It is no secret that the Wii U console has had sales difficulties since its launch, the console has sold 3.4 million units worldwide as of March 31, according to Nintendo the slow adoption rate is the result of a lack of major AAA titles for the console and a lack of success in communicating the novelty of the platform.
EA Backs Out
But according to EA Senior Software Engineer Bob Summerwill the console has a major problem that has not been addressed yet, Mr. Summerwill is certain that “The Wii U is crap” it is important to note that Mr. Summerwill’s thesis was released through twitter therefore it had to be limited to 150 characters which is why it had to be succinct.
“Less powerful than an Xbox 360. Poor online/store. Weird tablet. Nintendo are walking dead at this point.”
The comment came in the wake of the confirmation that EA has no games in development for the Wii U, which will result in a dire future for Nintendo’s earnings report if the AAA title problem is not sorted out quickly.
EA’s decision may seem fickle since the publisher released several titles during the early days of the platform’s life cycle. Titles like Mass Effect 3, Need for Speed and FIFA were part of a promise to support the console. However, commercial results for titles like FIFA were disappointing and EA is now moving away from the drowning console.
Nintendo intents to reduce its manufacturing costs and is aiming to release first-party titles more frequently to spur future sales, however industry analyst Michael Pachter has stated that not even a price cut would help the struggling console.
So, let’s take a look at the numbers shall we? Wedbush Analyst Michael Pachter calculated 55.000 Wii U units sold in April, 19% lower than the sales from March, Leaked numbers from the NPD’s report on hardware sales suggest that Wii U sold 67.000 units from March 3 through April 6. To put the numbers in context Microsoft sold 205,000 Xbox 360 units, Sony reached 165.000 units and 3DS snagged 185.000 units.
So far, Nintendo’s “New” console is selling 28% slower than the Gamecube did in 2001, and 50% slower than the Nintendo 64.
The Results Are Worrisome
Most analysts were waiting for the console to gain momentum but the slow adoption rate and the lack of third-party titles have hindered sales to such an extent that the Wii U is in severe trouble; and now EA is abandoning the console, what does that mean?
Well, Consoles manufacturers operate under a very distinct business model, most of them sell consoles at a loss to alter the relative price of the console and be commercially competitive in the marketplace, this practice is very important since the transition period and the adoption rate can be highly influenced by the price of the console. However, content is even more important. This is a case where adoption rate depends on price but also on games. What games can you play on this console? How many different games can you play? Are there any exclusive games? Does the console feature AAA titles, successful franchises or indie games? All these variables affect the adoption rate of the console which is why an early partnership with a major publisher is so important. Games are also important because they are the source of revenue for the manufacturer; this revenue comes in the form of software purchases (video games) and licensing fees that allow developers to create games for said console.
The Wii U had a strong partnership with EA, but now the partnership is over and the fledgling console is in trouble. The situation that this console faces is quite tricky, it’s kind of a loop, few people buy the console because of the lack of content, but there are no third-party developers interested in the console because no one is buying it. If no one buys the console then it’s impossible to capture market share and without a decent market share no development company will bother to adapt their games to the console. That is why the initial partnership is so important it is the kick in the buttocks that the console needs to start moving.
What Will Become of Us
The fact that EA is not working on any titles for Wii U means no Battlefield, no Star Wars games, no FIFA. That’s a serious problem and if Nintendo wants to keep the console afloat they better start doing something because from June until the end of the year all eyes are going to be on the next-gen consoles and the battle for the living room, and guess what? Retailers want a piece of the action too, they are going to start clearing shelves for the new consoles and the Wii U is going to be utterly forgotten.
It’s all about software sales and this could be GG for the Wii U, only time will tell. I wouldn’t be surprised if Nintendo stops production. But there is hope, Activision or Ubisoft could create content for the console and spur sales.