Armchair Analysis Midterms: Nintendo
This is the second in a series of three columns that will discuss console hardware sales and trends for the first half of 2011 and will also offer predictions and things to watch for in the second of the year. Please bear in mind that this discussion revolves around NPD sales figures, covering sales in the United States only.
The Nintendo Wii has had a tremendous run in this console generation, selling over 35 million units since its debut in late 2006. It was the cheapest video game platform and the introduction of motion controls gave consumers new ways to play video games. Unfortunately for Nintendo, the period of Wii domination is clearly over here in 2011. Year on year (YOY) trends have generally been down, and the combination of hardware saturation, the age of the hardware and its disadvantages, and lower pricing of its console competition have all played at least a supporting role.
It's fair to argue that the Wii is a "lame duck" console at this point in time. While Nintendo does have a couple of bullets left in its holster-- including one silver bullet called The Legend of Zelda: Skyward Sword-- the declining sales trend for the Wii that we've seen so far in 2011 doesn't show many signs of reversing.
Let's take a look at the sales data (and YOY comparisons, as they were made available):
January 2011: 319,000 units sold (-32% YOY)
February 2011: 454,000 units sold (+14% YOY)
March 2011: 290,000 units sold (NO COMPARISON AVAILABLE)
April 2011: 172,000 units sold (-38% YOY)
May 2011: 236,000 units sold (NO COMPARISON AVAILABLE)
Analysis:
The Wii has been chasing the Xbox 360 all year long for the top spot on the console sales charts, and hasn't been able to catch up. Two of the three YOY comparisons above are significant declines, and moving only 172,000 units in a month for the Wii was eye-opening for April. It finished in last place for that month and was the only platform to register a negative YOY comparison. March had looked impressive at first glance, but that 290,000 figure was surpassed by both the Xbox 360 and the PlayStation 3 in that month.
Much of the blame for these weak results can also be pointed at a lack of quality new software releases. First-party support for the Wii has been nearly non-existent for the first half of 2011. Mario Sports Mix was a quiet release in Q1, and the jury is still out on a replay of success for Wii Play with the release of Wii Play Motion in the month of June. That's been it, really. Many third-party releases have been movie or TV-licensed cash grabs. Older releases from Q4 2010 like Just Dance 2 and Zumba Fitness have been charting on the software sales charts with consistency, but there hasn't been anything to pull consumers back towards the Wii.
A price cut to $140 for the Wii in May did equate to at least some temporary success, as sales improved by over 60,000 units from the month prior and it finished second, ahead of the PlayStation 3 by nearly 60,000 units and behind the Xbox 360 by a smaller margin of 34,000 units. Nintendo also launched a Greatest Hits line of re-released software under the Wii Select banner which helped to draw attention to the platform. We will see if the drop fuels further momentum for the Wii when June sales results are posted in a couple of weeks.
Nintendo has been able to get a lot of mileage out of the Wii, but it's hard to give them a good grade for this midterm. If Nintendo wanted to try and improve sales, there would have been more software and a bit more dedication. I grant that the company was busy with the 3DS, which continues to stumble three months after launch, but better planning and effort were needed here to keep sales moving at a good clip.
Armchair Analyst Midterm Grade: C-
Predictions:
The new lower price point for the Wii may continue to add some sales in the short term, but as Sony and Microsoft will likely move to cut prices later this year, it won't be enough to continue mounting much of a challenge. It's unlikely that Nintendo will move to lower prices again before the end of the year for the Wii, although a new bundle may not be out of the question.
Nintendo looks to have The Legend of Zelda: Skyward Sword just about ready. It should hit sometime in Q4, but that title runs into an avalanche of other releases for the Xbox 360 and PlayStation 3 that at least somewhat diminish its impact. If it hits in November, as expected, it goes head to head with The Elder Scrolls V: Skyrim on the RPG front... plus Modern Warfare 3, Assassin's Creed: Revelations, Uncharted 3, and residual sales of Battlefield 3. The big question lies with whether or not the Zelda IP has the power to move more hardware and make a significant impact on the sales charts. The initial reaction is no, but software sales of the game should be impressive with the installed userbase as large as it is.
Skyward Sword isn't the only arrow left in Nintendo's Wii software quiver. A new Kirby game is in the works as well as Mario Party 9. Both games have the Wii's family demographic squarely in mind. Mario Party 9, at least at first glance, will have more selling power given the familiarity of the series with consumers along with having the Mario IP to build from. If Nintendo can get Mario Party 9 to arrive for Q4, it would certainly help Nintendo's chances of success. While releases like Skyward Sword and Mario Party 9 will help keep the Wii afloat, Nintendo's surprising decision to keep denying localized releases of RPGs like Xenoblade and The Last Story is a poor one. It weakens ties between Nintendo and the core gaming consumer that the company wishes to attempt to win back and it could come back to haunt them when it seeks what could be a steep asking price for the Wii U when it launches next year.
Hardware sales should be steady or show minor declines through the rest of Q3 before rebounding some in Q4. The Wii's days of sitting atop the hardware sales charts are over and the Xbox 360 will remain ahead of the Wii for the balance of 2011. A more interesting battle may occur for second place behind Microsoft, however. Sony and Nintendo could be pitting exclusive against exclusive in Q4 and the gap between the two platforms in terms of sales may be slim.
Your questions, comments, and predictions are always welcome; please feel free to comment below. The final installment of the Armchair Analysis Midterms will be up soon, as Sony receives its grade, analysis, and predictions.
