Market Overview

No Legwork Wednesday – Nintendo's Wii U

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Video game consoles have been part of American culture since the 1980s.

Over the years, many different console manufacturers have come and gone, including Sega and Atari. Despite the fluctuations in the market, one company has continued to feed the American public’s need for the latest in video game technology: Nintendo (OTC: NTDOY).

With iterations such as the NES, Super Nintendo, Nintendo 64, Game Cube and Wii, the company has had a string of undeniable hits. So when Nintendo announced that it would launch a revolutionary next-generation gaming system in 2012, everyone took notice.

In retrospect, however, it seems that the company should have done more legwork.

Related Link: Hints That 2015 Is The Swan Song For Nintendo's Wii U

The video game industry has become increasingly competitive over the past decade, with the Sony PlayStation series and the Microsoft Xbox series gobbling up market share. Nintendo has traditionally focused its gaming systems on the younger market, avoiding much of the head to head competition that the other major manufacturers engage in.

After the success of the Nintendo Wii, which was launched in November 2006, the video game landscape changed dramatically.

The rise of the iPhone, Android cell phones and various tablets all ushered in a new era of gaming. With the newly available options, people who were interested in playing games that did not require massive processing power or advanced graphics (i.e., children’s games and casual games) were able to find many low-cost or no-cost options on their phones.

For its newest console, Nintendo would have to do something revolutionary.

The follow up to the Wii, titled the Wii U, was released in November 2012. One of the first aspects of the console to call the public’s attention was the revolutionary design of the controller. It featured a small screen in the middle - much like the kind found on so many smartphone screens.

Though the console was launched to much fanfare, even Nintendo admitted that it had been a flop in January 2014, just 14 months after its launch.

So, why did the Wii U flop? Here are some theories:

  • Poor Market Positioning – As previously stated, many casual gamers had found that they could get their gaming fix by playing free or low-cost games on their cell phones and tablets. The Wii U was meant to be a follow-up to the Wii, which was a casual gaming console, and many felt that they did not need to invest the several hundred dollars and purchase a console that does the same thing they can already do for almost no cost on their phones.
  • The New Controller – Consumers did not know what to make of the console’s new controller. The company did a poor job of educating the public on what the new controller was supposed to be and how it would enhance the gaming experience.
  • Lack Of “Must Have” Launch Titles – Nintendo has yet to convincingly offer a next generation Zelda title. Considering the fact that Zelda is one of the company’s flagship titles, this absence is telling. The company also has yet to release any major new Metroid, Donkey Kong or Star Fox titles. These absences are leaving die-hard Nintendo fans out in the cold.

Posted-In: Microsoft Sony video games Wii UJim Cramer Tech Best of Benzinga

 

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