Nintendo's Wii U: market performance and strategic analysis

Wii U. Case Study

The Wii U. is a perfect example of Nintendo making the same general mistakes and encountering the same successes as they have in the past. While Nintendo has always been in the mix when it comes to the game station rivalries, they are rarely the ones that are leading the pack. Indeed, the Xbox 360 and Sony PlayStation are probably the winners in terms of all-time gaming systems after Nintendo did quite well with the original 8-bit NES and the 16-bit SNES. This case study will look at what Nintendo is doing wrong and what they could be doing right instead.

Nintendo was very much on the forefront of gaming in their early days. Even today, they do make a lot of money with relatively few people as compared to the total revenue. However, there are two answers and replies to those facts. First of all, Nintendo has been playing catchup and coming up short since then. Second of all, Sony and Microsoft have many proverbial irons in the fire besides gaming systems. For example, Sony is heavily involved in anything from making movies to video games and other consumer electronics like Blu-Ray players and so forth. Similarly, Microsoft has its dominant Windows operating system and they also make productivity software like Microsoft Office and so forth. As such, the boasts about revenue are not all that glowing when considering that. As far as playing catch, Nintendo has put out some glowing game-playing units but they always show up late to the dance or they do not go far enough. While some may think the Wii should not be included when making that statement, the author of this report would indeed go that far (N4G, 2015).

The Wii was a great and revolutionary gaming unit. It sold a lot of units and had a lot of good games. However, one thing that was glaring about the Wii is that it was not a "high definition" device and having to use a controller in one's hand for any motion game can be a good thing or a bad thing. It makes sense when playing tennis or wielding a sword. However, it would make less sense when wanting to do a dancing game where a controller is an unnecessary appendage. Indeed, Microsoft covered both of those inadequacies through the graphics on the Xbox 360 and the fact that the Kinect remote allowed one to simply use one's body as a controller. For example, a dancing game on the Kinect was a lot easier and less unwieldy than it would be for the Wii or the Sony wand, although Sony had its own success with using the Eye which was much like the Kinect sensor (U.S. Gamer, 2014).

One might say that the Wii U. was a "correction" to what was not done completely (if at all) when the original Wii came out. The problem is that not a lot of people were clamoring for a new Nintendo product given that it seemed to be an incremental and "corrective" update to what the Wii was rather than it being a brand new unit. It boggles the mind as to what could have been had Nintendo released the Wii U. instead of the original Wii. True, it may have delayed the release a little bit but it is also clear that the Sony and Microsoft offerings were far superior in terms of graphics and they both handled the controller-in-the-hand issue that Wii also did not address (U.S. Gamer, 2014).

Nintendo has also made miscues when it comes to the discs or cartridges that are used for their devices. In the olden days of video game lore, it was commonplace to have a cartridge rather than a CD or DVD disc. However, when CD's and DVD's become extensively cheap to manufacture and distribute, they became the norm when it came for Sony and Microsoft devices. Further, Sony had the advantage of bundling its Blu-Ray disc-playing device with the PlayStation. Even when Nintendo came around and starting doing discs, they still did not have a player that could play Blu-Rays. However, actually delivering on that would be an issue since Sony is the owner of the technology) and it was proprietary in nature. On the other hand, it would not be out of the ordinary to see a Microsoft device play a Blu-Ray, although the 360 did not and does not do so. Once again, Nintendo was doing something right but they were not doing it at the right time (Xbox, 2015).

Indeed, customers want some "bang for their buck" when it comes to a new gaming console. If there is not a marked increase in processing power or gaming utility, then people will probably stay away. On the other hand, if Nintendo made the Wii upgradeable and people could add the new technology that is now available on the Wii U, then they probably would have gotten somewhere. For example, people that originally bought the Xbox 360 without the Kinect could always add it later as the Kinect simply used a USB port that was already present on the device. On the other hand, Nintendo had to make a whole new console and the basic and regular sales version of the console did not include the new gadgets. Once again, Nintendo was doing some things right but not in a way that moved units for their consoles or their games.

The above is easily reflected on their sales figures. In looking at 2009 through 2013, it is clear that Nintendo realized some major profits and good outcomes when it came to the Wii coming to pass. However, the good news and good sales figures seemed to fall away once Sony PlayStation 3 and the Xbox 360 came to pass. At the time of writing this report, the same has probably continued with the updates that have happened since then including the Sony PlayStation 4 and the Xbox One. To be sure, if Nintendo wants to return to where it was in 2010 and 2011, they are going to have to sizeable and majorly change the gaming market once again and it remains to be seen what the next game-changer will be when it comes to the gaming market.