Nintendo to reveal new strategy on back of Wii U failure

Business

January 28, 2014

Having ostensibly admitted that the Wii U has been a business failure, Nintendo is set to reveal a new management strategy on Thursday (28 January 2014).

Reuters reports that Nintendo is sitting on a cash pile of $8.3 billion (±R91 billion) which it will likely use to enact this new strategy.

Nintendo has budgeted $684 million (±R7.5 billion) for research and development in 2014. This is a record amount for the company – could it mark plans to deliver a new powerful gaming console to compete with the likes of PS4 and Xbox One? The rumours have already begun circulating: Nintendo next-gen Fusion hardware specs: rumour

Analysts expect that Nintendo will make a strong push to better market its video game characters, while retaining its basic strategy of making its own hardware and using in-house developed tittles to drive sales.

It is also speculated that Nintendo will do something about their very weak online presence. Competitors Sony and Microsoft are leagues ahead with their online services, and so Nintendo would do well to crack into this space.

For the financial year ending March 2014, Nintendo cut its sales forecast of the Wii U console by 70% – from 9 million to 2.8 million units. Wii U Game sale projections are down to 19 million from 38 million units.

Analysts suggest that a lack of platform-driving titles and a severe 6-month lull between launch and the next batch of games impacted the success of the console. The Wii U touchscreen gamepad didn’t really offer much to existing Wii owners who saw no need to upgrade, and there were no games that really took advantage of it to drive sales.

This also creates a negative feedback loop for third-party developers who are loathe to create games for a failing platform. This may be evidenced with EA pulling away from the Wii U soon after its launch, and Ubisoft taking their once Wii U exclusive Rayman Legends multi-platform.

Some have called for Nintendo to take its back-catalogue of games to mobile platforms, or to spring them off into other mediums such as TV shows and comics. Nintendo has been resistant to these ideas.

Tomorrow we will find out their new strategy.

What do you think Nintendo needs to do to recover from the failure of the Wii U? Let us know in the comments.