Market Overview

Is the Wii U Game Onslaught Too Little, Too Late?

With every passing month, new reports suggest that Nintendo (OTC: NTDOY) may be unable to recover from the lackluster Wii U sales figures.

To be fair, three million units is nothing to sneer at. Startups and smaller corporations would be overjoyed to sell three million units of anything in three months.

That said, Nintendo is not a new company -- it is a multi-billion-dollar empire responsible for creating some of the biggest names in gaming. Without Nintendo, Mario, Zelda, Smash Bros., Star Fox, Metroid, Animal Crossing, Wii Sports and numerous other franchises would not exist.

From the beginning of Nintendo's game development initiative in the 1980s, the company has steadily introduced at least one innovative franchise with each new system it releases. These games often came within the three-month "launch window" -- that is, the three-month period following a console's release.

Nintendo Entertainment System: Super Mario Bros. Super NES: Pilotwings, F-Zero Nintendo 64: Wave Race 64 GameCube: Pikmin, Luigi's Mansion Nintendo Wii: Wii Sports Wii U: ???

Note: Duck Hunt was excluded from the list because it did not lead to a full franchise. Wave Race 64 was included because it did receive one sequel. Mario 64 was excluded because it was a sequel and not the start of a new franchise.

The question marks for Wii U are not a blank vacancy indicating that a great launch window franchise is still to come. The sad reality is that, for the first time in the company's history, Nintendo severely dropped the ball. Instead of bringing innovation to Wii U with a fresh concept, the company launched with a familiar classic (a 2D Mario game), a mini-game collection (Nintendoland) and a hodgepodge of third-party ports.

This was not the first time Nintendo disappointed consumers at launch. The company pulled a similar stunt when it released the Nintendo 3DS, a handheld system that launched without a single good game.

That, however, was a handheld. It is not as if the Game Boy started out as the perfect system. The original DS was an amazing piece of machinery, but its launch titles were merely decent. Nintendo made up for that in the first 12 months following the system's release.

Wii U is different. Wii U is a console. The standards and expectations were much higher. Thus far, Nintendo has not delivered what consumers want, which is why the console is readily available at GameStop (NYSE: GME), Best Buy (NYSE: BBY) and dozens of other retailers across America.

Nintendo may have assumed that if it announced a plethora of big games, consumers would come running. Thus far, no one seems to care.

This year Nintendo said that it will release a new 3D Mario game for Wii U and a remake of The Legend of Zelda: The Wind Waker. Nintendo also unveiled a clever Yoshi game that uses the amazing art style introduced in Kirby's Epic Yarn. New Smash Bros. and Mario Kart games will be unveiled at the 2013 Electronic Entertainment Expo, but their release dates have not been finalized.

Fire Emblem X Shin Megami Tensei, an unusual crossover between the Fire Emblem and Shin Megami Tensei franchises, also sounds very promising.

To be clear, most of these are the very games that consumers were looking for when Wii U was released. They are the games that, had they accompanied Wii U at launch, would have likely helped the console sell better.

None of these games will be released during the first or second quarter, which means consumers will have a long time to wait before the best games arrive. Pikmin 3, one of the few highlights of Wii U's presentation during E3 2012, was delayed twice. First, it was supposed to be a "launch window" game. Then Nintendo said it would arrive in March. Now it might arrive by May, if consumers are really, really lucky.

This is not a good sign for a company that desperately needs to release a large number of high-quality games. Without them, Wii U will continue to fail at retail.

The proof is in Nintendo's own success. The original Wii had several great games at launch and many more released within the first 18 months of the system's release. This helped propel Wii to mainstream success.

Wii U does not yet have the ability to imitate that success. Despite the many games that Nintendo has announced thus far, the company has yet to introduce a new and innovative franchise that compels consumers.

Some will argue that Nintendo will have plenty more to show at E3 2013, which may be true. However, previous press events at E3 2009, 2010, 2011 and 2012 suggest otherwise.

For better or worse, Nintendo is a stubborn company. It is, in many ways, the game industry's version of Apple (NASDAQ: AAPL). Thus, it is best for investors to leave wishful thinking out of their Nintendo game predictions.

Follow me @LouisBedigianBZ

Posted-In: Nintendo Wii UTech Best of Benzinga

 

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