I am going to just cut to the chase and not waist any time on a big build up, Nintendo is in serious trouble. As a long time fan of theirs it really worries me the state they are in. Die-hard loyalists continue to talk about all that cash they have saved up like it some how means they will just be able to exist forever, the problem is their stocks took a nose dive and they lose nearly $2 billion dollars in value over night. Now it didn’t hurt their cash reserves at first but their bonds became worthless and with the company expecting to post a $250+ million dollar loss for the third year in a row, that tells me they will start burning through that cash stock pile faster than they would like, and Nintendo loyalists (I hate the term fanboy), well they continue to bring up Nintendo’s past successes as proof of future successes, without ever getting into how bad it is when you consider the brand new PS4 sold more units in a single day than the Wii U did in an entire year, and sales keep going up for Sony and down for Nintendo, that says it all, their machine is doomed. But worse yet the truth is there is not a single plan out there that can save Nintendo, at least not in the way gamers are expecting.
Plan A, stay the course and release another console in 2-3 years time.
Why this will NOT work. First, Nintendo can not suffer three more years of losses and with Wii U sales flogging and 3DS sales on the decline, they could start running out of cash long before they have a chance to launch a dead on arrive console. Look at Atari and Sega, both dominated their markets at one time and then failed to move forward. Atari lost all confidence with the failure of the 7800 which followed the failure of their 5200, then they released a third failure, the Lynx, by the time they got around to scraping together enough chips and bolts to get the Jaguar on the market, they were so far in debt it was doomed from the start. Sega went through the same thing, they did great with Genesis and Game Gear but they lost face with Sega CD, 32X, Pico, Ex-Eye, CDX, Saturn, and Nomad, all those consoles released in the span of three years! Sega was so deep in debt when they launched the game machine the entire world had been waiting for, the Dreamcast, they could barely keep it afloat for one year before throwing in the towel and selling off their studios piece by piece just to stay alive as a (struggling) third party publisher.
Now lets look at Nintendo, they actually lost money big on the Gamecube, what saved them then was the GBA was a runaway success and they used the Game Boy Player to try to boost sales of the dying Game Cube. Want to know how bad Game Cube was, after only two years on the market they ceased production, slashed the price from $199 to $99 over night and bundled it with a Legend of Zelda collection that compiled all the best Zelda games to that point on one disk and gave it away for free. Sales picked up and they managed to stick it out for another two and a half years, during which time they released the GBA-SP a power house that could easily eat any losses Game Cube caused. Problem is, Wii U is selling WORSE than the Game Cube was at the same point in time, and it costs twice as much too. Retailers are already discounting the machine and several are shipping them back to Nintendo. Nintendo will soon be in worse shape than they were in 2003 when the Game Cube nearly destroyed their empire. Why bring that up? Because as low as sales were Game Cube was still a beloved system, sure it got a lot of jokes about being a purple lunch box but it still had a great array of games, first and third party all across the spectrum. The Wii U is not going so hot on that front, it has less than half of the games that Game Cube had in the same time and worse yet, the best selling game on the console, Super Mario 3D World, is the worst selling Mario title to date, even worse than the Game Cubes Mario Sunshine, a game that was considered a flop. Mario games tend to sell in the millions, not a million or two but multiple millions, Super Mario Bros. 3 held the title of best selling game of all time at 30+ million (this was of course before the multiple re-releases) Maario 3D World has YET to break the million mark and it is been out over two months, a bad omen when you put it in with everything else. Not to mention that with somewhere between 4.5 and 5.2 million Wii U consoles barely making it into gamers homes, Mario 3D World is already handicapped due to the low install base, even if every single Wii U owner buys the game it will still not reach Mario Sunshine’s numbers, and remember Mario Sunshine was NOT a run away hit. Put it another way Knack for the PS4, a game with mixed reviews and a lot of hate for being a knock off Nintendo anyways, sold nearly twice as many units as Mario 3D World which was the highest rated game of the year. How can a mediocre game out sell a main stream Mario title?
Unlike Game Cube where Nintendo was coming off the high of the N64 and the rush of Pokemon Fever, Wii U is in a slump the company has never seen. Wii was NOT a success despite the fanboys flogging the 100 million units so, when every nursing home in the world has at least 2 you can bet your ass half of those units are not being played any more, and the reality is Nintendo stopped making games for Wii in big numbers and started shifting focus to 3Ds in 2010, Wii was a fluke that only made Nintendo a few million bucks of easy money but cost them their entire loyal fanbase and then some.
Wii sold a lot of hardware but did not sell much software. Nintendo makes their money on software and a small profit on hard ware. Wii U they are actually losing on the hard ware and they are not selling software to make up the difference. Also fans and loyalists continue to say the 3DS is doing well sales wise, yes but they ALSO sell it at a small loss to grow the userbase and they just wasted millions of R&R, marketing, and shipping on a failed 2DS, which is a weird device that plays 3DS games but no 3D, or any of the features that make owning a 3DS great other than just the games. They had to sell that at a loss too. Reality is unlike GBA-GC where they lost money on one but made up for it in software and hand held sales, they are just losing money right and left.
Cue the remarks about how bad Sony is doing as a whole. Why does that not matter to Nintendo? Because Sony is not losing money in every division and if worse comes to worse Sony can sell off a money losing division, like Columbia Pictures as example, or their cell phone division, and make a profit elsewhere, Sony has plenty of room to wiggle around and plenty to fall back on, besides Sony is selling their hardware in massive droves and that will give them profits the likes of which Nintendo only remembers having once made. But it gets worse, Nintendo has nothing to fall back on, they are a toy company nothing more. In the video game space, their second best selling toy line to date, they make a ton of great games that do in fact appeal to a very wide audience. But their hard ware has NOT had universal appeal since about 1996 when they released the weird N64 that also struggle for a while but came out rosy in the end. Their most profitable product line is their Pokemon stuff but even that can’t offset the failure of sticking with the Wii U long term.
Plan B- go mobile
This is also a bad idea, people think they should either release their back log of games onto mobile devices or just make a Nintendo tablet/phone and make that separate. Why this will fail is simple, Apple and Android are killing Microsoft, a company 10 times as large as Nintendo, why in the hell would they want to compete with powerful companies that could chew them up and spit them out? They have no experience in this and people are too deeply invested into the tablets they have to make room for another entry, one that will be inferior anyways and whose selling point is to play Nintendo games, something people are already NOT buying Wii U to do. Why would anyone buy a Nintendo tablet to play even more inferior games than they would on a system they aren’t buying good games for? IF Nintendo released a smart device they would be bankrupt within a year or two tops.
Plan C- Make a hybrid machine small portable universal but can connect to a TV also.
Why this will fail. Hello, the 3DS is equal powerwise to a Game cube, a machine released 13 years ago, the tablets on the market are already more powerful, the Wii U is already more powerful and the PS Vita is already more powerful, in order for Nintendo to make a machine that can be portable, and still capable of displaying 1080p graphics on a big screen TV and have a controller built in, wait a second they already did this it is called the Wii U and it still is not selling? Now the hyrbid sounds good on paper but it is essentialy the same thing the Wii U already is but even more underpowered and potentially more expensive, well truth is if people won’t shell out $200 for a handheld, and they certainly won’t buy another tablet they what market is there interested in a hyrbid machine? It would basically just have all the mobile games anyways so its nothing more than a 3DS with TV output, Sony already did that with PSP and PS Vita TV, nobody bough those things. Why buy an even more underpowered games machine than the Wii U already is? This is a losing battle that many saw coming when the Wii U was announced and reality is Nintendo can’t pull this off either because who wants to buy a machine that is half assed as a mobile games and half assed as TV games? It would be the worst of both worlds not the best of both worlds. They would have better luck just dumping all their money into making as many Wii U games as they could and hope for the best, something they will still fail it but I will get to that.
Plan D- Just go third party.
I would LOVE IT if they did this but here is why it will not work. Unlike SEGA who has a rich and diverse portfolio, Nintendo is essentially a one trick pony, their main games are Mario, Donkey Kong, Zelda, Pokemon, Star Fox, and Pokemon. Now if these games are already NOT enough to pull gamers into Wii U why would a PS4 or Xbox One gamer even care if they had Mario on their system, if they really wanted to play Mario they would have bought a Wii U instead right? Sega has ninja games, RPG games, Strategy games, sports games, fighting games, Sonic games, adventure games, movie based games, Ecco the Dolphin games, and so many weird odd games that gamers like its impossible to list them all. Having grown up on Sega I can assure you they in fact make more games than Nintendo does and often they have better games than Nintendo does. However going third party has caused Sega to turn into a shell of its former self and their games are hit and miss. Nintendo would do worse as third party than Sega is doing. Sonic sells well on Nintendo platforms but it falters on the other two. If Nintendo stopped making consoles Sega would stop making Sonic games as Nintendo gamers tend to be the only ones buying Sonic games these days. Nintendo has NO first Person games or open world games in their arsenal and that is where the mainstream market is. At least Sega still makes some sports games, the last sports game Nintendo made that DIDN’T have Mario in it was just Wii Sports, a generic game that only worked on the Wii. Nintendo does not nor can they compete with the likes of EA, Rock Star, Konami, even Valve. Nintendo does games tend to sell to quirky Nintendo gamers who like weird stuff but mainstream gamers pass over that stuff, even Sony and Microsoft have their share of quirky Nintendo-esque games that don’t sell well. Also Nintendo would be forced to actually compete in a market where their gamers would be split just like Sega, their fanbase would be split and therefore their sales would be all over the place. They would have a better chance just selling their games off to different studios and closing their doors than going third party.
Where does that leave them to go? Honestly I have no idea, I think no matter which course of action they take they are basically only delaying the inevitable. I would rather they did go third party and be forced to big into their catalog and bring back some great old franchises and really have to compete in a cut throat market, than if they just went away altogether. I would rather Nintendo end up like Sega rather than like Coleco, Atari, or Amiga, mere memories that fade further into obscurity with each passing generation.
Will I buy a Wii U? I was tempted just to you know throw them a bone, but if it will only cost them more money a true fan would better serve them by abandoning all hope for the Wii U and put the pressure on them to go fully third party. Nintendo could make money with Sony would step up and offer them money to put Mario or Zelda on their machine and Microsoft would pay them to get Star Fox and Metroid on theirs and Pokemon will go to iPhones. Then at least they can keep their fans happy. Honestly I think they are just on the death march so for me I will just wait to see where they end up, a tablet would be a bad idea, a hyrbid would be a terrible idea and riding out the Wii U would just further damage their reputation so as of now their best bet is to just go third party and stop all this jerking people around. I Would they ever rise to the top again, no they are finished Nintendo will NEVER return to the glory days the “golden age” of the NES/SNES, period. PERIOD. At least what they could do is is salvage what is left of their reputation and realize that Mario is not enough to Sell consoles BUT put Mario on a console that sells well without him and you have a better chance of selling Mario games at the very least.
Nintendo is holding an emergency management meeting on January 30th, that is less than a week away, expect big changes coming soon as their President has stated they are looking at a new business structure and even though they say it is not going 3rd party, I am willing to bet they are only saying that to save face when reality is they need to keep it secret until all the signatures are on the dotted lines.