News Article

Analyst Firm Concerned That Wii U Will "Lack Broad Appeal"

Posted by Thomas Whitehead

Believes Sony and Microsoft successors are due this year

Last week saw the annual tech hoopla of Consumer Electronics Association (CES) 2013, with a number of gadgets such as the Nvidia Project Shield handheld unveiled. Although not all major technology companies were in attendance, it was an opportunity for various contacts to be made and for industry analysts to seek vital information.

Baird Equity Research is one such firm that spent CES "with a number of companies involved in video game development and distribution", and issued its latest predictions and interpretations of what's coming in the game console industry. As a clear example of how analysts and their firms don't always agree, Baird's thoughts on Nintendo countered the fairly positive Wii U predictions from International Data Corporation.

We remain concerned that Nintendo's innovative Wii-U console will lack broad appeal beyond the core Nintendo fan base.

Following a somewhat lackluster launch and holiday selling season, Nintendo will need to bring to market major first-party releases (Zelda) and retain the support of key third-party developers to reduce market share losses. In a negative scenario, Nintendo will be forced to prematurely lower the Wii-U price, and over the course of this cycle, we expect consideration will be given to extending first party franchises to other platforms.

We've heard the claims that Nintendo may take its franchises to other systems before — smartphones are often mentioned — while the mention of a price reduction will certainly bring to mind the 3DS cut and related Ambassador Programme offered to early adopters. In terms of Nintendo's competitors, the firm anticipates Microsoft's successor in November and an October launch for Sony's system, though there "may be early production issues with Sony's PS4."

Two different outlooks on offer from analyst companies, both of whom are undoubtedly paid good money and make it their business to get ahead of what's coming in the industry. Where do you stand? Do you agree with IDC that Wii U will "find an audience" and hit 50 million sales by the end of 2016, or do you agree more with Baird Equity Research's belief that the system could "lack broad appeal"? Let us know in the comments below.

[via gamesindustry.biz]

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User Comments (61)

real_gamer

#1

real_gamer said:

I think it will find a audience in the future. The WiiU will need time to have an audience to grow and when you have games such as the new Rayman and Alien game, I think it will find an audience. Let us not forget the Big N franchises.

AyeHaley

#3

AyeHaley said:

Nintendo isnt forced to take such a drastic step when their consoles are still selling like hot cakes. Too early to call Wii U a failure btw.

Dashtag

#4

Dashtag said:

I'm tired of hearing all this negative stuff about the Wii U... look, it's doing fairly good right now, as soon as they get a Zelda, Smash, Pikmin, 3D Mario, and some other First-Party stuff on it at E3, sales'll be boosted a ton. Stop worrying.

erv

#5

erv said:

These people tend to compare to previous launches and timeframes, with the wii being a borderline crazy example. So I think they lack proper context.

Also, if the wiiU is profitable with a single game sold, there is a business model there. Far less risky than what sony is doing at the moment. Moving your VERY valuable IP onto a different platform with a less viable business model would not make sense.

The system will easily be over 4 million within its first half year of existence - and with many positive responses and experiences sell more gradually. So the system is actually doing great and has a bright future... I don't think any statistic will prove all of that wrong.

Oh well. Is monster hunter out yet?

Will-75

#7

Will-75 said:

So I take if a product don't sell 40 million units within its first two weeks of being released it's a failure and doomed , @shiryu I agree 110% where do they get these people..

Dashtag

#8

Dashtag said:

@erv But it's not. It was reported just a little while ago that you need to buy more than one game for it to be profitable.
EDIT: Maybe not here, but it was reported.

Mahe

#9

Mahe said:

I'm concerned, too. A console with Pikmin, Nintendoland and HD ports with little else is not for me. Where is the next game from Monster Games, or niche third party titles like Trauma Center?

Sean_Aaron

#10

Sean_Aaron said:

Nintendo should no more listen to these analysts than Sun Microsystems should have abandoned Sparc in favour of Intel processors.

Analysts are paid to mouth words in the hopes of steering companies in a direction they hope will benefit their clients and in many cases that means suggesting companies reduce costs by dumping their proprietary hardware.

If companies like Nintendo want to be free of these parasites the best solution is to take the company private or get a majority stake and not be beholden to outside funding.

I skipped the Wii U until the end of 2007, so honestly I have no expectations for the first year of Wii U, but I think things are shaping up pretty well.

FarukoSH

#11

FarukoSH said:

I do have to say that this generation (3DS and WiiU) Nintendo didnt know what to do with their launch games... if history is any indication YOU LAUNCH YOUR CONSOLE WITH A PROPER FIRST PARTY TITLE...

While NSBU looks great (havent played), if you want to get the so called "hardcore games" (god i hate the term...) you need to launch with a Zelda, Metroid even a Star Fox game... a Mario game its pretty damn awesome (and popular for all that matters), but i would have expect a 3D Mario ala Galaxy something that showed what Nintendo guys could do with a proper HD console, or maybe NSMBU but with another Nintendo first party, like the ones i said before... I do have to say however, that PS3 and 360 launch were just as barren and awful (my 360 gather dust until GoW, a year after the console launched, god that launch "window" was butt...) and Nintendo need it to realize that. thats why they had hard times when they released (sum that to the 600$ price tag of the PS3 and you have one of the worst launches ever...)

Nintendo didnt set the world on fire at the WiiU Launch (its, in my opinion, the best Nintendo console since the SNES), and thats their fault...

Svengoolie

#13

Svengoolie said:

I think it has a ton of appeal, it's just a matter of getting the controller in people's hands. Once they play with it, they realize how cool it is.

Moshugan

#14

Moshugan said:

The low software attachment rate is a bit bothersome. But that's just because the hardware is so costly so people will not be able to buy too many games from the start. Also, games are way too expensive in many countries. I expect things to be great (if not outstanding) for Nintendo with Wii U.

OracleOfTruth

#15

OracleOfTruth said:

I wonder how the folks who are complaining that the Wii U is too expensive will react when the next Sony and Microsoft consoles are launched. I can't imagine that either of those will be cheaper than Wii U. I bet part of the reason why the Wii U isn't off to better start is the fact that it's launching in a significantly different economical playing field than the Wii, Xbox 360, and Playstation 3. I believe that Wii U will find its stride, but it may just take a bit longer than previous generations.

Svengoolie

#18

Svengoolie said:

@Moshugan The low software rate is just because the big ports are games that we already bought on other systems. Mario has almost a 70% attach rate, which is huge, and ZombiU did really big sales. Other than that, there's still not anything really worth buying. Games will sell more when something actually comes out.

Peach64

#19

Peach64 said:

I don't think price has anything to do with it. Look how many iPads and iPhones apple sell despite costing way more.

It's not flying off shelves because of the lack of games. There's nothing major officially announced either. I am one hundred percent sure Nintendo will deliver the first party goodness eventually, but it has to be a worry for them. By the time the Microsoft and Sony consoles launch, it will be very hard to put out Wii U versions of games developed on the other consoles due to the gap in power. The best chance to keep the multiplatform games coming is to have a huge install base.

LittleIrves

#20

LittleIrves said:

It drives me crazy that so many equate Nintendo Success with a new Zelda title. 1) It hasn't been selling as well recently. 2) Skyward Sword came out not too long ago. After E3 2012 and Nintendo Land was the big showcase, a well-known games writer on whatever TV channel was actually showing the conferences (Spike?) asked, in all seriousness, "Where was Zelda!?" Um, it was on the shelves six months ago.

I know it's an amazing franchise, and people get all gooey over the prospects of a new one, but they're not annual installments or cookie-cutter updates. Anyway, a new Zelda will not suddenly make the Wii U desirable to the wide audience Nintendo is going for. The next unexpected, exclusive piece of new software will do that. And the new stuff is coming. It's just not out (or confirmed) yet. People gotsta slow their roll.

C-Olimar

#21

C-Olimar said:

The Wii U could sell less than 100 more units and Nintendo still wouldn't develop games for any other platform. They have enough money to endure plenty of failed consoles.

cornishlee

#22

cornishlee said:

I'm getting so tired now of the continual "Wii U will fail" stories. So bored of the ill-considered "Microsoft and Sony will have much more power/graphics in the next generation" narrative.

In a funny way, I'm almost looking forward to January 2014 when these stories will be repeated almost verbatim with the latest Sony/MS console in place of the Wii U.

Nintenjoe64

#23

Nintenjoe64 said:

Firstly, this analyst is just spouting the same nonsense that people have said about Nintendo since Sega went out of the hardware market.

Secondly, and rather more importantly, he doesn't know what he is talking about with regards to sales or success of the launch. The wii is one of the all time biggest success stories in gaming hardware, nobody will ever have a launch like that again. Compared to other hardware launches, the Wii U is doing fine.

Mk_II

#24

Mk_II said:

You cant launch with a major Zelda title, it's just impossible if you want to maintain the quality everyone expects. You need at least 2 to 3 years with an experienced team and you cant really develop for a system thats still on the drawing boards.

Dogpigfish

#25

Dogpigfish said:

Paid by MS and Sony. They are more concerned about survival. I like my ps3, but predict Sony will bomb this generation.

Farmboy74

#26

Farmboy74 said:

Another week, another negative article doing the rounds about the Wii U. There are some games I find interesting coming up, Lego City, Rayman Legends, Aliens Colonial Marines, Wonderful 101, Bayonetta 2. Lets see what the situation is like in 12 months

rjejr

#27

rjejr said:

@True_Hero - The new Sony and MS consoles will be more, but you'll get more, so it will look better. A blu-ray drive in the PS4, maybe a Kinect with the Kinectbox. The Wii U is $299 with 8GB, less memory than most tablets. It's a great graphical update over a Wii, but not over a $269 PS3.

The Wii U will "Lack Broad Appeal" b/c there's no buzz. The Wii was "2 Gamecubes duct taped together". That phrase, while insulting, gets 29,100 results on Google. "Gamepad" gets 23 million results, but they aren't about the Wii U, they're about Logitech. NintendoLand sounds like a theme park in Minnesota, it's no Wii Sports. The PS3 got buzz for being $600. Maybe nobody wanted one, but everybody was talking about it. Who's talking about Wii U?

Mulder1617

#28

Mulder1617 said:

I am afraid to say this but I fear that just a few HD rehashes on a new machine that is just catching up to the Xbox 360 and PlayStation 3 may get blown out of the water if the X-box 720 and PS4 come out this year. There is already a ton of awesome first party games on the 3DS that to me is doing so much better and has a better chance at real success in the long run. Perhaps I'm being too pessimistic but I really regret having sold my ambassador 3ds for a Wii U.

FarukoSH

#29

FarukoSH said:

Anyway, besides what i wrote, will somebody please wait at least 12-18 months before all the doom stuff? I still remember when Zune was ging to crush the iPod, Betamax was the future, the bluray was going to fail so hard, when the iPhone was never going to get any mass support, the vita was going to crush the 3DS and the Smartphone gaming market was just "temporary" and there thousands of other examples...

Give it time, patience is a virtue

Drewroxsox

#31

Drewroxsox said:

I think big first party games will produce a lot of Wii U sales, but until then, the Wii U isn't going to be flying off the shelves :/

citizenerased

#33

citizenerased said:

In fairness, if the Wii U isn't picked up by the mainstream, it might very well become a Gamecube story. People here are saying the great first party games will attract sales, but they didn't for Gamecube. Nintendo's only shot at doing better is the mainstream (they won't change the minds of people who think they're too cool/old for Mario anyway.)

Gamecube had awesome games, so I don't care. Nintendo will continue to make awesome games. Even if the crazy scenario comes when Nintendo stops making consoles, they'll make games on other consoles, I'll just buy those instead.

rjejr

#34

rjejr said:

@Void - "Doomsayers and people who own it."

That's pretty funny. Actually that's really funny. I'm guessing (though I could be wrong) that you wrote that to disprove my point, but I think it actually backs it up. People who own the Wii U seem happy enough, but they were mostly going to buy it as soon as Nintendo announced it anyway. How many people have been "sold" on a Wii U based on Wii U advertising? All the doomsaying can't be helping sales any.

edhe

#35

edhe said:

Every time an analyst claims that Nintendo should consider releasing games on a competing platform, a kitten dies.

Lopezdm

#36

Lopezdm said:

If you don't have any good game for the Wiiu I will not buy them.. Zelda is great,grand,and wonderful but I'm not waiting 2 years for it. In the mean time how about you get Watchdogs, DMC, GTA5, and ex on the wiiu so we have something to play between your Mario party 9 million and all the other happy horse doody Nintendo prizes as "it's best ip".

Dreamcaster-X

#37

Dreamcaster-X said:

Nintendo games on another platform?? WTF??? WAAAAAY too early in the race to be calling for such drastic measures. Their portable business is doing just fine!!

dtrain34

#38

dtrain34 said:

They shouldn't have even bothered with the 8gb Wii U and only made 32 gb systems @ $299.

ecco6t9

#39

ecco6t9 said:

Isn't this the financial equivalent of yelling "fire" in a crowded theater?

Suicune

#40

Suicune said:

Maybe if Nintendo had better commercials than people playing the Ninja Castle Nintendoland game in iridescent boxes, people would pay attention.

Sean_Aaron

#42

Sean_Aaron said:

I feel like quoting this for truth:

"Gamecube had awesome games, so I don't care. Nintendo will continue to make awesome games. Even if the crazy scenario comes when Nintendo stops making consoles, they'll make games on other consoles, I'll just buy those instead."

I bought a Wii because it had ONE game I wanted to play and another coming along I knew I would want. I went on to buy more software for it than I did on my Playstation. Regardless of what happens with Wii U's popularity amongst "gamers" I'm confident I'll be getting enjoyment out of my Wii U.

And dtrain34, if that was the case I wouldn't have bought one of these things. iPads and iPhones are boutique pieces of hardware - a games console isn't. If Sony launched the PS3 today for $600 it would fail utterly.

These are bad times folks and we aren't out of the woods yet. Just because you're lucky enough to be able to spend money on a new games console, don't forget there's entire nations going to the wall right now.

Zombie_Barioth

#43

Zombie_Barioth said:

As much as the Wii, no, but then neither would any other traditional console. A good chuck of the Wii's audience are people who might be turned off normal gamepads.

Money is tight so its likely more people are opting to stick to what they have or go with cheaper forms of entertainment, even older consoles they might not have. HD isn't new and the Wii U isn't a huge upgrade over PS3 or Xbox360 right now so neither are a selling point to anyone but Nintendo only gamers.

grimbldoo

#44

grimbldoo said:

These analysts need to analyse their analysis's and realize that they are being anal.

MAXIMUS

#48

MAXIMUS said:

Nintendo is held to such a different standard than anyone else in this industry. Analysts complain that the Wii U is too costly but won't have a problem when MS and Sony release their cash suckers in due time. They complain that there are no compelling 1st party releases during the launch window but we all know that neither of the other two upcoming launches will have anything to write home about either. Yet I guarantee that no one will be citing Sony's demise over a slow start.

AmishThunder

#51

AmishThunder said:

I think that the next Xbox (720/whatever) is going to be the mass market sweetheart. I expect it to have the broadest mass market appeal. I think eventually the Wii U will find it's place sitting behind the next Microsoft system. As for Sony, unless the PS4 is something really special, they're going to be at the bottom of the barrel. Of the next generation of systems, I think Nintendo has the most to prove and the most to gain, Sony has the most to lose, and Microsoft kinda' just has to not screw anything up. In the end, I want a Steam box.

Rapadash6

#52

Rapadash6 said:

What's sad is Nintendo wanted this system to appeal to a wider audience. Yeah, when you keep games and 3rd party partnerships secret for so long, and then not have much when you finally do reveal them, things usually fall kind of flat. Nintendo failed with Wii U, and as much as I love their games, they really need to learn a lesson here. Hopefully it sinks in this time.

armoredghor

#53

armoredghor said:

maybe not 50 million console sales by the end of the year but they'll stay afloat long enough to stay alive. Since penny arcade promoted it for multi platform games, I think it will get more sales there. (mentioned because its a multiplatform site) heck COD might be a highest seller on Nintendo this year.

Void

#54

Void said:

@rjejr Well they are the few people talking about it, I said it mostly just to be funny though.

grimbldoo

#56

grimbldoo said:

@Mahe #51
He kinda made that point, no one claims that Sony is doomed even when it's obvious that they are not doing well.
And I hope Sony goes near bankruptcy, it will force them to start making quality products, they are too full of themselves and their near demise would be poetic justice.

Sean_Aaron

#57

Sean_Aaron said:

Sony clearly realises they're in trouble, but in this climate pushing 4K TVs doesn't seem like a recipe for success. I've enjoyed their products in the past so I wouldn't want to see them fall, but historically they're not a company that plays well with others. I feel like Blu Ray succeeded as a niche video format in spite of itself because they still seem more fixated on extracting license revenue from everyone rather than setting industry standards.

If it wasn't for Philips' involvement (the folk who brought use the audio cassette - which succeeded because the spec was open and didn't require any license money for manufacture), CD probably would have remained proprietary!

cornishlee

#58

cornishlee said:

@Sean_Aaron
It does seem to me that if you compare Microsoft, Sony and Nintendo then Sony are in the worst position. They're losing money across the board (despite still making quality products others, such as Samsung, have hit them hard in recent years) but if we confine ourselves to looking at the console market it's hard to see where they can go. Ever since the first Play Station they've basically driven the more power/better graphics narrative which Microsoft also adopted.

They've been successful in the past with including DVD and Blue Ray playback into their consoles, which has driven demand not just for the consoles but for the media itself, thus earning them extra money and ensuring their proprietary technology as an industry standard. The Ultra HD thing just can't work in the same way - it's not offering something else but requiring something else, a crucial difference that, as you say, could be too much in the current economy. £350-500 for a console and £1,000-2,000 for a new TV at the same time?

This is why I don't buy the "Sony and Microsoft will knock Wii U out of the park next year" idea. Higher resolution graphics just don't have a market right now. I expect Microsoft to launch the next Xbox trumpeting full Kinnect, Smartglass and cloud integration out of the box along with a mildly improved cpu/gpu. Sony? Move?

Sean_Aaron

#59

Sean_Aaron said:

Yeah it's a shame too because I loved the original Playstation, region lock aside. Just a really. Nice-looking machine with a fabulously diverse software library which was the envy of other machines selling that generation.

I guess the PS2 improved upon that, but it didn't have anything to draw me in and dropped out of console gaming for that generation. The PS3 looked like a massive, hideous doorstop and cost a ludicrous amount of money as well. The cell architecture sounded about as friendly to program for as the multi-CPU Atari Jaguar and clearly contributed to Sony having to play catch-up with Microsoft. Frankly I'm surprised they're still in the race after that launch.

Next machine for them, well, we'll see, but for me that ship has sailed. They seem to be too much about going after the same market as Microsoft and that just isn't me, so good luck to them.

cornishlee

#60

cornishlee said:

Sounds like you missed one less generation than I did: I didn't own a console between the Megadrive and the Wii. My ex did ask me to get her a PS2 for Christmas in the early 2000's though and that's how I developed my Hitman/Onimusha love.

Good luck to them indeed, I think they'll need it. As you say, there's been little to differentiate them in this last generation.

FarukoSH

#61

FarukoSH said:

a new report says that the new xbox uses a 6670HD custom, this (somewhat) is what i expected, a new console with just a modest upgrade, not the real deal like the last-current gen leap was... maybe REAL 1080p resolution and not just upscaling a sub-HD format, maybe with proper frame rates too
We are actually hitting a wall here, diminishing returns its the name of the game now at least for consoles, if they want to keep the price down but also make a decent upgrade theres not much room to work with, and nor Nintendo, MS and Sony are in the position to try to force a new "situation" now.

The ointeresting part of the article, its that the next xbox (if rumors are true) its using the same base architecture (HD 6670) as the WiiU and the difference will be based on the "custom" part, that could actually means that the REAL problem with the WiiU graphics games its

A) Ports or B) Gamepad wich should take quite a bit of power out of the system to actually stream the game to it

So i would just wait before making any real statement, but it seems that the WiiU was never really THAT "underpowered" compared to the next systems as some say, and that would mean that the PS4/720 would be priced something along the 350-450 price tag... Mostly because if you want to make a huge leap without actually selling at a HUGE loss you would have to sell it around the 500-550 price tag, and in this times i dont know if any its willing to pay that

Just my 2 cents

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