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Three theories for why the Wii U is struggling

Reading articles about the “demise” of Nintendo is a good way to stumble over some terrible reasoning and misinformation.  MG Siegler et al are all too willing to liken Nintendo to BlackBerry, despite the company’s excellent financial position (especially in light of its small workforce – Nintendo is not a gigantic operation like would-be competitor Microsoft, or like BlackBerry is/was) and its exceptional success with the Wii and DS over the past decade.

The angle of comparing Nintendo devices to “mobile” (an increasingly meaningless word applied to gigantic phones and laptop-grade tablets) is overplayed – certainly, there is some competition between devices for casual gamers who are now into Candy Crush but might have been into Nintendogs in a past era. But Nintendo isn’t really making “mobile” devices in any sense: the tablet controller of the Wii U is slightly awkward as a standalone device, and even the (3)DS is mostly a device for gamers at home, not on the go. It isn’t trying to make a play for the “mobile” audience – maybe that’s a bad move, maybe it isn’t. Twenty years ago, it looked like a mistake for Nintendo not to make full-fledged PC games, but it’s still around.

If Nintendo has competitors (I’m not sure if does – like Apple, they don’t give a shit about any other companies), they’re the home consoles – the Xbox and PlayStation lines. And it’s competing against them with not only the Wii U, but the (3)DS, too (more on this later). Sure, the console makers may be losing their asymmetric battle with “mobile,”  but if they are, it’s hard to tell, in light of record-breaking opening day sales for both the Xbox One and PS4. Maybe there’s enough attention out there to sustain both consoles and “mobile.”

But then we come to the Wii U, the poster-child for both Nintendo’s assumed doom and the decline of the console business due to “mobile” and disruption and blah blah blah. The Wii U may finally cross the 4 million units sold threshold at the end of this year, making it a huge disappointment compared to any of Nintendo’s previous offerings, save the Virtual Boy. Sales could turn around; just look at the 3DS, which IGN hilariously declared doomed in 2011 but is now the most popular console in the world. However, I think it’s more useful to understand why it has struggled than to prognosticate on its future. That said, here are my three theories for why it has had such a rocky start.

Theory #1: It isn’t powerful enough
The argument: The Wii U has a PowerPC processor – that sort of says it all, what with almost every PC in the world now running x86 of some sort an everything else – mostly “mobile” – running ARM. Its technology is from a different era. It can output HD content, but not with the extra-fancy shading and high frame rates of the Xbox One or PS4. Developers won’t make anything for it because it doesn’t have the AMD chips found in its competitors and lacks the muscle to power yet another dystopian shooter.

My take: Developers are fickle. Many ended up scaling down their games for the standard-definition Wii last generation, then abandoned it near the end of its lifecycle (which didn’t matter – the console still received plenty of first-rate games, mostly from Nintendo itself). Maybe a system-selling title like Super Mario 3D world could cause a change of heart.

But all of that is secondary. Specs are mostly irrelevant – sure, there are Internet goons who only care about graphics and the newest batch of corporatized FPS crap, but if one looks back at the history of consoles – or even consumer electronics as a whole – being on the bleeding edge hasn’t always translated into “winning” the battle. The Wii outsold both the Xbox 360 and the PS3. The iPhone has outsold every single 1080p quad-core Android device.

The question is, can Nintendo and others put the Wii U’s particular strengths to good use, like they did with the Wii’s motion-sensor technology or the N64’s thumbstick. I think that the potential is there – just look at ZombiU or The Wonderful 101 – but more needs to be done to exploit the GamePad. On the HD side, Nintendo has already shown how even something as mundane as 1080p resolution can be reimagined with its subtle use of shadow and translucency in Super Mario 3D world. There needs to be more of this.

Theory #2: It hasn’t been marketed well

The argument (by way of anecdote): I was at a Target in downtown Chicago on Black Friday. A woman was trying to buy Just Dance 2014 for the Wii, but noticed that there was a Wii U version, too. She asked the sales associate what this “symbol next to the Wii” was – that symbol being the “U.” The associate had to explain to her that the Wii U was a totally different console. Customers don’t get the distinction.

The Wii U’s name is stupid. It should have been called the Super Wii for clearer differentiation. Similarly, the Wii U has all the capabilities of the Wii – the motion-sensing, Wii Remote compatibility, and the ability to play SD Wii games -, but most people probably wouldn’t even know this, despite the name similarity. It doesn’t ship with a Wii Remote, despite some of the bundled titles (like Nintendoland) requiring one for certain sequences. It wants to be a brand new console but also compatible with everything from the Wii, yet marketing has succeeded at making it seem like neither.

My take: Sure, the name maybe was an uninspired choice. But similar problems don’t seem to have affected names as bad as “Xbox One,” which is not the first Xbox, or the previous “Xbox 360” (compared to “Xbox”). Calling it the Super Wii and bundling a Wii Remote and something like Wii Party U could help, but it’s not the Panacea (dumb ZombiU reference).

Theory #3: It’s being cannibalized (by the 3DS)

The argument: Before you start worrying about parallels to Robinson Crusoe, think about this: Nintendo’s console business is unique.  Since 1989, it has been supporting at least two consoles at one time, a portable one and a TV one. These two lines ran parallel for decades, with little overlap except for the IPs that made their way onto both platforms. The Game Boy was very different than, say, the SNES, and getting one system did not give one the same experience as the other. Ditto for the DS and the Wii.

But this has changed in recent years, largely because (I think) the 3DS was so underestimated during its first few years of existence. Even Nintendo seemed to struggle to wrap its head around what the 3DS should be early on – it wasn’t until Super Mario 3D Land and the much-needed 3DS XL redesign that the console began finding its footing. Prior to those two events, it was mostly a DS lookalike with some cool 3D graphics. But the run of first-rate software titles and a larger screen (the importance of the latter can’t be overstated) showed that the 3DS was something very different, something that realized the promise of the DSi and integrated console-level amenities like high-quality soundtracks and animations. I’ve argued that Nintendo is essentially a software company that dabbles in hardware, and the 3DS bears me out – it took good software to start moving hardware.

The perhaps unintended consequence of the 3DS’ maturity, however, is that it is cannibalizing Wii U sales. Cannibalization occurs when one of a company’s lower-priced products drives down sales for its more expensive ones, since they are targeting the same audience. The 3DS XL is nearly a Wii U GamePad on its own (and in Japan at least, the 3DS XL is way more popular than the standard-sized 3DS) and its software provides what could be called a “Nintendo fix” – Mario, Pokemon, Zelda, the full lot. Users get their fix from the 3DS and don’t need to get it from the Wii U, which doesn’t have a Pokemon or Zelda title and only recently got a truly new Mario title.

My take: Companies like Apple have long been conscious of cannibalization – in Apple’s case, of Mac sales by the iPad, or high-end iPhone sales by low-end iPhone sales. It’s a difficult issue to sort out, but in a way, it can be a good problem to have – at least something is selling, albeit perhaps not at the price point/profit one would hope.

The idea that Nintendo is cannibalizing its Wii U sales with 3DS sales probably doesn’t occur to many observers, since none of Nintendo’s competitors have a similar console business. Microsoft doesn’t do dedicated portable gaming machines, and Sony’s Vita is a failure compared even to the Wii U. Maybe Nintendo really isn’t competing with Sony or Microsoft – it’s not in a specs race, or a race for the best Assassin’s Creed 4 graphics, but simply trying to selling as many Nintendo devices – 3DS, Wii U, or otherwise – as it can. Given Nintendo’s history and resilience, that makes much more sense than arguments about the Wii U’s power or marketing

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