17 replies to this topic

[Blade of Dyna]

 

Analyst forecasts yet another bad month of sales in the US for Nintendo's console and says even a price cut wouldn't be enough to help

Nintendo of America

The NPD Group will report its US video game retail data this Thursday, and in a preview note Wedbush Securities analyst Michael Pachter commented that he's expecting Nintendo to post yet another weak month of Wii U sales. For the Wii U's fifth month on the market, he's forecasting that Nintendo sold just 55,000 units, which would represent a 17 percent decline month-over-month. Moreover, Pachter's expecting this slide to continue for Wii U, even if Nintendo chooses to implement a price cut.

"The only key hardware device to underperform our expectations was the Wii U," Pachter said of last month's numbers, "and its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console. We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."

And if the pricing on the PS4 and next Xbox is reasonable, it could really put Wii U in a bind, Pachter added: "Should the new consoles from Sony and Microsoft be price competitive, we think that Wii U sales may continue to stagnate." In fact, Pachter believes that next-gen consoles are likely to be subsidized and will therefore look even more affordable to consumers.

"We think that the next-generation consoles will perform a wide range of multimedia functions. We should learn more in the coming months, but we expect the next Xbox to have an IPTV tuner that will allow an MSO to deliver services over the Internet outside of the MSO's regulated geographic boundaries. If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model). If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history," he said.

As for March retail game sales overall, Pachter expects the numbers to be up slightly (just one percent) thanks to big AAA releases like Gears of War: Judgment, Tomb Raider and BioShock Infinite.

http://www.gamesindu...wont-help-wii-u

 

[Goodtwin]

He's right, a price drop by itself wont make a huge impact.  A price drop coupled with a few key first party titles could make a huge difference.  The Wii U needs key titles to be released, and then get the price down to $199 asap.  This isnt the Wii where it was selling like crazy for two years straight.  Nintendo has traditionally dropped the price of its consoles after only 6 months.  The N64 and Gamecube both saw year one price drops to $149.  The Wii U cant go that low, but a drop to $199 is possible right before christmas. 

[NintendoReport]

He's right, a price drop by itself wont make a huge impact.  A price drop coupled with a few key first party titles could make a huge difference.  The Wii U needs key titles to be released, and then get the price down to $199 asap.  This isnt the Wii where it was selling like crazy for two years straight.  Nintendo has traditionally dropped the price of its consoles after only 6 months.  The N64 and Gamecube both saw year one price drops to $149.  The Wii U cant go that low, but a drop to $199 is possible right before christmas. 

 

Got to be extremely careful with a price drop regarding the Wii U. $199 ? That would start hurting sales of the 3DS XL @ $199 and standard at $169. I don't see Nintendo dropping the price of the 3DS again either.

[Azure-Edge]

He's right, a price drop by itself wont make a huge impact.  A price drop coupled with a few key first party titles could make a huge difference.  The Wii U needs key titles to be released, and then get the price down to $199 asap.  This isnt the Wii where it was selling like crazy for two years straight.  Nintendo has traditionally dropped the price of its consoles after only 6 months.  The N64 and Gamecube both saw year one price drops to $149.  The Wii U cant go that low, but a drop to $199 is possible right before christmas. 

 

So....you expect a brand new console that hasn't even been out for one year to drop it's price by 1/3 (for basic) and be under the price of two consoles that have been out for 7 years? 

 

 

.....

 

 

......

 

 

You don't own your own business do you? 

[Goodtwin]

Publishers will not support a console that averages 200K in sales a month for the long term.  Nintendo is paid royalty fee's on every single piece of software sold for their hardware.  So they make about $15 per third party title sold.  They obviously make a lot more per first party title sold.  If nintendo drops the price of the Wii U to $199 later this year, the actual production cost will probably be about the same.  Electronics manufacturing cost drop like a rock.  Even if they still take a loss, with all millions of extra consumers buying software, the losses will be made up quickly from royalty fees and first party software sales.  Im not dead set on the $199 price, it could be $239, but it needs to get under $249 to really hit the mass market. 

 

People can think what they want, if the Wii U ends the year with only 6 million units sold or less, they are in deep trouble with all the major publishers.  They arent going to show major support to a console that is onl pace to sell worse than Gamecube.  Its basic math, if Nintendo sells an extra 3 million consoles due to the price drop and has an average attach ratio of 3 to 1, that is a minimum of $45 per new customer returned to Nintendo in the way of royalty fees, a lot more if those games sold are first party titles.  Nintendo has to make sure the Wii U is an attractive platform for third parties, a low install base is never attractive for third parties.  Ubisoft seems to understand that you have to make some investments early to build a consumer base for your titles, but they will still be very cautious if the sales remain so stagnant. 

[Julio93]

It needs some games, not a price cut, look at Lego City and Monster Hunter, they were up on the top sales chart last month.

[Goodtwin]

I said they need games, but games alone wont bring the type of success they need to show publishers that they are a serious platform, and they should support it.  The price will drop before the year.  Will it be $100 price drop?  Maybe not, but then again I could see Nintendo getting rid of the Basic model and selling the Deluxe model for $249.  I dont know why people take the price drop thing personally, the Playstation 2 the most successful console of all time had a price drop within a 18 months of launch.  I believe that went from $299 to $199.  Its commen sense that a console with good games is going to sell more units at a lower price.  Right now a price drop doesnt make sense because it doesnt have the software to really drive sales, but that will change in the second half of the year, and thats when a price drop of some sort makes sense.   

[Plutonas]

Price drop will help them in EU... Its double than the US.

Edited by Plutonas, 16 April 2013 - 09:53 AM.

[Azure-Edge]

Publishers will not support a console that averages 200K in sales a month for the long term.  Nintendo is paid royalty fee's on every single piece of software sold for their hardware.  So they make about $15 per third party title sold.  They obviously make a lot more per first party title sold.  If nintendo drops the price of the Wii U to $199 later this year, the actual production cost will probably be about the same.  Electronics manufacturing cost drop like a rock.  Even if they still take a loss, with all millions of extra consumers buying software, the losses will be made up quickly from royalty fees and first party software sales.  Im not dead set on the $199 price, it could be $239, but it needs to get under $249 to really hit the mass market. 

 

People can think what they want, if the Wii U ends the year with only 6 million units sold or less, they are in deep trouble with all the major publishers.  They arent going to show major support to a console that is onl pace to sell worse than Gamecube.  Its basic math, if Nintendo sells an extra 3 million consoles due to the price drop and has an average attach ratio of 3 to 1, that is a minimum of $45 per new customer returned to Nintendo in the way of royalty fees, a lot more if those games sold are first party titles.  Nintendo has to make sure the Wii U is an attractive platform for third parties, a low install base is never attractive for third parties.  Ubisoft seems to understand that you have to make some investments early to build a consumer base for your titles, but they will still be very cautious if the sales remain so stagnant. 

 

And how much of an install base do you think the PS4 and Nextbox have? According to my numbers, 0 and 0. It takes time to create an install base, yet it seems like people just assume all the PS3 and 360 owners are going to just move right on to the next gen systems. I doubt it's going to be this smooth. I also doubt that third parties are going to move right along on to the next gen systems with no hesitation and just bypass the WiiU altogether. They've gotten very comfortable and very used to having the combined install base of the PS3/360 of around 140-150 million units to work off of, and their productions costs show as such. I'm not saying there won't be games on the next gen systems, but I get the feeling that we're going to see a LOT of games that are PS3/PS4 and 360/Nextbox simply because publishers are going to find it hard to keep maintain their current ways of making games with giant budgets and also not put them on the current HD twins. This is going to be a giant pain for Sony and MS because having third party support on their systems is critical for their success yet if a majority of third party titles can be purchased on their older systems, then they're going to have a harder time convincing people to upgrade. I could be wrong about this, but this is the way it looks as the way things are now.

 

Getting back to the WiiU, just because they sell a lot doesn't mean 3rd parties are going to jump on board, nor does it mean that they will stay away. I've said this before, 3rd parties aren't one giant homogeneous group. Look at Ubisoft, they're obviously supportive of the WiiU while EA is not. There's no difference in risk between either of them yet they're taking opposite strategies towards the system. There's nothing that Nintendo can do to MAKE third parties do anything. Also, Nintendo has been burned badly by banking on third parties in the past, so they need to do what makes sense for them in the long term. Taking huge losses on their system and just hoping that 3rd parties get interested isn't going to cut it. Look at the WiiU launch, they obviously held back their big guns to try and give the third parties more room to get sales and how did that work out? It's biting them in the ass that now they don't have a killer first party game out.

 

Sure, the price of tech does drop but manufacturing, packaging, shipping, etc. do not, so you can't compare it as if you were buying off the shelf PC parts. Nintendo dropped the price of the 3DS early by 80 and they had to eat that price cut, and it hurt their profits. In the long term it helped, but it was a gamble, not a guarantee. The idea of them getting under $250 is outrageous, they'd take a giant loss on every system sold just in the hope that people buy lots of new games with it. I have no problem with a price drop, and I do think it can work in their advantage. But it has to be done strategically and realistically. Do they wish they could sell it cheaper? Of course, but there is a reason why they chose the price they did. They didn't pick their prices arbitrarily. 

Edited by Azure-Edge, 16 April 2013 - 10:20 AM.

[magiciandude]

So according to Pachter, it WILL help the Wii U? 

 

Seriously, why are we still giving this guy a attention? I thought it was known by now that his predictions have the opposite outcome (most of the time anyway). 

[DéliopT]

He's right, a price drop by itself wont make a huge impact.  A price drop coupled with a few key first party titles could make a huge difference.  The Wii U needs key titles to be released, and then get the price down to $199 asap.  This isnt the Wii where it was selling like crazy for two years straight.  Nintendo has traditionally dropped the price of its consoles after only 6 months.  The N64 and Gamecube both saw year one price drops to $149.  The Wii U cant go that low, but a drop to $199 is possible right before christmas. 

I`ll agree with the bolded.

 

Dropping the price on N64 and GC never really helped as you can see by their sales.
It`s true that Wii U will never sell like Wii, but doesn`t mean Nintendo needs or should follow the path of N64 or GC. Wii U has enough potential in it to offer something different and remain more relevant than the other two consoles ever were.

So far Wii U might be lacking some 3rd party games but the only big one - at least confirmed - is BF4. No one knows for sure if GTA V or MGS 5 will come or not to Wii U.

Also, one thing that hurt both N64 and GC right from the get go was that they both suffered from arriving too late to the market. PS1 was a already resonating with core gamers before N64 arrived and PS2, well... what can you say... how can you arrive one year later to the market to face PS2? Even Xbox suffered the same fate of GC.

 

Despite things not going well for Wii U it still has 6/7 months to show that it can be a good alternative to PS4 and Xbox 720: just bring the big games and a good 3rd party support on a constant basis and Wii U has a good future ahead of it.

Core gamers already changed from Nintendo to Sega, to Sony, to MS. And they can change console of choice again!

[Alex Atkin UK]

As above, the transition from PS360 to PS4Next should actually help the Wii U as they will need to continue developing games for both generations for some time yet.

 

If you are making a game for all those systems it may very well make more sense to have the Wii U as the primarily platform, because it fits right in the middle.  It has the shaders and other advanced GPU effects of the PS4Next, but in other ways comes closer to PS360.  So porting in either direction should be easier from Wii U.

 

However, far more importantly, why on earth are they still bothering to report a single word Michael Pachter says?  Has he ever been remotely right about anything?  He is the comic relief of the industry.

[YoshiGamer9]

fork pachter  I would say mean things about him but there's younger childern here...

[Alianjaro]

Im pretty sure Nintendo offers lowest costs on the market...

[SoldMyWiiUAndLeftTheForums]

I think the Wii U is priced very fairly at $300 - $350, £250 - £300, when the Nextbox and PS4 come out at insane prices like $600 - $700, £500 - £600 what console do you think the general public will flock too during these hard economical times? I can't wait to see the reaction of butt wipes like MP when the Wii U sells better.

[Socalmuscle]

This guys a dweeb.

No one wants a console with no games. Especially when nearly all of the games available can be played on your current old console.

Nintendo already admitted a price drop won't help.

GAMES WILL.

The end.

Wii u doesn't need a price drop. Consider the great hardware you get plus the amazing software services that you don't have to pay again and again to use. On top of that, consider that Nintendo is literally selling it at a loss. It's priced aggressively.

Compared to me next xbox which is likely always on because it will require an Xbox live subscription to subsidize the console. So me will sell it initially at a big loss to seem price compareable with wii u, but ultimately the gamer will have monetarily bought 4 or 5 of them by the time thad next gen rolls around. Ms already experiments with the "subscription model" now. $99. 360 + so much $ per month. Not cool. But there are stupid people everywhere who will pay for it.

Edited by Socalmuscle, 16 April 2013 - 09:24 PM.

[Nintyfan86]

This dude is like that annoying guy who walks up to a crowd, looks up and sees clouds, and says, "Hey, watch out, it might rain". 

 

Let me tap into this psychic power like he does today:

 

"If Sony prices the PS4 at $800 per, it will sell 40 million units. If it is $600 per, 60 million, and $300, it will outpace the PS2 and Wii. Either way, they could charge $1000 for it and it will outsell Wii U"

 

...E3 comes, Nintendo drops some megaton, Xbox720 priced @ $400 & $500, Sony flops, announces $500 firm, worse DRM than M$, use your imagination... 

 

"Sony is screwed no matter what, Microsoft is going to win the gen, and Nintendo isn't charging enough for Wii U's!"

 

A bunch of his "analysis" is less analytic and statistical, and more about sitting around reading message boards (can't blame him, speculation does you no good in this industry ::cough Vita smash 3ds:. 

[Mewbot]

So according to Pachter, it WILL help the Wii U? 

 

Seriously, why are we still giving this guy a attention? I thought it was known by now that his predictions have the opposite outcome (most of the time anyway). 

"Nintendo watches me and does exactly the opposite of what I say." -Micheal Pachter

(Don't listen to this though, he usually wrong!)