Nintendo‘s Wii U was released in Nov. 2012 with plenty of fanfare and optimism. With the huge success of the Wii, which was released six years ago, Nintendo decided to step up its game, so to speak, with an updated version. The Wii U was touted as being new, innovative and the first of the next generation of consoles, and there were high expectations as far as sales were concerned. But with the fourth quarter coming to a close, it looks like those expectations for the Wii U were a little too high.
So far sales have been dismal. According to recent NPD data, the Wii U sold just 57,000 units in January. That’s a 38 percent drop from sales of the release of the original Wii console in 2007. Analysis and industry insiders have called the Wii U sales everything from poor to disappointing to “historically bad” and “shockingly low” from the 100,000 that were initially expected.
The Wii U came out blazing with great buzz and great reviews. That resulted in sales of more than 400,000 in the first week in North America, but sales have cooled down dramatically since. What made the Wii U stand out was the GamePad which was the size of an iPad serving as a controller, software that includes an eShop to download classic games and other content, Wi-Fi capability, and support for HD content. These are just a few of the new attractive bells a whistles that one would think that gamers would flock to stores to purchase this latest offering from Nintendo. And with gamers still playing relics like the PlayStation 3, the Xbox 360 and the Wii, it should have been a given that the Wii U would be the console to have for Christmas and would dominate much of 2013.
Some believe that factors such national high unemployment rate, a bad economy and price are a problem. The basic Wii U costs $300 while the deluxe is $350 with a deluxe bundle going for as much as $550. That’s a lot for a console that doesn’t even have a Blu-ray player. But the price is still less than its competitors. Another reason for low sales could be news of the new PlayStation 4 and the proposed Xbox 720–both scheduled for release later this year. Instead of spending money on the Wii U, gamers may take their chances on these two offerings which look to be bigger and more powerful.
Nintendo might have seen this coming and doesn’t seem to be in panic mode just yet. In a Feb. 13 story on CNBC.com by Chris Morris, he stated that, “Nintendo had warned of a sales shortfall in its earnings announcement in January. The company downgraded revenue projections for the fiscal year from $8.883 billion to $7.35 billion and said that it would report a $219 million loss. The company attributed the change to ‘sales performance in the year-end sales season and afterward.'”
But it’s not just the Wii U that’s struggling, but consoles altogether. Those two relics mentioned earlier–the PS3 and Xbox 360–are seeing hard times too. Sales figures for February saw the PS3 and PSP drop by 15%, and a whopping 29% for the Xbox 360. Overall sales for consoles were down 21% in 2012 topping just $4 billion. Many console owners are also playing games on their cell and smart phones, so that’s cutting into sales, as well as a lack of good games.
This is making some wonder if this is the first sign of the beginning of the end of the gaming console, or is it too soon to start panicking? It seems like whenever there’s a sales slum or if certain sales goals aren’t met, people in the gaming industry thinks it’s the end of the world for consoles. If that were the case then Sony, Microsoft and Nintendo wouldn’t constantly try to one-up the other with a new console every ten years or so. If slow and underperforming sales continue to be a problem then maybe a good old fashioned price war for Christmas will do the trick and bring back customers during the extremely important holiday season.