for the fiscal year.”

Christmas may represent a big part of Nintendo’s yearly business, but it sure as heck isn’t 95 percent. Hey, at least things couldn’t get any worse! Oh, wait: Apparently in Japan, Nintendo’s big holiday release Super Mario 3D World has stumbled out of the gate. In fact, it seems to have had the worst launch week of any game in the series ever. But why shouldn’t it, when it’s the fourth Mario in two years? We criticize publishers like Activision for annualizing their games, and meanwhile Nintendo is semi-annualizing them.

The single major advantage that Nintendo had over Sony and Microsoft this console cycle was a one-year lead, which it has squandered. And we’re going to see a lot more statements like the one from Jason Rubin, the former head of THQ, who said recently that Nintendo is “irrelevant as a hardware manufacturer in the console business” and that it should put its games on Xbox One and PS4 posthaste.

What the hell is happening? And is there any feasible way to stop it?

Price Is the Problem

Nintendo’s portable 3DS had a similar stumble when it launched in 2011. Nintendo’s plan to get it turned around was not especially complicated: It drastically lowered the price within a few months and released compelling software titles. Today, although it’s not nearly as much of a cash generator as the original Nintendo DS, 3DS is in a much better place for Nintendo and for some third parties — Capcom said this week that it has shipped 4 million copies of Monster Hunter 4 on 3DS.

Capcom might be happy with the 3DS, but ain’t nobody happy with Wii U. As Nintendo was gearing up to launch Wii in 2006, third parties were slowly backing away — ultimately, each committed a teensy bit of effort to making one or two cheapo games for Wii that tested the waters on this oddball piece of against-the-grain game hardware. They had already been cooling on Nintendo, since its GameCube console proved to be rather inhospitable to third party efforts. But after Wii hardware sales exploded, everyone (except Ubisoft, which had fully backed Wii from launch) was sent scrambling to gin up a slate of Wii products aimed at its new casual audience.

With Wii U, there’s no such pressure, because third parties aren’t exactly leaving dollars on the table by not releasing Wii U software. Additionally, back when Wii launched, there was still a middle ground in the videogame market. Publishers could produce triple-A games, but also single-A or B games too. These days, it’s almost a competition as to who can make their lineups smaller. The middle has fallen out of the market — the big publishers are either doing the biggest of big games, or 99 cent mobile apps.

Independent game makers using digital distribution are stepping up to fill in those gaps, producing the games that are somewhere between huge and tiny. You’d think they’d be a natural fit for the lower-powered Wii U, and yet despite Nintendo’s push for more indie content, there isn’t much of that happening either. While the fact that publishers are still making games for PS3 and Xbox 360 will benefit Wii U, which got ports of Batman: Arkham Origins and Call of Duty: Ghosts (but precious little else), a console needs exclusives.

“Lower the price and make games people want to buy” is of course much easier to say than it is to actually do. At this point, and with more big exclusives on the way, the quality of the first-party Wii U software that exists is pretty high even if nobody’s buying them yet. So in the absence of some big game-changer, a Brain Age or a Nintendogs equivalent, Nintendo might decide that the most direct way to jolt the Wii U business out of its slumber would be a big price cut like it did with 3DS.

This, too, is easier said than done. In August, Nintendo said that at $350 it was taking a loss on each Wii U it sold, and then it lowered the price to $300. So it may be taking an even bigger loss now. Could Nintendo stomach lowering the price to a point where it might have a huge effect — say, $199.99? One of the problems with that is the fact that each Wii U includes the GamePad controller, with its built-in touch screen. How expensive is it? In Japan, where Nintendo says it plans to sell extra GamePads at retail, it’s priced at $135.

This inspired an epic Twitter speech from The Gaming Intelligence Agency’s Andrew Vestal about GamePad-as-albatross: “I wonder if it’s technically possible for Nintendo to patch out GamePad support and relaunch Wii U at $200 w/ classic controller only,” he wrote. This is an interesting question, as maybe there’s some technological reason that Nintendo simply can’t do it; that the Wii U requires the GamePad to function now and forever. Well, let us assume arguendo that the two are severable. Is it a good idea?

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