“This holiday season Nintendo faces a critical test with its Wii U video game console that is pitted against Sony’s PlayStation 4 and Microsoft’s Xbox One as it seeks to revive flagging sales,” Yuriko Nagano reports for The Associated Press. “Should lackluster sales persist, the company which shot to prominence in the 1980s with Family Computer consoles and Game Boy portables might be forced to reconsider the core of its business strategy.”
“Nintendo’s business, long associated with the hit Super Mario, Donkey Kong and Pokemon games, has been shaken in recent years as more people play games on their smartphone and tablets. So far Nintendo has been steadfast in its refusal to adapt games for those devices,” Nagano reports. “The company reported an 8 billion yen ($81 million) loss for the three months ended Sept. 30. Quarterly Wii U sales nearly doubled to 300,000 units from 160,000 in the previous three months, but cumulative sales remained far short of the company’s goal of 9 million units for the financial year ending March 2014.”
“Since Sept., the Wii U’s recommended retail price has been reduced to $299.99 for the 32-gigabyte model in the U.S. It was $349.99 when it debuted in November last year,” Nagano reports. “Another price cut is a strong possibility for the Wii U if sales stay sluggish, said Sato, the Toyo Securities analyst. Nintendo has 460 billion yen in cash ($4.4 billion) and is prepared to survive a bad sales year or two, he said.”
“Still, some say it’s time for Nintendo to change rather than take comfort in its big cash pile,” Nagano reports. “‘Nintendo should broaden its revenue stream in order to grow,’ said Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities. Nintendo has strong software, with hit titles like Super Mario and Zelda, so it may be prudent to make that content mobile while preserving Nintendo’s style, he said.”
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