It Prints Money: Why the WiiU is Here to Stay

I’m getting pretty fed up with this endless parade of articles stating that Nintendo should stop making home consoles and makes games for other devices.

You know the type, they always start with “I don’t want to rock the boat but..”, or “I’m a Nintendo fan but,..”

Surely if these numbskulls were actually Nintendo fans they wouldn’t begrudge having to buy a Nintendo console to play Nintendo’s games.

U3oF2

You tell em’ Reggie.

Well, I don’t want to rock the boat but I think Nintendo should stay in the console business, what’s more I don’t think they should abandon the WiiU either, and unlike most of the dross floating around the net these days I’m going to back up my claims with actual facts and figures.

The most common argument used to imply that Nintendo should quit making hardware are the poor sales of the WiiU, Now although it is true that the WiiU has underperformed selling only 4.3million units worldwide after its first year on the market, which is about half of what either the PS3 or Xbox 360 sold over the same period. That is a valid criticism. However most articles seem to ignore this fact and prefer to directly compare it to the Wii,

Now let’s think about this for a second here, It underperformed compared to the Wii, it didn’t do as well as one of the most successful consoles of all time. A machine that’s sold over 100 million units worldwide, the most successful console of its generation, a machine that despite being technically inferior to both the Xbox 360 and the PS3 has still sold 20 million more units than its closest 7th generation competitor despite having only a handful of games released for the system in the last two years.

The Wii is what marketing execs would call a perfect storm: the right product, at the right time at the right price and with the right line up. The stars literally aligned for Nintendo’s great white hope.

global-hardware-year-over-year-comparison---wii

Graph courtesy of VGchartz.com

Even the PS4 or Xbox One, despite getting off to a cracking start with 2.1million and 1.5 million units sold respectively, will probably not outpace the Wii any time soon.

PS3-FatThe only home consoles to ever sell more units were the Original PlayStation and the PlayStation 2, then again, I remember reading articles that proposed that Sony exit the console biz or abandon the PS3 when it failed to capture the public imagination in the same way its predecessors did.

In fact, the first couple of years of the PS3s life in many ways mirror that of the WiiU, it was a capable machine with a serious PR problem, seen by many as poorly marketed, overpriced and with a serious deficit of quality exclusives. How did Sony solve these problems? They reduced the price and released a steady stream of high quality exclusive titles.

This combined effort helped to turn the PS3’s fortunes around, to the extent that it has finally over taken the lifetime sales of the Xbox 360 this year. Sitting on lifetime sales of 80.9 million compared to the 360’s 79.8 million.

This is a strategy that Nintendo themselves have replicated with the 3DS, which at the begging of 2012 had a bad case of PS3 syndrome itself.

However, despite Nintendo successfully reversing public opinion over the course of 2012 sales figures show that Nintendo actually sold more units during the holiday period of 2011 than 2012. Shifting 7.8 million 3DSs in the 4th quarter of 2011 compared to 6.8 million units during the same period in 2012. To put this into perspective the PS Vita only managed to sell 1.7 million units during the holiday period of 2012. And in 2011 many outlets were claiming that the 3DS was DOA and Nintendo should quit.

global-hardware-year-over-year-comparison---3ds(2)

Graph courtesy of VGchartz.com

This leads me to conclude that Nintendo’s problems actually have very little to do with the sales performance of their machines.

3DS-It-Prints-MoneyThey certainly have no financial problems either as Nintendo reportedly have $10.5 billion in the bank and zero debt. Should the WiiU end its life as a financial failure Nintendo have more than enough cash to just try again,

So if Nintendo can afford to make hardware and that hardware is commercially successful and profitable.  Then why should Nintendo stop and become a third party developer/publisher like SEGA?

The usual response is that they would make more money if they sold their software on other devices since Nintendo would no longer be limited to the install base of their own hardware, they would obviously sell more copies of their critically acclaimed franchises. This makes perfect sense if, you know absolutely nothing about how games are published or developed,

However there are several problems with this argument, especially when specifically talking about Nintendo.

The first is that surely this applies to all three console manufacturers. I’m sure there are just as many people who only own an Xbox that would love to play the Last of US as there are PlayStation owners who’d love to play the latest Zelda.

The second is that Nintendo’s exclusives titles are some of the best selling console games ever made.  In fact, the 15 best selling games on a single platform of all time are all Nintendo exclusives.

The Top 20 best selling games of all time broken down by platform courtesy of VGchartz.com

The Top 20 best selling games of all time broken down by platform courtesy of VGchartz.com

But for the sake of argument let’s say Nintendo ceased making hardware tomorrow. They would be ill equipped to work on either PS4 or Xbox One and it would also cost them a hell of a lot of cash to do so.  For the last decade all of Nintendo’s development teams have worked exclusively with getting the best out of Nintendo’s own hardware, which is based on very different architecture that both Sony or Microsoft employ. So in order to develop for either console Nintendo would have to completely change the way they make games as well as somehow leap a generation in terms of their understanding of working in HD, something which they’ve admitted to having some problems with, although looking at SM3DW and Pikmin 3 you’d be hard pressed to know what they were.

Dev kits aren't cheap

Dev kits aren’t cheap

Also, in order to create software on other consoles Nintendo would have to pay Microsoft and Sony the necessary licensing fees to do so, as well as fees associated with QA and all the rest. They would also have to purchase all the necessary hardware and software specific to developing games for each console. They would also be subject to whatever rules and regulations Microsoft and Sony place upon for third parties that develop software for their platforms. Currently Nintendo run the show entirely and don’t have to pay any fees, or worry about the whims of platform holders because they are the platform holder.

The most important fact that a lot of people fail to grasp is that Nintendo are a software company that make hardware, Not a hardware company that makes Software.

What this means is that unlike Sony, and to a lesser extent Microsoft, who make a platform and then think about what games they could make for it. Nintendo thinks about what experiences and games they would like to make and then creates hardware that supports that concept to the extent that the two are almost inseparable. Wii sports on any other console at the time of its release just would not have worked; the Wiimote is integral to its entire design, likewise think about trying to play Mario 64 on an original PlayStation or Saturn pad.

The offshoot of this way of making machines means that Nintendo are more like a toy maker than a traditional software company. This is a good thing, as Nintendo’s experiments help to drive the industry forward because the competition inevitably will adopt what works and drop what doesn’t.

Nintendo innovate, Sony and MS iterate.

The most innovative thing that either console does is enable second screen play via Smart Glass on the Xbox and streaming to the PS Vita on the PS4. These features are a direct response to the WiiU gamepad. like Kinect and Move were to the Wiimote.

That’s not to say that neither company brings anything interesting or worthwhile to the table, quite the opposite, Nintendo could learn a thing or two from what Microsoft have done for online gaming and Sony’s work in helping game’s to grow up in many ways has helped to make the industry what it is today.

In short, all of the companies make great products, and we need all three of them to spur each other on and keep each other in check.

So no, Nintendo shouldn’t stop making hardware, and neither should Microsoft or Sony It’s not in their best interests, it’s not in the industries best interest and most importantly it’s not in gamers best interests.

 

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1 comments
smashbrolink
smashbrolink

Well said on all counts.

More people out there should stop trying to get exclusives to jump ship onto their system-of-choice, and instead save up for more than one.

If anyone out there can save up for a few months for a PS4, they can spend even less time saving up for a Wii U, and at that point they'd have no more reason to complain, because they'd get all of those third party exclusives they want on top of anything that Nintendo gets that the others don't have.

Perfect solution, no muss or fuss.

Unless, of course, their "pride" gets in the way.

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  1. […] For the last few months, it feels like we as gamers have been hit with a tidal wave of bullshit. Day in day out we’re being bombarded with spurious claims and odious opinion pieces claiming that Nintendo are on the verge of bankruptcy and telling us what a disastrous failure the WiiU is, despite evidence to the contrary. […]