Feature: Nintendo Banks on Its Old Money Makers

If in doubt…

Nintendo is set to announce its latest financial results that will cover the past year, and it’s anticipated that, for the first time in its history, the company will record a yearly loss. It’s an obvious blow for Nintendo, particularly as the past five to six years have brought staggering success. Even the results for 2010-2011 — which were driven by ageing Wii and DS consoles — brought a profit of 77 billion Yen, so it’s unfamiliar territory for Satoru Iwata and his fellow board members.

The loss isn’t a surprise though, with the company conceding that it was coming in recent months: it’s not a question of if there will be losses, but how big they’ll be. The latest estimate, announced in January, is that losses will total roughly 65 billion Yen, so perhaps recent success will be judged on whether the final results are better or worse than that estimate. On the surface, and for Nintendo’s rather vocal shareholders, this bodes ill for the company, a sign of troubled times. That doesn’t tell the whole story, however, as Nintendo has spent the past eight months aggressively retrieving the situation, setting changes in motion that it hopes will make the loss a one off.

Not many of those changes have applied to the Wii, sadly, but that’s hardly surprising with Wii U coming later this year. It’s the 3DS that has been the focus of a planned revival: an aggressive price cut, the holiday release of both Super Mario 3D Land and Mario Kart 7, and a significant number of additions and enhancements to the handheld through system updates. When compared to the launch day system and catalogue, a fully updated 3DS bought today is a far more substantial and functional machine, with a number of quality games to buy from stores.

These changes have all contributed to a revival in 3DS hardware sales, with over 15 million units sold according to the latest set of figures on 1st January. While additional functionality and online features help, however, perhaps it’s the mainstream franchise games that really set the tone for success. It’s a common perception that Nintendo games ultimately drive sales for its systems, and not necessarily technological bells and whistles. The announcement that New Super Mario Bros. 2 will hit 3DS just nine months after Super Mario 3D Land suggests that Nintendo may think the same. We’re going to test the theory out and see how some of the biggest-selling franchise titles perform alongside their respective consoles, and what this could mean for the future software library, and Nintendo’s focus, on 3DS and Wii U.

Please, Nintendo, can we have some more?

Debates often rage about the range of games on Wii and DS, for example, as some will point to dozens of under-appreciated gems and boast of wonderful software libraries.

Some of us Nintendo gamers like to think that our consoles mean more to others than just another Mario game. Debates often rage about the range of games on Wii and DS, for example, as some will point to dozens of under-appreciated gems and boast of wonderful software libraries. Despite this it’s a fact, to varying degrees, that the huge sales of those two consoles also correspond to significant sales of a few select first-party titles, figures that third-parties, no matter how good their games may be, can only dream of. Even more staggering is the ratio of console owners who pick up these titles, making them dominant in the console’s success. This is your statistics warning, but stick with us.

Let’s take some figures for DS, all formally announced totals that were accurate on 1st January this year. The DS console has an incredible lifetime sales total of 151,060,000, so naturally there is a decent mix of software titles amongst all of those owners. New Super Mario Bros has shifted 28,740,000 copies, just under 20% of console sales, about one in five. The Mario platformer arrived in May 2006, while the original DS has been around since November 2004 (North American release), and that figure suggests that, actually, the flagship Mario platformer hasn't been heavily relied upon for DS sales. Pokémon Black and White, meanwhile, has sold 14,420,000 copies, which amounts to around half the Mario total at just under 10%. These figures suggest that even the biggest releases weren’t necessarily essential gaming on DS, meaning a diverse games catalogue being bought by a broad base of users.

Does the Wii maintain the same trend? To date Wii has sold 94,970,000 units: not quite at the level of DS but still exceptional. The biggest selling Mario title is Mario Kart Wii, its 31,910,000 sales narrowly beating New Super Mario Bros. Wii: that’s 33.6%, pretty much one-third of Wii console sales. Not far off that level is Wii Sports Resort, the MotionPlus experience selling 29,870,000 copies overall, or roughly 31% of Wii systems. The balance board is similar, with around 36 million official Wii Fit peripherals being sold, over one third again. With Wii there’s a clear trend of the biggest selling titles dominating the software scene, and it’s not a stretch to say that this may make life harder for different IPs or smaller titles, in comparison to the DS.

To go to 3DS, why are we preparing for a second Super Mario title in less than a year? Once again its potentially because, like Wii, the system owners are increasingly gravitating to big name releases in greater numbers. Earlier we told you that 3DS has sold just over 15 million consoles, so what games has that growing user base been buying? Super Mario 3D Land is the top-seller, with 5,030,000 copies sold, almost exactly a third of the console sales, while Mario Kart 7 sales of 4,540,000 aren't far away. The Legend of Zelda: Ocarina of Time 3D is also highlighted by Nintendo, its sales of 2,490,000 coming in at around 15% of 3DS sales, but still decent figures.

What does this mean?

When it comes to 3DS and Wii, major Mario titles or new experiences — targeted to be accessible or recognisable to all-comers — are increasingly dominant in software sales. The DS arrived over two years before Wii and it appears to be the case that its diverse library catered to a wide audience that spent its cash on a variety of different titles. The biggest sellers on Wii and, so far, 3DS tell a different story: key franchises and brands are making a bigger dent on the market and therefore becoming more important to Nintendo. While this may be considered short term on 3DS, the results for Wii, now well over five years old, suggest otherwise.

The danger is that Nintendo, in order to secure continued success for 3DS and Wii U, will target a smaller number of franchises and game styles. We hope that this won’t be the case, but New Super Mario Bros. 2 is a perfect example of this policy coming into effect. Perhaps we shouldn’t complain, as Nintendo’s financial success will mean that it can continue to give us exciting systems and games, but these trends don’t bode well for long-term variety in our gaming libraries nor for third-party support. Time will tell, as will next year’s financial results, but Nintendo’s strategies may be going through a change. Maybe we’ll need to change with it.

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