In the latest generation of video game consoles, Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (ADR) (NYSE:SNE) let Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) get a year’s head start. If the ghost of Nintendo’s past is anything like the ghost of Xbox One’s or PS4’s future, this is shaping up to be a real horror show.
Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) bounced back to profitability in its latest quarter, but the real shocker here is that only 160,000 Wii U units were sold worldwide during the quarter.
Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (ADR) (NYSE:SNE) may not be breaking much of a sweat. The Wii U is a toy. Their pricier consoles are magnetic to die-hard gamers who require rich graphics and heavy-duty processing power. Just because the young families that flocked to the original Wii several years ago have abandoned the new system doesn’t mean that the Xbox One and PS4 will suffer similar fates. Right?
Well, let’s state the obvious: Wii U is dead.
Nintendo is too proud to nix it, so we all know what comes next: price cuts. It would be a shock if Nintendo doesn’t push through a potentially dramatic price cut ahead of the Xbox One and PS4 November launches. Even if they seem to be addressing entirely different markets, the Xbox One at $499 and the PS4 at $399 will seem like highway robbery when pitted against whatever the Wii U — which currently starts at $300 — will be selling for this holiday season.
But wait! It gets worse. Just 1.03 million Nintendo Wii U games were sold during the quarter. That may seem like a big number, but it’s terrible. The Japanese gaming pioneer has now sold just 3.6 million Wii U consoles since introducing the dual-screen system last November. This breaks down to the average user buying just 0.29 titles during the last three months.
Now, we are talking about first-party releases here. Nintendo’s own release slate has been pretty dry, but this is the one gaming platform where its in-house games are the food of choice for players. What does it mean that less than a third — and likely far less than a third — of its recent buyers (and they’re all recent buyers) have bought a new Nintendo Wii U game this past quarter? They spent $300 or $350 on a machine, and now they’re not feeding it?