Email: Wii U could outsell Wii

Hi Sean,

while most people think the Wii U will flop and will never be able to outsell the Wii I think otherwise.

Of course the Wii U will not sell 95 mio. But what Nintendo does sell is not the former Wii. It is an abandoned console that got disrupted by the Osborne effect because of premature announcement of the Wii U. It is against this situation we have to judge the Wii U. Considering the low margins on the Wii now even lifetime sales of 40 mio will be much better than the current situation.

The second issue is that the Wii U may be the console Nintendo recaptures the Japanese market with. The Japanese market is unique because according to demographics (echo boom) it is probably the only major market not facing head- but tailwinds over the next 5-10 years. It is considered rude to block the screen with gaming so the Wii U will have a very strong argument. Console gaming is disrupted by handhelds so the Wii U is a defensive reaction against the PSP/Vita while the 3DS attacks from below. If Nintendo could capture the 30-35 mio console potential in Japan for the next generation it would help profitability much more then the same sales elsewhere.

Today I have been to a retail outlet and was shocked by the console prices:
Wii Euro 149,-
PS3 Euro 333,- with Move bundled
XBox 360 250 GB Euro 249,-
That means the Wii U will not seem expensive at all at Euro 299,- and maybe it would even be a wise move to price it at 349,-?

The problem Microsoft and Sony have is that the Wii U will bring down their current business (selling consoles from the stone age at still high prices) as well as their new one (new consoles with only slightly higher spec than Wii U at considerably higher prices).

Then I have a final question about Onlive/Gaikai… Aside from technical aspects cloud based gaming could mean a return of the arcades right on our TVs. Cloud based means we will not pay for owning the games (consoles = playing and OWNING games) but only for playing. If I pay and a game and it is not fun immediately – bang. Out. Next one. Same as back in the old days in the arcades. What do you think about cloud based gaming?

I make fun of cloud based gaming by linking it to Up, Up and Away. Game Industry spends more time hyping ‘next big trends’ instead of just making good games.

I don’t think any game console will outsell its predecessor due to the macro economic issues.

What is most curious is what are Nintendo’s expectations of the Wii U. Internally, they have goals. Iwata shared to us the Wii’s goals which were “Sell more than Gamecube or it is considered a failure.” From what I can detect, Nintendo will consider the Wii U a failure if it has the same problems as the 3DS. Nintendo has to sell the 3DS at a hardware loss because of the lack of value in the system.

Maybe a reader with a more careful eye has noticed what Nintendo expects as success and failure of the Wii U. The above is my guess. I can assure you they don’t expect it to sell like the Wii in great part due to the macro economic conditions. And so do the game analysts, in private, when they make their reports to investors. (But shhh, you didn’t hear that from me.)