While I don’t think this chart is very useful, it is a visual exclamation mark that something is amiss. There has been a fundamental change in the consumer’s relationship to spending.
Notice how the personal spending is getting flatter? Any increase in income is offset by the rampant rise of inflation. The U.S. consumers are now saving more and spending less money.
We are in a Depression Climate. The 8th Generation will not perform like the 7th Generation not because of ‘iPads’ and ‘smartphones’ but because there is LESS MONEY in consumers’ hands.
“What is the probability of the Wii U performing like the Wii?” I’d say 0%. The macro environment of 2012 is entirely different from 2006.
This doesn’t mean that the macro environment will not improve. But first, it will decrease even further with a very large rise in taxes starting in January 2013 (as well as the increased costs due to the American health care law which does affect every American business). Capital is not being moved because investors are not stupid. Consumers are holding onto their money at the moment.
No one at Nintendo knows how to sell in a Depression Environment. Seniority will do no one any good. Shigeru Miyamoto doesn’t know how to sell video games in a Depression Environment. Not even Hiroshi Yamauchi knows such an environment.
Actually, I’m wrong. There is a depressed market Nintendo learned to sell. It would be recession soaked Japan. There was also the issue of Japan’s population growing older on average. Nintendo’s approach to this was the ‘New Market’ approach of the DS and Wii which was very successful.
Ironically, this will have to be the approach for Nintendo in the Western markets as well. With the Core Market imploding, the only stability will be in the growing New Market.
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