Uncategorized ·Video Games
3 things Nintendo must do to survive
BYJP Mangalindan
February 1, 2013, 7:58 PM UTC
FORTUNE — Nintendo is in trouble.
The long-respected video game company announced earlier this week that sales of its newest home console, the Wii U, were lower than anticipated, with just 3.06 million units sold. Last October, the company had said it expected to sell nearly 5.5 million machines through the end of March, but now that number has been downgraded to 4 million. Software sales fared better: 11 million games sold through the end of last year, though Nintendo also scaled back its expectations there, from 24 million to 16 million sold through March.
When I reviewed the Wii U last November, I genuinely found a lot to like: a fun dual-screen experience and several interesting launch titles, to name a few. But the console had — and still has — rough edges. Here's what Nintendo (NTDOY) must do to potentially goose those sagging sales:
Lower the price. (Obviously.) The Wii U starts at $300 for the standard model and climbs from there. If this were 2001, that's a price gamers wouldn't think about twice. But times have changed, and whether or not many traditional gamers and publishers want to admit it, casual gaming on the Apple (AAPL) iPhone, iPad, and Google (GOOG) Android devices is siphoning away younger users. Look no further than Nintendo's declining bottom line for proof of that. Nintendo President Satoru Iwata recently said the company was not planning a price cut any time soon, in part due to the fact that the company is already selling the console below cost. But to make it a more compelling sell, particularly when faced with the iPad Mini's attractive $329 price, a more drastic measure like a price cut is probably needed.
MORE: The problem with celebrity creative directors
Upgrade the firmware. There were many things to like about the Wii U when I reviewed one last October. Atrociously long loading times were not one of them. And they're still a nuisance. Loading up the Wii U's main menu, say, when exiting out of a game or an app, still takes 16 seconds at best, and 28 at worst. (The average time is 20.) In the big scheme, that doesn't sound like a lot of time, but add up all those seconds, and the loading time becomes interminable — something other users, like this angsty Japanese woman would agree with. It's also pretty inexcusable given that the Sony (SNE) PlayStation 3 and Microsoft (MSFT) Xbox 360 — consoles that have been on the market for years — don't suffer from this. Nintendo has acknowledged it's a problem and says it's working on a fix. It can't come soon enough.
Accelerate game development. When a new console launches, the first slew of games is usually followed by somewhat of a lull in releases. The Wii U is no different. But even worse, several key games like Pikmin 3, the promising action game Wonderful 101, and Game & Wario were pushed back to "the first half of the year." If the Wii U was a tough sell for some before, it's even more so now when the best they have to look forward to is Lego City Undercover or games ported over from other consoles like Need for Speed: Most Wanted. Where is Zelda, Star Fox or Metroid? Classic franchises unique to the Nintendo brand are a must-have to pique buyers' interest.