Analyst Doesn’t Believe Wii U Will Ever Catch Up With PlayStation 4 And Xbox One

Ed Barton, a video games industry analyst at Ovum consultancy, has told the BBC that he doesn’t hold any hope of the Wii U catching up with the PlayStation 4 and Xbox One in terms of sales. Barton acknowledges that the company has some great games in the pipeline but is unconvinced that they will make consumers invest in Wii U.

“They have a relatively good games pipeline, but the big question is about its hardware.”

“The Wii U is so far behind now, and the perception of the audience that it’s a relatively under-powered console compared to the PlayStation 4 and Xbox One is now pretty firmly cemented.”

“Given how inaccurate some of Nintendo’s forecasts have been going into their results in terms of hardware and software sales in the past, I’m not optimistic.”

Analyst David Gibson Projects That Nintendo Won’t Quit Hardware

David Gibson, Senior Analyst and Regional Head of Software & Services at Macquarie Research Japan, has told CNBC that despite Nintendo’s current struggles he very much doubts that Nintendo will exit the hardware business. Instead Gibson thinks that Nintendo will focus on opening up its own platform for developers.

CNBC Host:
And remember, as Kari was highlighting to us, plenty of earnings on tap this week: Nintendo will reveal the magnitude of their troubles with their full year earnings due out Wednesday. At least, given the sizable setback that we see on the Nikkei, Nintendo quite fairly resilient we should say, down only just by a third of 1% (-0.29%). The company has warned it is headed for its third consecutive annual loss, weighed down by weak Wii U sales. Nintendo slashed its Wii U [yearly] sales forecast by almost 70% to 2.8 million units for the year [April 2013 – March 2014]. This is [after] rivals Sony and Microsoft racked up huge sales last year for the PlayStation 4 and Xbox One since their launches in November. Let’s get straight out to Tokyo, just next to Kari is David Gibson, senior analyst and regional head of Software & Services at Macquarie Research Japan, and remember our guest host for the hour Wong Sui Jau, General Manager of Fundsupermart.com. David, very nice to see you again. So, is this a case for Nintendo where it’s no longer really about the Dollar / Yen story, it’s just that they just don’t have the right strategies in place, and there’s not much that Super Mario can do?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
That’s right. They’ve been getting beaten like Nokia has been by Apple, by Samsung, Google Play, and that’s a real challenge for them, for you and I as consumers. You know, we buy our smartphones and tablets and we have a whole plethora of options that are free to play, that sort of thing isn’t viable on the Nintendo platforms. So, obviously though, as she said, they have great brands, which they still need to try and monetize, but we do think there are some things they can do. But it’s not going to be the hope that some would that they’ll exit hardware. We think that remains off the agenda in this stage in this strategy session coming up this week.

CNBC Host:
Yeah is it just simply too late to get in on the whole mobile sphere, because that’s where everything is going whether you look at one company or another’s earnings, it’s all about how quickly and efficiently they have that strategy worked out.

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Yeah, that’s right. Iwata-san the president has had a smartphone, had an iPhone for many years, and a Mac laptop when he presents—so he’s known about the threat. But really, I think he’s misunderstood the pricing difference that free-to-play really does dominate now globally for mobile games. His angle is “We provide quality and hence people pay upfront,” but look, you know, we’ve all got alternatives, we’ve got alternatives for our entertainment now, and they look much less competitive. So, what we think the option for him is a simple one…is that…he might try and copy the store rather than join them, he might actually do what they are doing and open up his own platform for developers. It’s very difficult now for anyone now to sign up for an individual developer like you can with Apple…you know, it’s very simple cost. We think Nintendo might actually open it up themselves, which means you’d be able to get Clash of Clans and Puzzles & Dragons on the Nintendo platform, but also get Mario as well. And that’s their potential strategy…we see it potentially announced on Thursday.

CNBC Host 2:
Hi David, sitting next to Chloe in Singapore. You know, I’m not a gaming expert, but just curious…you know, the market seems to be discriminating against Nintendo, and criticizing it for not moving “with the cheese,” so to speak…and making its games more readily available on these mobile devices…but what about all of the other competitors?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Do you mean from the Mario brands, I’m presuming that’s what you mean?

CNBC Host 2:
Yes, talking about the Sonys of this world, and also the Microsoft Xbox…are all their games available on these mobile devices?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Tend to be both have a strategy, yes. PlayStation and Xbox Glass, definitely they’re putting their titles on other platforms and making them…the main PS4 and the main Xbox One games made by each other are not on other platforms, but generally speaking yes they are doing mobile as well. But relying on the installbase of smartphones and tablets, that’s their leverage play, not as hardware manufacturers on portables, as Nintendo has intended to do.

CNBC Host 2:
Ah, okay. What is the best way forward for Nintendo? I mean, we’re talking about what happened to Sega of course in the old days and dumping their console device, is that the path that would be best for Nintendo in this console environment?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
You know, long term it probably is, but I think we’re a year or two before that ever gets considered. In the meantime he’s going to try and fix what they have. The reality is, the 3DS—yes the Wii U has been a disaster—but the 3DS has not so far. Even though they cut their numbers, software sales in North America are up 45% year-on-year, hardware sales are up 15%, you know, he’s actually getting growth out of that for the moment. Not huge growth like we see on smartphones, that says to me, to him and the market that we gonna stick with our strategy and try and make ourselves more relevant to smartphones…and I think that’s going to be a challenge.

CNBC Host 2:
I wonder…in the old days, so to speak (I’m only talking about 5 years ago), people used to say “Well, to stay one head of the game, you’ve really got to come up with new games and new software to keep these gamers interested.” In terms of the competition, does Nintendo have that right? Is it at all about the types of games they’re coming out with to attract this certain audience?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
It’s a good question. I think they’ve traditionally made a real mix of titles, and what I mean by that is the titles that are attractive to everybody, not only to the core gamer but also the more casual user, using the brands of Mario. I think the challenge then is that now, that as more casual users in particular—the Wii audience for example—we’ve all got smartphones and tablets now and we’re playing other games, and I think that’s their challenge. It’s just our time is going elsewhere. And so he’s got the good brands but not as relevant from a pricing point of view…but engagement and experience? Definitely. They’ve introduced lots of innovations to the games market over the last decade or two. So you’re right, they need to do some more innovation basically and they need to come out and surprise us basically on their games and also maybe even new hardware going forward.

CNBC Host:
Yeah, a lot of homework to do it seems like over there…certainly the element of surprise has been lacking on that front. Thank you so much for that. Always nice to hear your thoughts. David Gibson of Macquarie Research Japan.

Analyst Predicts Nintendo Will Lower Wii U Sales Forecast Again

An analyst has predicted that Nintendo will once again lower its Wii U sales forecast. Although the company expects to sell nine million Wii U consoles by the end of its 2014 fiscal year, research analyst David Gibson says he thinks that figure will be lowered to 4.3 million, even though Super Mario 3D World – which was released toward the end of November – probably helped drive Wii U sales in December.

Analyst Predicts PS4 Will Likely Outsell Wii U By Summer

Michael Pachter has predicted that the PlayStation 4 will likely outsell the Wii U by the summer. The Wedbush Securities analyst is adamant that Sony’s latest system – which launched in November 2013 – will surpass the Wii U console’s lifetime sales in 2014. Pachter previously said that he thinks Wii U will sell less than 20 million units by 2016.

Pachter: Sony’s and Microsoft’s New Consoles To Thrive, Wii U To Sell Under 20 Million By 2016

Online gaming publication Kotaku has enlisted the help of famed industry analyst Michael Pachter to analyse the fortunes of the Xbox One, PlayStation 4 and Wii U. Pachter sent the following email to a variety of investors, reporters and other members of the video game industry. He expects that Sony will sell 37.7 million PS4 consoles and Microsoft will sell 29 million Xbox One consoles by year-end 2016. However, Pachter expects Wii U sales to be under 20 million by 2016.

  • We expect Sony’s and Microsoft’s new consoles to thrive over the next three years, with cumulative worldwide sales of 37.7 million PS4 and 29 million Xbox One consoles by year-end 2016. We do not expect Nintendo’s Wii U to fare as well, with cumulative sales of under 20 million by 2016.
  • Our overall forecast is based upon several assumptions: first, we expect console prices to decline only modestly over the next three years, with PS4 pricing in the U.S. dropping from $399.99 at launch to $299.99 by 2016 and with Xbox One pricing in the U.S. dropping from $499.99 at launch to $349.99 by 2016; second, we expect new release software pricing to remain at $59.99 in the U.S. for the next three years; finally, we expect Nintendo to continue producing the Wii U. Should any of these assumptions prove to be incorrect, hardware and software sales will be affected, and it is highly likely that the ultimate results will differ significantly from our forecast.P

Thanks, Anony-Mouse

Analyst Says Wii U Hurt By Retailer Confusion And Misinformation

wii_u_gamepad_up_close

Christine Arrington, the Senior Games Analyst at IHS Electronics & Media, says that it’s partially uninformed retailers to blame for the Wii U confusion. Benzinga said that she realized that the Wii U was in trouble when she became an unofficial secret shopper. Benzinga said that if you went into a retailer and you talked to somebody in the games department, they didn’t even understand what it was. This comes despite the news that Nintendo doesn’t think that the name of the console is a real issue.

“If you went into a retailer and you talked to somebody in the games department, they didn’t even understand what it was. “I’m standing there, looking at them, going, ‘Wow! I think that right there was an anecdotal piece of evidence [showing] that people didn’t get it.”

“There should have been a Wii Sports-type game that let everybody get it. Those huge franchises would have gotten the loyal Nintendo person, but it was Wii Sports that got all the people outside the Nintendo world to look and say, ‘This is a really, really neat, fun thing to do. I think it would have definitely fallen below Wii. I think there was something really special about the Wii and the way that whole thing happened that they didn’t even know was going to happen.”

Thanks, Rich

 

Analyst Predicts Animal Crossing: New Leaf Sales Hit 500,000 In US

animal_crossing_new_leaf_box_art_north_america

According to a note released from analyst Doug Creutz of Cowen & Company, Animal Crossing: New Leaf sold through 500,000 copies in June in the U.S. The NPD Group is expected to soon release sales data for June, which should reveal the official number of how many units the game had sold during last month. Animal Crossing: New Leaf, which was released on June 9th in North America, is available at both retail and the Nintendo eShop for Nintendo 3DS.