Nintendo lowers forecast for Wii U sales from 9M to 2.8M

From Nintendo's full year financial forecast:

The big numbers, from what I gather via the Bloomberg report, are:

• Nintendo lowers forecast from ¥55B profit to ¥25B LOSS.
• Forecast for Wii U sales lowered from 9 million to 2.8 million.
• Forecast for 3DS sales lowered from 18 million to 13.5 million.

The Bloomberg report also contains more info, but basically, it's fully apparent that Nintendo was out of touch, in some fashion, with the market. Going from a projected 55 billion yen profit for the year to a 25 billion yen loss is kind of a huge discrepancy, and that lowered number for the modified forecast for Wii U sales doesn't look too good either.

Does this mean certain things will change in relation to Nintendo sooner than later?

Previous Nintendo console numbers via NeoGAF:

N64

96/97 - 5.80 million

97/98 - 9.42 million

98/99 - 7.86 million

99/00 - 6.49 million

00/01 - 2.85 million

01/02 - 0.50 million

Total - 32.92 million

GameCube

01/02 - 3.80 million

02/03 - 5.76 million

03/04 - 5.02 million

04/05 - 3.92 million

05/06 - 2.35 million

06/07 - 0.73 million

07/08 - 0.16 million

Total - 21.74 million

Wii

06/07 - 5.84 million

07/08 - 18.61 million

08/09 - 25.95 million

09/10 - 20.53 million

10/11 - 15.08 million

11/12 - 9.84 million

12/13 - 3.98 million

13/14 - 0.47 million?

Total - 100.30 million

Wii U

12/13 - 3.45 million

13/14 - 2.80 million?

Satoru Iwata's explanation concerning the numbers. Lots of interesting stuff in it, one paragraph that stands out is the following:

We will provide more information on our short-term as well as mid-term prospects at the Corporate Management Policy Briefing to be held on January 30, 2014, which will take place in Tokyo a day after we announce our financial results for the third quarter.

So we might hear about Nintendo's plans to better their situation at the end of this month or the beginning of the next.

That should say 3DS lowered from 18 million to 13.5 million.

You're right, thanks.

Super Smash will save them, right?

75 billion yen discrepancy is crazy.

Things will likely change, whether it's the acceleration in the release of new, more competitive hardware or something else. It's not a loss to ignore, but it is, for now, one that they can take. Though obviously this pattern can't hold in the long-term.

*Cue parade of "Nintendo is teh doomed!111 Must go third party!!11" trolls.*

I don't think Nintendo is doomed but I think the heads of Nintendo are due to be out. Investors can't put up with that kind of miscalculation, it's totally incompetent.

The weirdest thing in that report is that they've actually increased projected Wii software sales from 20M to 26M.

Even though the 3DS numbers have been reduced, they still seem pretty solid. Certainly still a far cry from all that talk of "dedicated gaming handhelds are dead" that "industry analysts" were throwing around a few years ago.

The big question mark is really just whether or not they can turn around the Wii U.

hmmmmm I don't think nintendo is doomed, but still realistic forecast could make things more focused and organized. I don't know much about financial, so I don't pretend to know jack.

The Wii U isn't allowed to shit the bed until Bayo 2 comes out.

Man, those Wii numbers are crazy.

2011/2012, it still sold 9.8 million? Those were like, the darkest imaginable times for that console when new software was technically still coming out (almost none of it very good). Was that single-handedly Skyward Sword causing those system sales? I know stuff like Xenoblade Chronicles and The Last Story came out in that time span, but I can't imagine they were causing Wiis to sell like hotcakes or anything.

2012/2013 is down to 3.9 million, but like, almost zero Wii games even came out in the latter half of 2012.

Anyway, man, that first year of the Wii U isn't even that bad. It was shaping up to be another Gamecube. But the fact that sales aren't picking up and are likely slowing down, is just really bad news. But also it was dumb of them to put it out in November 2012, when they had no killer software ready until summer 2013 (Pikmin 3 and onwards, basically, though even now Wii U games remain kinda thin).

The 3DS had the same problem. Frankly, they should've just delayed the 3DS like 6 months, and had it launch with Super Mario 3D Land. Instead, it launched with complete garbage and was overpriced, and they had the whole Ambassador debacle as a result. I know Nintendo wanted the Wii U out ASAP because the Wii was dying terribly, but they almost should've waited until Holiday 2013 (September, October, November, I don't care) when like, Pikmin 3 and Wind Waker HD and The Wonderful 101 and whatever were all actually done. They gained basically no advantage by launching in Holiday 2012, because it took like 9 months for more good software to materialize, and instead word of mouth was "Don't buy it yet, there are no games for it".

By comparison, the Gamecube launch lineup was fucking fantastic. Luigi's Mansion AND Rogue Squadron II: Rogue Leader? And like, Pikmin and Smash Bros. Melee both came out like a month later in early December or something? The Wii U really needed that level of preparedness in terms of software, and it just isn't there.

We will provide more information on our short-term as well as mid-term prospects at the Corporate Management Policy Briefing to be held on January 30, 2014, which will take place in Tokyo a day after we announce our financial results for the third quarter.

I wonder if this is the day Iwata will be out of the game. Nintendo needs a change and that very fast.

They need to hire new UI designers. They need to make the front end UI of the Wii U to feel way snappier because it is sluggish as shit and super ugly. Come up with something more sleek that runs much faster. I mean make it an XMB if you don't have the horsepower to make it run smooth...

I think the craziest thing is that they lowered the 3DS projections. Hard to imagine them having a stronger lineup than the one they had last year.

At this point they might as well do something crazy like doing a full rebranded relaunch, or just outright killing the machine and moving on. The Wii U, as it is won't magically regain massive ground in a post PS4/Xbone world, Nintendo desperately needs to go hard.

It's clear that launching without any "killer apps" hurt the Wii U's sales when it was released, but I can't believe that it would have sold better coming out the same season that the XOne and PS4 did. At the time, it sold to many folks just excited for something new, and now it's beginning to sell to people who want to play those games you mentioned.

@joshwent: Yeah, that's a good point as well. Either way, the Wii U was only selling to people with the disposable income to waste money on launch consoles, but yeah, had it launched this year, those people might've had their income tied up in Xbox One and PS4 purchases.

Fucking woof.

go away.

... should miayamoto die?

i mean, he didnt even invent call of duty

@ripelivejam said:

Come on now. I will gladly take most opportunities to disparage Darji's character, but that is one of the least trolly statements I've seen him make in a while.

While I don't think Iwata is personally holding back the company or anything, the last couple years for Nintendo have been rough, and I don't think it's totally out of the question that maybe he would step down and they'd pick someone new, just to placate stockholders or something. And Nintendo does need to A) put out more original games, instead of mining Mario and Zelda nostalgia super hard, and B) get their online shit in order, because good God, what an antiquated mess. Iwata resigning doesn't necessarily fix that, but Nintendo does need to change.

It's not really the same situation, but I almost sort of want Shigeru Miyamoto to retire, or at least take on a vastly different role at the company? He has made his mark on video games as a medium, and I think he's pretty happy with the results at this point. There was some interview Miyamoto gave about wanting to be in less of a supervisory role, because too often this would happen:

Younger designer: "I have this problem with this game I'm designing. How would you fix it, Miyamoto-san?"

Miyamoto: "You have to find the answer yourself. If I tell you how I would make the game, what will you do when I retire?"

I'm paraphrasing a lot, but Miyamoto basically said he wanted to be way more hands off and give the younger Nintendo designers more of a chance to grow on their own instead of treating him like the Leonardo da Vinci of game design who can do anything. He wanted to sort of teach them, while ultimately letting the projects be in their hands, not his. I wish I could remember which interview in particular I'm thinking of. I think the interview caused a big "Miyamoto is retiring!" scare, because he keeps telling his subordinates "Pretend I'm retiring, and imagine you had to design the game without me telling you what to do".

Man, I cannot imagine being a game designer working at Nintendo in the shadow of Miyamoto.

Yeah basically this. Nintendo needs to change now. If they are forced to change when Miyamoto is gone it will be much harder to do so. As for Iwata. Normally it would be almost impossible to get away with such a huge correction in terms of sales and sold units, so it is pretty reasonable that many people now expect Iwata to go. But this also does not automatically "save" Nintendo. Let me quote someone from Neogaf since I think this fits my impression perfectly about the current situation.

Stop living in a conservative bubble, make aggressive strides to expand software development culture on a global scale, listen closer to third parties and the echoes of the market they are competing in as much as they like to think they're not, be attentive to rapidly changing world of technology and economics, and understand that an overwhelming majority of customers do not want to put down US$300 for an unappealing piece of hardware that has scarce releases of Super Mario in between shovelware when for an additional $200+ dollars they can get a system with significantly broader software and genre variety, routine software releases, and a strong promise of continued support into the future.

Nintendo exists on the same planet and in the same market as everybody else mingling in home/portable technology and software. This isn't the 90s, where a dedicated game machine that just does what it does and it's Sony or Sega or Nintendo or whatever is good enough. The way customers perceive and value both software and hardware has changed. The expectations have changed. The risks and rewards have changed. The development environment has changed. The economy has changed. The customer culture of buying hardware has changed. And all of these things have changed rapidly and dramatically over just the last few years.

Despite this Nintendo operates as if nothing has changed and they can keep playing the same game they've been playing for the better part of two decades, despite the competition they seem to deliberately ignore rapidly adapting and growing alongside the rest of the world. People do not want to buy a $300 Mario box. They don't want to buy this, and wait three/four/five months for the next noteworthy game, one that might not even be a franchise or genre they're interested in. Not everybody who likes Mario likes Zelda, or likes The Wonderful 101, or likes Metroid, or F-Zero, or everything else. And that just makes the situation worse, when someone can put that $300 towards another platform that's going to have far more software released far quicker.

It's an investment, for customers and shareholders, and at the moment Nintendo is a bad investment.

Well Nintendo, your stubbornness and unwillingness to change is biting you in the butt. I have a WiiU and love it but clearly they dont know what the hell they are doing with it. So much potential wasted!

Damn. Big changes need to happen.

That is a crazy discrepancy.

No telling how a Japanese company like Nintendo will respond. If that was an American corporation, some executive somewhere would've been straight-up assassinated by now. Just sniped through their corner office window.

I wonder how long it's going to take them to realize $299.99 is far too much when Sony has a vastly superior piece of hardware for only $100 more.

I would love to pick up a WiiU, love me some Nintendo, but $300 dollars for Zelda is just too much.

@xalienxgreyx: I think this is their problem (other than the current lack of games). The Wii did really well because it was cheap and accessible. Even if all you did was play a few first party Nintendo games, it was easy to justify the price. Not so much with the Wii U.

Although as always, the people crying "Nintendo are doomed" are pretty pathetic, just as it was when the 3DS was having trouble.

Agreed, slash the price a hundred dollars, and release a sku with a decent HDD. Take the loss on hardware sales, but actually move units like your competitors.

So the Gamecube which was considered Nintendos faliure thus far is set to have sold almost as many units in it's 2nd year as the Wii U's combined first and second year on the market? Horrry shit

Can we also cue the parade of "Nintendo doesn't need to change anything!!!11" as well?

I don't think Nintendo is doomed but continuing in this direction isn't going to be helpful where new versions of the same hardware along with random interesting release of something interesting every now and them will make them go the way of Zynga.

That doesn't really solve the issue of them lacking the third party support that drives a lot of the Sony and Microsoft sales. Think of all the hardware bundles involving third party software that those companies have made. Right now the only third party hardware bundle that Nintendo offers is a Skylanders SwapForce WiiU, and I assure you those sales are dwarfed by the sales of the Wii version of the game.

Iwata did mention that he will be taking another pay cut, but I don't know that that can continue to placate investors. The most surprising thing is that they acknowledge investigating mobile devices for the future.

Not good news for gaming to be sure. Say what you will about the WiiU it's always good for consumers to have strong and diverse competition. That being said, I'll be rooting for Nintendo while only buying their handheld products until they figure out the proper price for that console or until Bayonetta 2 makes me forget my better judgement. The burn from buying the 3DS before the price drop still hurts.

It's all a circle, move more units, get more third party support.

It's convenient to blame Iwata, and I'm sure he had something to do with the unrealistic expectations, but it's also consistent with Nintendo's corporate "personality" to obliviously act without regard to outside circumstances. It's probably why what they offer is so different than any other company, because they don't form accurate calculations of what people want and try to act on those - they just make what they want.

So, they could be optimistic and stay the course or be pessimistic and... do what? Their console's already out, they probably don't have another in development. They can keep doing what they're doing (along with some marketing trickery, maybe a rebrand? Definitely a price cut) or they start throwing major things overboard to keep the ship afloat.

Iwata's comments from today's press conference, Nintendo will be thinking about a new business structure and might be looking at mobile for that.

http://www.computerandvideogames.com/445870/nintendo-thinking-about-a-new-business-structure/

In the old days, yes this was true. The problem today is that Apple and Google and Samsung are shipping more hardware with a cheaper and easier to access environment and an easy to manage digital store.

In a lot of ways, Nintendo is stuck where Microsoft is stuck in that market. Yes they need to sell more units where they could double or triple or quadruple the amount of units sold but that is still a fraction of the global market and still not worth the time for any ISV to bother with. Nintendo could get to 10 million by the end of 2014 and the next big mobile and indie game won't be on Nintendo systems.

Talk about waving a white flag.

It's almost a certainty that their hardware R&D is already working on successors to the Wii U and 3DS. That work generally starts not long after the new consoles are out of the gate.

But you are right in that it is convenient to blame Iwata; he's the visible head of the company. But I don't know if he should be quickly dismissed. He did, after all, lead the company during the launch of the DS and Wii, and say what you will about it, but the Wii was a highly successful console in terms of hardware sold. I'm just glad that I'm not the one making the decisions at this point, because I don't know what their best course of action should be (unlike every fourteen-year-old faux business expert that thinks Nintendo should blow every yen they have on their next console like money was going out of style).

So at this point what saves them? Wii U needs some kind of marketing rebrand or a reboot and price cut to go with it. I don't think Nintendo are going to strike lucky twice enticing the casual market...these things come along every so often PS2 affordable DVD player, Wii - accessible gaming to traditionally non-gaming audience.

I haven't bought a Wii U either as a "hardcore" gamer I've found my lust for Nintendo games having diminished over time. Only Metroid and Zelda still hold that same pull for me.

So if they don't have the casual pull or the hardcore gamer covered where do they sit? I wonder if they would benefit from bringing in new blood at the higher levels people who will make decisions that just aren't being made. Like get one of these personalities in that's also an engineer. It's not enough that Reggie can just talk the talk. Get someone in the US division to drive better relations with third parties to at least make those ports trickle in. But then it's a vicious cycle these things never sell. If you owned a PS4/Xbox One and a Wii U as a second console what are you going to FIFA, COD, Assassin's Creed etc.... on?

Either that or ride it out and get to work on whatever their now conjoined portable and home console hardware division are working on....

@bisonhero said:

I can almost guarantee you that a large portion of those numbers are -- just like a large portion of the Wii's overall lifetime sales -- due to casual "Wii Sports only" owners, especially when you consider that new console sales in those years are higher (much higher) than the sales of even the biggest exclusive games like Skyward Sword. That's got to be due in large part to the leftover cultural awareness of "oh hey, I remember people talking about that Wii thing, maybe I should pick one of those up now that it's cheap." It's a steady downward trend from its true fad peak, but that peak was so high that even the dropoff years are still pretty impressive.

@hailinel said:

That may all be true, but the fact that Nintendo apparently overestimated its Wii U sales by more than a factor of three times is somewhat alarming. Low sales isn't the real story here, it's Nintendo's apparent disconnect with reality.

Nintendo doesn't need fake mobile distractions they need support from developers and AAA studios.

People are greatly over exaggerating mobile games, people only play them when they're not home and the only reason people play them at all is because they're free or cost under a couple dollars.

Mobile games are a joke and the fact that analysts believe they'll have any impact on AAA titles is an hilarious idea at best.

It's far more "socially acceptable" to pull out a cell phone for a distraction than a PSVita. I'd rather sit on a bus and play Pokemon than kill my battery and my brain grinding Clash of Clans but then again I'm not insane.

Hopefully Nintendo can figure something out. I'm not worried about them going away anytime soon, but having to change your forecast by that much is not a good thing.

What I want out of Nintendo:

The third party ship has sailed for the WiiU, you won't get 25% of the hot third party games on the platform. So how about you fill that hole with NEW GAMES. The only game announced or released for WiiU that looks exciting is X. The rest is sequels with a limited amount of new ideas. The Nintendo magic isn't enough anymore. Put out ambitious games, you have billions in the bank, stop it with the lazy nostalgia train, you won't get away with it this time.

What would make them the most profit:

kill the r&d expenses and start moving to mobile and third party. Looking at your WiiU games "Nintendo needs special hardware to make unique games" is now complete bullshit and you know it. You might make a profit on your next handheld but that market is on the decline. Just save the billions you need to develop new hardware and put that in games that will sell like hot cakes on platforms people will actually own.

@xalienxgreyx:

You are making the same mistake Nintendo is: I don't mean Nintendo needs to do mobile development. I mean Nintendo needs to be aware of the tech and industry and adopt their practices. It is stupidly easy to start development on Android and iOS and help is readily available from the vendor let alone a large online community. On the other hand, it is hard to get dev environments to start working on DS or WiiU is notoriously hard let alone getting support for technical questions (there is a thread in these forums about this where I even try to defend Nintendo on this). Why would any team large or small bother with Nintendo systems? Because....?

But whatever. The biggest people interested in DS and WiiU development appears to be Nintendo where price cuts won't change that much. By the time they get to 5 million on the Wii U, iOS and Android have moved onto the next versions of the hardware where they give their kids their old stuff and we are back to the same state where kids are still on the same old Nintendo hardware playing some Nintendo game while they also have a tablet or phone that has a huge difference in tech and capability.

The most common refrain I hear from the pro-mobile people isn't that Nintendo should develop new games for the iPhone so much as they should re-release old games from the NES and SNES era for purchase. It would be a low investment for an easy influx of cash. Even this would represent a change of course for them. I wouldn't be that interested unless they had some really novel ideas on controls, though.

@hailinel That's fair enough. What I meant wasn't that they weren't in development at all, but rather that whatever their new console is is probably still in the concept phase. This might not be true either, I guess, but the important point is I doubt that whatever they're working on can be turned around and put in boxes by this next holiday season.

About time they woke up, I have no idea how someone could think that those games last year would drive demand

“We are thinking about a new business structure,” Iwata said at a press conference today in Osaka, Japan. “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”

I don't know what the breaking point for investors will be with Iwata, but I'm not sure Nintendo's leadership has a plan to get out of this mess. Won't be the board of directors, who are all Iwata's people. They're repeating the same mistakes of previous generations after swearing up and down they wouldn't. Love Nintendo, disappointed in their inability to adapt and react. People say panic mode Nintendo is best Nintendo, but all I'm seeing is a company playing all their safe bets and unsure where to go next.

Seeing how there is no third party support for the Wii U, and Nintendo themselves haven't made good use of the controller; why don't they just patch all the existing games to not need the tablet controller and stop packing it in with the consoles completely, that would allow them to severely drop the price, re-brand it the Wii HD so people will have a reason to want it, ride that out for the next two years until they can put together a real console.

I think you nailed it right there. It's funny how launching early really did not do them any favors. They should have waited until they were feature rich and launch somewhere in the middle of last year with some heavy hitters and being the cheapest system on the market.

@kidavenger said:

That's the craziest part of all for me. The big central feature of the Wii U is the tablet controller, and aside from a few minigames in Nintendo Land, there has been almost no creative use of the tablet controller that really justifies its existence in first-party games, where you'd think it would be the strongest. In Mario Kart 8, the tablet controller is basically an (unnecessary) status display and a big horn button. That's absurd. If even Nintendo can't figure out how to use that controller, you have to start to wonder why they even invented it in the first place. Did they just assume that third parties would come up with great ideas for them?