TMCnet Feature
October 30, 2013

Profits Up at Nintendo Again, but Slow Wii U Sales Prove More Harm than Help

By Steve Anderson, Contributing TMCnet Writer

It's something of a good news / bad news situation for Nintendo, as a return to profit has been found for the six month period to September 2013. But while the company is profitable again, the profits are somewhat weaker than could be had, and the biggest drain on the company right now seems to be that which should be fueling much better profits: the Wii U system.

During the six months to September 2013, the company posted a profit of 600 million yen (about $6.1 million U.S.), which was a definite improvement from the same period in 2012, which featured a 28 billion yen loss (around $285.26 million U.S in today's figures). But despite this improved picture, the Wii U is still, according to Nintendo, offering a “negative impact on Nintendo's profits.” But there are reports to suggest Nintendo expects something of a turnaround in the near-term future, as the company expects to sell nine million such devices by March 2014.

Despite the improved profitability, however, there has been a sales loss to note. Nintendo reported a 2.2 percent drop in sales, for a combined total of 196.6 billion yen (just over $2 billion U.S.). Nintendo reportedly made a push to improve sales by dropping the prices on both the Wii U and the 3DS consoles, though given that the Wii U has been available since 2012, the cut doesn't seem to have helped much. Nintendo, however, seems to be hoping for some future sales.

Game analyst with SMBC Friend Securities Centre Shun Tanaka came out as saying that the console itself was “not as good as we had originally expected”, but pointed to the Christmas selling season as the true sticking point for the Wii U and the best determination of the overall annual performance, saying “So their real fight lies ahead.”

But what Tanaka doesn't note is that the issue isn't so much the Wii U itself so much as it is the issue of games for the device. More specifically, there really aren't that many in the pipeline, and there aren't that many released, either. Looking at the near-term future for the Wii U doesn't exactly provide a lot of encouragement, and a system that's been out for almost a full year now really should have more titles on hand. It's been remarked on more than one occasion that games sell systems, so the revelation that the Wii U isn't selling like gangbusters really should be accounted for accordingly.

The plain and simple truth of it is, if Nintendo wants to sell more Wii U systems, it desperately needs more games to sell along with those systems. No one's going to buy a system just to own a system; the games are the biggest accessory of any video game system. Without the games, the Wii U—or any other system from the Xbox One all the way to the original Xbox and beyond—will just be a particularly expensive paperweight. Nintendo's got the intellectual property to make a slew of games. Mario and Luigi, Zelda, Metroid, Kid Icarus, and a host of others all make up the mix. If Nintendo can rally that intellectual property and get it in play, it's a lot more likely to see better sales, and that's what Nintendo needs to draw the third party game makers in as well. More games, more systems, more sales: that's the cheat code Nintendo so sorely needs right now.

Edited by Ryan Sartor
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