Nintendo's Imagined Success Is More Dangerous Than Their Current Failure

Posted: Jan 17 2014, 8:31am CST | by


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Nintendo's Imagined Success Is More Dangerous Than Their Current Failure
Photo Credit: Forbes

There’s big news today that Nintendo has drastically revised their fiscal year forecast of Wii U sales, cutting the prediction from 9 million to 2.8 million,  just a few months before the goal was supposed to have been met.

The big story isn’t that the Wii U is selling poorly. Everyone knows that. The big story is that everyone seemed to know that except Nintendo. The 9 million units forecast was made at the end of April in 2013. Despite obviously flagging Wii U sales, Nintendo was simply content to pray that the system would see a magical spike some time before the deadline. They had plenty of opportunities to revise the forecast over the course of the past year, a forecast everyone told them was absurd. They did not, and now the problem isn’t just the sales of their hardware and software, it’s that the company is starting to come across as delusional.

Nintendo has always been armored with an aura of infallibility. Their tradition of consistently making great games has carried them for over two decades now, and continues to this very day, with many of the best reviewed titles of the year being Nintendo games. Nintendo’s woes would be less tragic if the Wii U was an overtly terrible console with a complete absence of worthwhile games. But it isn’t, and the failure lies on Nintendo as a business entity, not on Nintendo as a game-maker.

The preposterous forecasts for the success of the Wii U in face of an endless string of facts that suggested otherwise makes them look silly and completely out of touch with the market. While it’s bad enough their new forecast is actually much lower than how many units were sold in the Wii U’s first year of release, it shows how badly they hallucinated their own success by predicting a final total that was nearly three times as much as the actual figures are likely to be.

Expecting a holiday spike is one thing, but thinking it would be enough to boost the Wii U anywhere close to that 9 million pipe dream is ludicrous, and joins a list of bad business decisions Nintendo has made regarding the launch of their console, including their entire marketing campaign for it which to this day still has people questioning with the Wii U is a new console or a peripheral.

VG247′s Matt Martin has a column up right now that says Nintendo’s Saturo Iwata should step down. After this news today, I’m inclined to agree.

“To wake up three months later and slash sales forecasts so dramatically it’s clear that where its own products are concerned, in Kyoto it has been a case of the blind leading the blind.”

The Wii U selling poorly is one issue, but not realizing just how badly it was selling or just completely pretending otherwise is completely inexcusable. Iwata’s decision to stick by those forecasts should be enough to make it hard for investors to trust him going forward. How can you misjudge your own console’s sales by 300%, this close to the final deadline? How wrong will you be with your next forecast, or the one after that?

Nintendo’s problem with imaginary success seeps into other aspects of its business as well. They stubbornly believe the way forward is constantly the same path it’s always been. They do little to attract 3rd party developers to the console, even as the time between their first party hits grows longer and longer. They outright refuse fans who have requested something like a fully-fledged Pokemon console game for more than a decade, saying that Pokemon should, and will always be, a success on handhelds only. Nintendo often seems to lack a proper perception of their own strengths and weaknesses, and that’s no more obvious than at present. “Nintendo knows best” no longer seems like an accurate statement or an adequate defense of their decisions.

The Wii U is in trouble barring a massive price cut and games that are worth shelling out $50 plus a $200 or more console for (also known as “system sellers”), a lofty proposition in the current market. Even the 3DS missed sales forecasts, as surprise, surprise, Nintendo expected a massive holiday boost that was too massive to actually come to fruition. Nintendo has some great games coming out in 2014, but are 3 or 4 solid titles enough to convince jaded players to pick up a Wii U? The casuals certainly aren’t coming back, as their Wiis have all been given to goodwill or are packed away in a closet somewhere. So that leaves active gamers who have to be persuaded to “upgrade” their PS3s or 360s to a just-as-powerful Wii U, or to buy a Wii U alongside their Xbox Ones and PS4s. As much as fans love Mario Kart and Smash Bros, even they may not have that power anymore.

It should have been the other way around. With the Wii U released a year earlier than its next-gen competition, the question should have been “can Sony and Microsoft convince gamers to buy a PS4 and One when they already own a Wii U?” But by November 2013, it was clear that Wii U skepticism led many to hold off until all three systems were out. Now, the Wii U has sold over 4 million units in a year and change while Sony’s PS4 has sold that in six weeks.

I’m going to stand by my controversial assessment that Nintendo’s best path forward is to focus only on software, the one thing they’re unfailingly good at, but with how entrenched they are in their ways, it feels like they’d rather die than release a game for another system. At this rate, without being able to see straight about their shortcomings, they just might.

Follow me on Twitter, subscribe to my Forbes feed, and pick up a copy of my sci-fi novel, The Last Exodus, and its sequel, The Exiled Earthborn.

Source: Forbes

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