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Nintendo's No-Show Clouds Company's Strategy

By - Source: Tom's Guide US | B 18 comments
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When it comes to the Eastern United States, the annual Penny Arcade Expo (PAX) East in Boston is the biggest gaming convention, bar none. Nintendo has elected to skip the conference this April, leaving many fans to ponder the company's current plans, and why it might be reluctant to share them.

It's no secret that the Wii U is a flagging console. Nintendo initially believed the system could sell 9 million units in 2013; that target number subsequently became 2.8 million. Even Nintendo's stalwart handheld, the 3DS, failed to meet the company's expectations. While the handheld was projected to sell 18.5 million units, it's now on track to move 15 million instead.

MORE: 12 Most Maddeningly Difficult Games of All Time

Nintendo's strategy, at this point, is anything but clear. The company wants to produce a new health-based console, presumably aimed at more-casual users, but has refused to lower the price on the Wii U below $300, insisting the platform might still have some life left. That said, if Nintendo has big news on the Wii U front, the console manufacturer certainly won't be sharing it at PAX East.

Fans have pointed out — correctly — that Sony will also have a very limited presence at the show (Microsoft will be out in full force). But even a token showing sends a different message than skipping the convention entirely.

Furthermore, although Nintendo did show up for last year's E3 convention in Los Angeles, the company declined to hold a press conference. At two of gaming's biggest conventions, nine months apart, one of the three biggest names in gaming will have had very little by way of new or unexpected announcements.

Even if Nintendo did announce a release date for a piece of must-have software, such as the new "Super Smash Bros.," some stalwarts are not convinced that it would help. Tom's Guide spoke to Bob "MovieBob" Chipman, a fan-favorite pop-culture critic with a well-documented affinity for all things Nintendo.

"The assumption that [the Wii U] is going to sell once 'Smash Bros.' comes out seems to be based on an idea that there are people who know what 'Smash Bros.' is, like it, would buy a system for it and are on the fence about a Wii U," Chipman said. "I don't know if enough of those people exist."

Nintendo is also caught in the same odd space as Microsoft and Sony right now, producing hardware for what very well might be the last generation of traditional consoles.

"Eventually, something has to give," Chipman said. "This model isn't sustainable. It's been sustained longer than it ever should have [by] gamers who were kids when the NES and the Sega Master System and the Genesis came out."

The old guard of console gamers, he argues, is used to buying a new console to get new games every five years or so, but modern teenagers have no such habits.

"[They] have no great affection for console generations and bit wars and substantial move-ups," Chipman said. "Technology is something that is liquid. You get multiple iPhones, multiple iPads … All your stuff carries over."

In other words, older console gamers can accept buying a whole bunch of downloadable games on a Wii and finding them unplayable on a Wii U, which is the way things currently work. But younger gamers reared on smartphone and tablet games may find that practice completely unpalatable.

Nintendo has expressed some interest in expanding into mobile platforms, but becoming a third-party developer would not necessarily be a panacea, Chipman explained.

"If the Wii U 'Zelda' comes out cross-platform, is 'Zelda' suddenly outselling the next 'Call of Duty' or 'God of War?'" he wondered. "I don't think that happens."

Nintendo, both as a console manufacturer and as a pop-culture tastemaker, may have already had its time in the sun.

None of this should suggest that Nintendo doesn't have a few great Wii U games left in its arsenal, or that the company will fade into nothingness if it cannot compete on equal footing with the Xbox One and PlayStation 4. But the House of Mario has seen better days, and cutting its presence at two major gaming conferences indicates that Nintendo faces more turbulence ahead.

Follow Marshall Honorof @marshallhonorof and on Google+. Follow us @tomsguide, on Facebook and on Google+.

Follow Marshall Honorof @marshallhonorofand on Google+. Follow us @tomsguide, on Facebook and on Google+.

Add your comment Display 18 Comments.
  • 0 Hide
    MANOFKRYPTONAK , March 27, 2014 2:37 PM
    Damn it nintendo quit screwing up! I love nintendo, but the wii sucked & the Wiiu sucks and they are killing themselves. Not that hardware is the only thing that matters, I just want solid games. NONE of my friends really played wii u , I did, but more for zelda and mario...
  • 2 Hide
    ddpruitt , March 27, 2014 3:13 PM
    Nintendo's been at the end of it's rope before, that's usually when they do they're best work
  • 0 Hide
    fulle , March 27, 2014 3:42 PM
    Everyone's saying that Nintendo is "doomed" right now, since they just made a small couple million dollar profit in 2013, as opposed to their regular year after year large profit. Oh NO! They didn't add much to their already 11 billion in the bank, the company's going under? For some reason.... Meanwhile the Xbox Division lost something like a billion dollars last year. No exaggeration. They lose huge amounts of cash, year after year, as if whoever's in charge doesn't seem to understand that businesses are supposed to make money, not lose it in the billions.But suuuuure. Nintendo's who's failing right now. It's totally Nintendo./sarcasm
  • -2 Hide
    Activ8Computers , March 27, 2014 5:15 PM
    Umm, I don't think Microsoft made a loss on the Xbox division last year, worldwide they actually turned a profit. Nintendo may not be in trouble now, but that 11 billion in the bank will soon dwindle if they make a few years of losses. They will have to spend huge amounts of money to get consumer confidence back ( hey Nintendo, ask Sega how much that cost them). And actually that 11 billion is nothing compared to what Microsoft can afford to spend or lose (they have something around the 350-400 billion mark sitting in the bank). I'll be more worried about Sony, shutting divisions down left, right and centre, making losses year after year and shedding staff at an alarming rate. They have no spare cash, are getting bailed out by Japanese banks and at the moment have a 70% chance of going under in the near term future if the stock market is to be believed.
  • 1 Hide
    fulle , March 27, 2014 5:42 PM
    Sony's cutting divisions that lose money, like their PC arm, so that they can focus on areas that do make money, like their TVs. While PS3 wasn't that profitable, PS2 was, and the PS4 is positioned to reach profitability much sooner than the PS3. Kaz Hirai's been quoted stating that Playstation is a core business for Sony.Stephen Elop, the MS exec currently in charge of the Xbox division, has been quoted saying that Xbox is not "critical to the company's strategy", and suggesting that they sell off the Xbox division. He pointed out the obvious that the Xbox brand isn't profitable. IHS forecasted that the Xbox division lost 1 billion in 2013, down from an earlier 2 billion dollar loss forecast. A lot of MS investors, agree with Elop and would prefer that Surface, Xbox, and Bing, were cut out of the business.Meanwhile, Nintendo has remained profitable, despite the Wii U struggling, due to strong 3DS sales. They're mixing it up with more 2nd party software development, since they know Xbox One and PS4 have an advantage with 3rd party developers, and they will likely turn a profit on the Wii U by the end of it's life-cycle. They're not dominant, but profitable in their niche of the market.
  • 1 Hide
    DRosencraft , March 27, 2014 6:24 PM
    As a fan of Nintendo (have owned every console since N64, except the Wii U), it is tough to see exactly what kind of strategy they're pursuing. They hugely downplayed their part in E3 last year, skipping PAX East this year... no pun intended, but it seems like they're retreating into their shell. That usually isn't a good sign for a business, but hopefully they'll turn things around. Their biggest issue has been the pace of release of great games. It's not just about Mario, Zelda, their big hitters. Xbox and PS have other series and titles that can be big draws and release often. These second tier games tied things over between the big hitters. Right now Nintendo doesn't have that.
  • -4 Hide
    doomtomb , March 27, 2014 9:09 PM
    Nintendo gonna go bankrupt in 10 years or less.
  • 4 Hide
    excella1221 , March 27, 2014 10:31 PM
    Quote:
    Nintendo is also caught in the same odd space as Microsoft and Sony right now, producing hardware for what very well might be the last generation of traditional consoles.
    Isn't this what people said last generation too? I'm pretty sure consoles will always have a place in the market. While PC gaming is undeniably better and more flexible, it's still a lot easier to design games for consoles, having a defined standard of hardware.
  • 0 Hide
    Doug Fletcher , March 28, 2014 4:24 AM
    In other words, older console gamers can accept buying a whole bunch of downloadable games on a Wii and finding them unplayable on a Wii U, which is the way things currently work.
  • 1 Hide
    Doug Fletcher , March 28, 2014 4:26 AM
    Ignore my last comment please. Here is what I have to say:"In other words, older console gamers can accept buying a whole bunch of downloadable games on a Wii and finding them unplayable on a Wii U, which is the way things currently work."THIS is a LIE! You CAN take your Wii games and saves and MOVE them to the Wii U AND PLAY THEM!
  • -2 Hide
    Dyseman , March 28, 2014 8:56 AM
    They should do as Sega did and just do software. Keep Zelda and Mario alive for those who like it and trash the system. 90% of the people that bought their Wii/WiiU is more novelty collecting dust than anything else. 5% probably are doing Wii Fit and 5% are toddler babysitter until they say just lemme use the iPad please... these games suck.
  • -2 Hide
    Dyseman , March 28, 2014 10:25 AM
    They should do as Sega did and just do software. Keep Zelda and Mario alive for those who like it and trash the system. 90% of the people that bought their Wii/WiiU is more novelty collecting dust than anything else. 5% probably are doing Wii Fit and 5% are toddler babysitter until they say just lemme use the iPad please... these games suck.
  • 0 Hide
    Mike Tuscano , March 28, 2014 10:28 AM
    As Doug Fletcher mentioned, this article is factually inaccurate saying you can't take your Wii games with you to your Wii U. Not only does the Wii U play Wii game discs with full backwards compatibility, you can also transfer your digitally downloaded Wii games and play them with full backwards compatibility on the Wii U as well.Why is this article stating an outright lie?
  • 0 Hide
    Johnny_Joestar , March 28, 2014 11:40 AM
    Quote:
    Umm, I don't think Microsoft made a loss on the Xbox division last year, worldwide they actually turned a profit. Nintendo may not be in trouble now, but that 11 billion in the bank will soon dwindle if they make a few years of losses. They will have to spend huge amounts of money to get consumer confidence back ( hey Nintendo, ask Sega how much that cost them). And actually that 11 billion is nothing compared to what Microsoft can afford to spend or lose (they have something around the 350-400 billion mark sitting in the bank). I'll be more worried about Sony, shutting divisions down left, right and centre, making losses year after year and shedding staff at an alarming rate. They have no spare cash, are getting bailed out by Japanese banks and at the moment have a 70% chance of going under in the near term future if the stock market is to be believed.
    While the xbox brand has made a profit every now and then, the brand as a lifetime whole is still in the negatives in terms of their actual profitability to MS, MS is just big enough to support those loses and keep pushing.Sort of like the opposite of Sony in which the Playstation brand is one of the few things that is still profitable while many of their other divisions are pulling their overall profitability down.
  • 0 Hide
    senshu , March 28, 2014 11:54 AM
    "At two of gaming's biggest conventions, nine months apart, one of the three biggest names in gaming will have had very little by way of new or unexpected announcements."At some point people start to realize these are just video games. That we expect new or unexpected announcements a few times a year is not only a bit sad, but wholly unsustainable.
  • 0 Hide
    belardo , March 28, 2014 4:00 PM
    @Activ8Computers : Xbox has never made a profit. (yes it makes money, but it loses more money than it makes - in Fact, other than Windows & Office, nothing else makes Microsoft money). With the Xbone doing poorly, that isn't going to change and WHO would be willing to BUY Xbox - which requires a LARGE company to support?@fulle: "Everyone's saying that Nintendo is "doomed" right now, since they just made a small couple million dollar profit in 2013, as opposed to their regular year after year large profit. Oh NO! They didn't add much to their already 11 billion in the bank," To you and me $11Billion is a lot of money. Hell, I would do great to have a million or even $100,000 in my bank.For a company like Nintendo... that's not great. Blackberry was showing it was on fire when it was going under $20b. The operational expenses of Nintendo is about $36b a YEAR. They operate on cash-flow like any other business. Nintendo could die in the next 12 months.Now, sure xBOX loses money every year, but Microsoft makes far more money (at this time) off of Windows & Office... and even MS see trouble in their future.
  • 0 Hide
    belardo , March 28, 2014 4:18 PM
    Nintendo has become a STUPID company, maybe even dumber than Microsoft. Pros from other sites are scratching their head about Nintendo's big PLANS to go into the casual/health gaming sector... which is COMPLETELY crazy and stupid. They are thinking of their glory Wii days. But that was 8 years ago... The Wii was cheap at $200 and you'll get a better workout at a GYM or going outside.The WiiU is last-gen tech at todays prices! $300~350 for a console that is on par with a new $200 PS3 - but less functional?! Mmmmm, maybe that is why they are failing? They lost 3rd party support... why make games for a console with 5m unit vs 150m+ for the PS3/360? (Wii & Wii-U will not play DVDs or Blu-Ray movie discs)The Wii-U needed to come out a year earlier (2 years ago) and sell for $200 when it was released. Nothing is going to PULL it out of its nose-dive. Just like how many of us warned about RIM/BB going down in flames. The expensive and yet confusing heavy tablet-controller added no value.So what would their Health-console be? A Wii-U without an Optical drive or the tablet controller? Just a proprietary Flash-card slot as Health-type games don't require lots of data storage... and sell that for $200? yeah, they'll sell billions of units! (not). Casual players did well with the Wii, its (or was) a $100 console.If Nintendo wants to LIVE, they need to pull their heads out of Mario's butt and "go Sega". They should be hiring PS3 and PS4 coders to make their high-profile games. They have dozens of IP games they can sell far more on the PS3 & PS4 in a matter of months (No, they wouldn't go Microsoft). Mario, Zelda, FireFox, Pokemon and many others. At best, they could sell about 3~4 mario games for the WiiU... or sell 20m of the same game for the PS3. A little math would show that there is MORE profit selling the games than developing, supporting and making hardware.Nintendo has changed before in their past. The used to sell cards and even have a chain of sex-hotels in Japan.Hopefully Nintendo takes the red pill and learn to fight another day. Right now, they are stupid and are holding the blue pill in their hand.
  • 0 Hide
    SamTheGreek , March 29, 2014 6:00 PM
    Why does this article say people who buy games on the Wii will find they can't play them on the Wii U cause that's the way things currently are?The Wii U is backwards compatible. Your Wii games will work on the Wii U, and downloaded games can be transferred over to your new console.
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