Yes, someone does buy Wii U games
I recently began a new job, and I have really enjoyed getting to know my new coworkers. I have met many of my best friends through work opportunities, and am always excited to learn about the interests and ambitions of the people who will share the majority of my waking hours. A few weeks after I started work, talk turned to video games (my N7 messenger bag is often a good conversation starter) and the dual launches of the Playstation 4 and XBox One. I told a coworker that I already owned a Wii U, and his response was, "what's a Wii U?"
Apparently most gamers in America have asked the same question, with pre- and post-holiday gaming news focusing on the stark decline of Nintendo's market share.Wired reported in December that Nintendo had only met 5% of its Wii U sales projections for the fiscal year heading into the holiday season. News has not improved in 2014, as the company's stock took a significant hit after announcing a reduction of the Wii U's global sales estimate by a staggering 69%.
Reading these articles have been heartbreaking for me, a lifelong Nintendo brand loyalist. Starting with the NES at seven years old, I have owned every generation of Nintendo system and only Nintendo systems. Other consoles were often flashier, with better graphics, sleeker advertising and adolescent-attracting mature content, but Nintendo games embodied joy, creativity and craftsmanship. As a kid, I was stunned by the intricate level design of A Link to the Past, captivated by the intensity of Donkey Kong Country and engrossed in the 3D gymnastic adventures in Super Mario 64. When nearly every other software developer was attempting to be Michael Bay, Nintendo was Hiyao Miyazaki.
The Wii U's sales performance is especially disappointing because it really is a fantastic console. The lightweight Game Pad's second screen allows me to take my game anywhere in my home, and the Wii U also has apps for Netflix, Amazon Instant Video, Hulu and YouTube. As an HD system, I was finally able to experience the games I had missed on the Wii, including the Arkham series and Mass Effect 3. I also got the chance to play an HD version of Legend of Zelda: The Wind Waker, (a game I missed on the GameCube) and I'm excited for the next rollout of Nintendo exclusives, including the upcoming Donkey Kong, Mario Kart and Smash Brothers sequels.
There is no doubt though, that Nintendo has decisively lost this round of the gaming console wars, and barely even registered as a participant. The Wii U is a deeply satisfying system, but I have never seen any product launch botched so thoroughly on the development and marketing fronts. The Wired article covers some of the basics - issues with the price point and developing for the Game Pad, competition from tablet and smartphone devices, the lack of A+ exclusives at launch - but the problems ran far deeper.
Nintendo gambled that getting a one year head start on its competitors for next-generation consoles would offset the known disadvantage of the product's lacking hardware, compared to Sony and Microsoft's planned offerings. This may actually have worked if they had not lost a major point of parity almost immediately after the Wii U was released. Following an initial slew of ports, Electronic Arts pulled Wii U support entirely, mainly due to disagreements over online management, denying Wii U owners the opportunity to purchase new versions of Madden, FIFA, and NHL games, along with major licenses like Battlefield. Sports games and multiplayer shooters represent an enormous segment of revenue (as many casual gamers buy those games and nothing else), and a loss of access to these games mean the target audience won't even consider the Wii U.
The damage done by this loss of parity was compounded by Nintendo's failure to create effective differentiation. One of the company's strongest assets has always been its enormous library of legendary games, and the original Wii's Virtual Console offered nearly every classic from the first three system generations. The Wii U's additional power had many fans looking forward to downloading even more games from the GameCube, since the GameCube disc tray in the Wii was retired for this edition. However, a year later the GameCube library is completely missing from Nintendo's eShop, and so are nearly all of the games that were already on the Wii's Virtual Console! The near-total absence of Nintendo's game library is inexcusable, and it's shocking to consider the amount of money they may have lost as a result.
Even with all of these difficulties, the Wii U could have been a success if the marketing plan had been sound, but Nintendo not only provided insufficient promotional support for the system, their positioning was tragically outdated. Between the original launch window (November 2012-March 2013) and this holiday season, I did not see a single Wii U ad in the print or broadcast channels, which is outrageous for a consumer-focused company's centerpiece product. When Wii U ads did reappear on television, this was what audiences saw:
The ad is "cute" and conveys that the Wii U is perfect for "family bonding." This positioning worked for a brief period in the mid-2000s, and doesn't reflect the reality of the gaming audience now. Generation Y (I refuse to use the "M" word) is the first generation that grew up with video games, and consumer behavior has shown that this generation still wants to play them well into their adult years. This age demo also has far more disposable income than families with young children, and given the high price point for consoles, gaming companies need to maximize their appeal to the 20s and 30s crowd.
Game systems have also moved beyond simply games into all-in-one entertainment units, in an effort to overcome the high price point entry barrier. Compare the Wii U's ad to these ads for the PS4 and XBox One:
These ads are remarkably similar, but they both convey that these game systems are hip and immersive entertainment experiences for adults, and their offerings suit a wide variety of interests. There are not any kids in these ads because again, kids are no longer the industry's main audience.
Nintendo has recovered from poor launches before, with the 3DS being the most recent and prominent example, but the Wii U debacle should represent a sea change in the company's philosophy. Beyond playing nicer with the third party developers, and staying on the curve with current hardware expectations, Nintendo needs to catalyze their brand's story. The Mario Bros., Link, Kirby and Donkey Kong are characters that elicit very fond memories for me, but I represent a niche and declining audience. Nintendo hasn't created new brand icons in the 21st century, let alone any that align with the most powerful target market. Nintendo needs their own Lara Croft, Nathan Drake or Commander Shepard - a signature, exclusive character who can be used for "A+++" releases aimed at the core audience. An argument can even be made that Nintendo already has that character in Samus Aran, who if given a compelling backstory and strong characterization can be the cinematic character Nintendo desperately needs.
Ideally, Nintendo needs far more than one new character, and their creative direction needs to be based around developing a modern generation of heroes for their audiences to enjoy. The existing characters can still stay and even maintain prominence because they are still viable for a specific market segment, but effective promotional target toward the group with the largest spending power is critical to the company's long term survival.
Shigeru Miyamoto is one of the greatest creative minds of the past century, who launched an entire, multibillion dollar industry by himself through thanks to an unparalleled ability to execute his vision. The talent behind Nintendo is undeniable, but it needs to adapt to the current market landscape. Otherwise, the entire company may occupy the same status as the Wii in my new company's conference room: unplugged and unnoticed.