Revealed!! What Nintendo’s poor Wii U sales will mean for gaming deals in 2014
If you haven’t heard, Nintendo had to aggressively slash sales projections by nearly 70 percent after a slow holiday season of Wii U sales. Despite the $50 price cut during late 2013, Nintendo is projecting sales of 2.8 million Wii U consoles for the 12-month period between April 2013 and March 2014. That’s down from a previous projection of 9 million consoles. It also pales in comparison to the 4 million Sony PlayStation 4 consoles and 3 million Xbox One consoles sold in the past two months.
Does this mean Nintendo is on the ropes? Long answer: Nope. Short answer: No. Here’s why:
- Nintendo is an extremely solvent company with nearly 10 billion dollars in the bank, half in cash assets and half in bonds. The projected operating loss of $205 million is a drop in the bucket for the company and is typical of the gaming console hardware cycles that have occurred over the last 25 years.
- While 3DS sales also dropped, it’s still the dominant, standalone handheld gaming device. Nintendo is projecting sales of more than 13 million 3DS devices over the same 12-month period, a figure that’s probably 4x to 5x the number of Sony PlayStation Vita devices sold.
Of course, there are definitely a handful of reasons why this will be good for gaming deals in 2014. Here are a few 2014 predictions:
- Nintendo has no choice but to get more aggressive on the Wii U pricing structure and bundling options. While Nintendo didn’t have to cut the price on the first Wii for three years in North America due to gangbuster sales, the Wii U has much more in common with the Gamecube and N64 in regards to popularity. Historically, the Gamecube was cut to 50% of the original price in less than two years and the N64 got a 35% cut in the same time period. If history is any indication, the Wii U will hit a sweet spot around $199 before holiday 2014.
- Nintendo has promised to “shake up management” and “think about a new business structure.” Hypothetically, this could lead Nintendo down the path of more mobile device integration (thus opening up the possibility of less expensive Nintendo games on smartphones) or branching out by developing multi-console releases of popular Nintendo titles. The latter is an extreme long shot (like 0.01%), but one that’s always delighted the imagination of PlayStation and Xbox devotees.
- The starting MSRP for Wii U games will likely fall to the $50 price point (from $60) due to lagging software sales as well as the ever-prevailing view that the PlayStation 4 and Xbox One are much more powerful than the Wii U hardware. This will mean retailer sales could hit at the $40 to $45 price point at launch and offer more aggressive discounts during the 2014 holiday season at a $25 to $30 price point.
While it’s possible that we will see all of these things happening by the E3 Expo (June 2014), it’s more likely that major pricing announcements and aggressive cuts will hit around the time of the Toyko Game Show (September 2014). In any case, anyone who’s been waiting to pick up a Wii U should be delighted with the deals. Be sure to check Ben’s deal feed for up-to-the-second deals on Wii U hardware and software.