News Article

Nintendo To Focus On Struggling Markets In The Short-Term

Posted by Dylan Newcome

Performance in U.S. and Europe is "less than satisfactory"

During the Nintendo investor Q & A, Satoru Iwata took many questions about Nintendo's various struggles with the Wii U launch and also shared some insight about Streetpass DLC and the disappearance of the Vitality Sensor. But a question from an investor about Nintendo's efforts in emerging markets allowed him to shed some light on the company's strategy going forward:

Of course, we value new markets in the emerging countries. We would love to be a cultural bridge connecting children all over the world and providing our new entertainment to people who are not accustomed to playing with video games yet. On the other hand, the fact that the U.S. and the European markets were not favorable up until a few months ago contributed to our less-than satisfactory business performance in the last fiscal year. So we first need to improve these markets, and this should contribute to our overall business performance that can make our shareholders smile. Having said that, although it might be difficult to localize our games in all languages, we believe that in this world, there still remains areas where we can launch our game services in English or Japanese and we will pursue these opportunities with our subsidiaries and agencies.

Looking at the figures - which can be found below - it's clear that Nintendo has struggled to grab a significant market share outside of Japan. Almost eight months after launch, Wii U is facing what can no longer be described as a simple slow start. Meanwhile, though the 3DS is certainly picking up steam, the handheld is still underperforming in Western markets.

Should Nintendo invest more in unfamiliar territory to try and foster growth in these areas to make up for the lackluster performance in the traditional Western nations? Is Nintendo's current strategy the right one? Share your thoughts in the comments section below.

[via nintendo.co.jp]

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User Comments (54)

SanderEvers

#4

SanderEvers said:

Untitled

See that.

And guys, we already did have our doom and gloom article of today. Write one tomorrow - or better- never again.

Pierceton

#6

Pierceton said:

Well make more games we want to play maybe make a development team in the US and Europe that are allowed to make games. If you want to please these market let them be apart if them. I can't even explain how much Nintendo doesn't listen to their fans and I for one am getting tired of it. I'm gonna start spending my money elsewhere if things don't change.

Mk_II

#7

Mk_II said:

They have already ramped up European marketing and promotional activities like the So Many Games offer. I'm also seeing more TV commercials like Monster Hunter 3 Ultimate 3DS on Discovery Channel.

dizzy_boy

#8

dizzy_boy said:

Nintendo need to let their EU and US headquaters set up their own software R&D.
If NoJ are reluctant to release Japenese orientated games in the west, why can't they just let their other devisions handle making western type games instead. TBH, that makes more sense to me than havin NoJ worrying about the western market.

Einherjar

#10

Einherjar said:

@BestBuck123 The console is sold at a loss, a price cut wouldnt help thge problem.
But fact is, we need games. When there is nothing to buy, they have nothing to earn money with. This isnt rocket science.
Let the games come and these numbers will surely rise.

ShadowSniper7

#11

ShadowSniper7 said:

I've said this before and I'll say it again. A full fledged Pokemon RPG on the WiiU console. Problem solved.

AcesHigh

#14

AcesHigh said:

This is the correct thing for them to do for sure. Many people don't realize that it takes capital and business focus to pursue each individual market. Especially where licensing and regulatory factors are present. Many companies decide that it is not worth the expense and the distraction to focus on smaller or emerging markets. In Nintendo's case, they are correct in that they need to be strong in their core markets before they can begin to compete in other smaller or emerging ones. This is a strategy most introspective and fiscally responsible companies would and have taken historically. This is not uncommon.

banacheck

#15

banacheck said:

It does not surprise me that Nintendo sells far less in EU & US, i hope it just is games what holding the platform back only time will tell.

Ukulele_Wizard

#16

Ukulele_Wizard said:

From a purely business standpoint, the most important thing that Nintendo can do is revitalize Wii U sales in established markets. From what I've read, Nintendo is basically the only video game company that invests in emerging markets (please correct me with facts if I'm wrong). So, as of now, in those territories they have no competition. Bolster sales in America, Europe, and Japan, and then focus on places like South Korea or South Africa. Get games out in established markets, then release them in emerging markets.
In my opinion, in order to revitalize sales, Nintendo needs to get rid of the basic model, make the Deluxe bundle available in black or white, and bundle games like Super Mario 3D World or Wind Waker HD for the console this holiday season. And announce an MK8 bundle as well for Spring. Mario Kart is the second best selling game for the Wii, GameCube, N64, and 3DS (fourth for the SNES), so I'm pretty sure that Mario Kart will be a hit. The Wii U will sell A LOT more units this holiday season if they do that. If they announce a price cut, then that's not bad, but I'm now on the fence whether they really need one. I mean, the lower price the better, even if it's only by $10.

rjejr

#17

rjejr said:

Nintendo should do what they did w/ DS, DS Lite and DSi sales and lump the Wii and WiiU together ;-)

Don't emerging markets usually get stuff years after everybody else? The 3DS might be a good candidate for world domination, but the WiiU needs to sell in the US and Europe before the X1 and PS4 consume the consumers.

Samurairu

#18

Samurairu said:

All they need to do is release a couple of VC's like maybe Earthbound.... It's not that hard. I don't think?

Pierceton

#19

Pierceton said:

@Einherjar the reason that the Xbox and playstation can be sold at a loss is because of third party publishers paying licensing to put their games on their consoles. Nintendo has a higher sale rate on first party games so they should make plenty of money off of game sales so selling the console at a loss shouldn't be as big of a fear because if they have higher console sales then they could have more game sales and still make money but it is a long term investment. Also Nintendo has a third and first party software crisis right now because they don't want to outsource games like f zero or star fox to be made. Yes they could make more money if made internally but if the games aren't made at all then there are no sales. As for third party it is hard to develop for a consoles with low sales because there is less chance for money to be made. So honestly a price cut would probably be the best way to go to boost sales considering the ps4 is 399. I love Nintendo abd I own a Wii U but if they want people besides their fans to buy their home console they need to take a page from the 3ds handbook and do a price cut followed by a ton of first party support. That being said I think it's in the card but Nintendo is being wise by not showing their cards.

JaxonH

#20

JaxonH said:

@Happy_Mask Can't argue with that, and it's a shame because BOTH Wii U and Vita are excellent pieces of kit. The difference is, Vita has all but been abandoned- its fall/winter/2014 lineup is virtually non-existant, and it's going on 2 full years since its launch. All of 2013, and the only worthwhile exclusives it gets is the mediocre Soul Sacrifice, Killzone Mercenary, and Tearaway? Even including ports and multiplats, there's only FFX, Persona 2, Sonic Transformed and Rayman Legends for 2013 (maybe I'm forgetting a game or two but you get the point). That's anemic for being in the market 2 years. The key difference between Wii U and Vita is that Sony abandoned Vita because it didn't magically produce a sizeable install base with all the crap games launched with it (CoD2 Declassified, Resistance Burning Skies, etc...) Sony says, "No install base? No games then." Nintendo on the other hand will support Wii U in order to ACHIEVE a sizeable install base, and will never abandon the system no matter what.

brucelebnd

#21

brucelebnd said:

lower the price on the wii u. everybody has a wii because it was inexpensive. i know nintendo wants to make money on the hardware but if they want to boost sales they need to consider breaking even.

JaxonH

#23

JaxonH said:

@Ukulele_Wizard I do think it's possible they could increase sales dramatically without a price cut if they play their cards right, however, they would have a very small margin of error if they chose that route. I think a price cut's the best option because it gives them a little leeway

devilwaffle

#24

devilwaffle said:

Wait, I don't know if I understand everything quite right, but does this mean they want to work harder towards localizing their games?

Tryken

#25

Tryken said:

I'll give you some great ideas, Utilize some of your massive IP library that you're not touching. Don't play such a massively safe game. These choices they're making are too safe. Where is a knock-out title? Not a single first party IP announced contained that excitement. And most Nintendo fans were disheartened by a new Donkey Kong game over the other options. I think a new F-Zero or Star Fox would have provided that "hardcore" zing the console needed. I'm just not convinced that Nintendo is out to please the core audience. I think they're saying it with their words, but until New Super Mario Bros. is not a core game, and the 3D Mario doesn't seem to have the ambition that Sunshine, 64, Super Mario World, Galaxy, or the other major entries in the series contain.

But, then again, what Nintendo needs to do is increase its sales. It came from the casual crowd before, it'll come from the casual crowd again, most likely, unless they do something more to woo the betrayed Xbox One fans, which they've actually done a bit.

I still love my Wii U, look forward to 3D Mario World and hope it proves me wrong (I trust Nintendo still), Mario Kart 8, and, of course, Wonderful 101 and Windwaker remake. But I'd like a big hardcore surprise. Just a single game, Nintendo. Throw me that bone.

Edit: On second thought, I really am pleased with Bayonetta 2, Wonderful 101, and X coming out. I'm just being a grumpy old Nintendo fan and wanting to see those franchises that are collecting dust in Nintendo's vault. They're giving hardcore games, too, but I think everyone here wants a new F-Zero, Metroid, or Star Fox.

sleepinglion

#27

sleepinglion said:

As a lifelong Nintendo fan there are several things I would love to see NOA do. Nintendo's best chance for success in the short-term is to take care of its hardcore fanbase. We buy Nintendo systems to play Nintendo franchises, it's that simple. This far into the Wii U's life cycle there should be more franchise titles to choose from than New Super Mario Bros U. Though too late to do anything about its launch lineup Nintendo seems to be moving in the right direction with what it has coming up over the course of the next 6 months or so. In retrospect, a new entry into a 'forgotten' franchise like Starfox or F-Zero could have really boosted initial sales. It's frustrating when Nintendo keeps saying there is "nothing new" they can do with older franchises that gamers keep asking about while churning out 10 different variations on 'New Super Mario Bros.'.
A quick fix that would make many eShop customers happy is beef up that Virtual Console library. The release schedule is meager. At the current rate of one to two VC titles a week there is no way Nintendo could ever hope to released even a fraction of their historic library before the next console cycle. Some Gamecube VC releases would be most welcome and there's no good reason why each week can't feature an NES release, an SNES title, an N64 game and a GC title. If an emulator can run Super Mario 64 on my phone (for free) Nintendo can spare the resources to port it to the Wii U.

BossBattles

#28

BossBattles said:

when it was obvious the 3DS was priced too high, they acted aggressively and people responded.

i sure hope they aren't just being proud right now, and don't have a plan up their sleeves with the Wii U. it needs to come down at least $50, and they should offer some great deals with it, or make a new SKU that has some more games packed-in, or something. whatever it takes.

b23cdq

#29

b23cdq said:

They should start by making Club Nintendo available in the entire Europe, not just a select few countries...

McHaggis

#32

McHaggis said:

I don't understand why Nintendo don't try and do more to attract third-parties. Offer incentives like 1 year free licensing or something. Or visit the major franchises that are skipping the Wii U and offer either a guaranteed return or developers from Nintendo that can do all the porting work.

It just seems like they could be doing more than just working on first party games to try and make the console more desirable.

FullbringIchigo

#33

FullbringIchigo said:

how about paying to develop WiiU versions of some upcoming games yourselves, that might bring a few more publishers and developers to you if they didn't have to stump up the cost of a port, but it could cost nintendo a lot

also get rid of region locks

Great_Gonzalez

#35

Great_Gonzalez said:

I'm from the UK and it's sad to see Nintendo ever get the credit they deserve from "gamers" here I think it's a cultural thing.. And I think it will be very very hard to change

Icefreak45

#36

Icefreak45 said:

Glad to see Vita picking up some attention over in Japan. Give the US a price cut and the games as well and I'll pick one up.
Nintendo just needs to put out games, period. Apparently there's more unannounced games so maybe that will be the sales booster they need?

Jared1984

#37

Jared1984 said:

@Einherjar There's going to be a price cut within the next 6 months. Nintendo doesn't have a choice. $350 for a 32G, underpowered Wii U with piss poor 3rd party support or $400 for a 500G, significantly more powerful console with amazing 3rd party support. It's just common sense.

Realgamer4life

#38

Realgamer4life said:

Everyone who is screaming price cut I wish they would just stop it. It takes more than a price cut. to move your product.

Heres what they need to do. Every company has focus group sessions to find out what pushes people from all walks of life to buy their and other companies products. It's still not determined if Nintendo is doing this currently. But lets say they are not the internet is also their as well. If I have a company I would have people scouring the net just to see what people say about our company and what they want. Case and point Sony realized that people wanted more power and less the price and developers wanted a system that was easy to develope for with more power.

So Nintendo said they listened to what developers wanted did they tell Nintendo the same thing and they decided to go against the grain? If we dig back through the articles leading up to the Wii U release there was so much talk about Nintendo listening and working with developers were they led astray or did they say well we know they want this lets cut corners and give them this.

As long as Nintendo has been in business how can they still not know how to Cater to the US and European console market. These markets are all the same but different . There the same in they love their games but very different in how these games should play. For instance Japan loves Rpg, Jrpg and anime style games, Also they love quirky games and they will pick up other games here and
there. USA we love our american favorite pastime games, Sports, Racing sim, games, Games where things are blown up consistently and there is a lot of weapons.
Europe is the same as US gamers except their sports are different but everything else is pretty much the same. If you are going to sale a game system outside of your home territory do your research and recognize who you are selling to.

Remz

#39

Remz said:

how about releasing more games on the wii u instead of mainly focusing on the 3ds

S7eventhHeaven

#40

S7eventhHeaven said:

nintendo dont seem to realise that a lot of the market just want to be able to play the current new release games on every format and be able to choose. it might seem stupid to release xbox 360 and ps3 titles on the wii-u but if the titles were there for us to choose to purchase we would probly buy the wii-u since it would have its 1st party games and all the normal 3rd party games on the other consoles aswel. tomb raider, hitman absolution, metal gear revengence, gta 5 , battlefield 4, need for speed , dead island riptide, bioshock infinite. there is no technical limitations stopping any of these working on the wii-u its the lazy developers dont want to do any extra work.

S7eventhHeaven

#41

S7eventhHeaven said:

common sense. the developers wont support the wii-u until it gets support. we wont support the wii-u till it gets support

Remz

#42

Remz said:

common sense? i didnt say anything about other developers. why is it common sense to not have luigi's mansion or mario golf on the wii u?

8bitforever

#43

8bitforever said:

@Happy_Mask You are going to see this more often now. Sony has the Vita setup to remote play all PS4 games and be able to stream PS3 games. In addition they have a ton of great games coming out. I have both 3DS and Vita and honestly have only played my 3DS lately for Luigi's Mansion. Zelda is the only other game the rest of this year that peaks my interest but there is a long list for the Vita. It is a superior system and is finally getting the games to back it up. I think Nintendo really needs to focus on handhelds and really bring out something that can compete or the 3DS will suffer the same fate as the WiiU. The only reason it hasn't up to this point is because so many kids buy them for Pokemon, etc. Times are a changing and my beloved Nintendo is not learning from their past mistakes by bringing out hardware that is dated and not able to compete. This is the last generation that they will be able to get away with it.

jarvismp

#44

jarvismp said:

The first party games will be quality as per the norm, but Nintendo must improve their advertising and lower the price to get new sales. Nintendo direct is all very well but who watches it? People who already have the console!! You ain't going to get new users that way and that is a fact. Nintendo can either start a mass media advertising campaign now, or just forget it. Their advertising team should be sacked and iwata should be ousted. He has become narrow narrow minded and complacent and that has cost Nintendo dear. This is no longer a slow start for Wii u, but an on going issue that is simply not being addressed. If you walk into a games shop today, you will see a display for PS4 that is eye-catching and the console hasn't even been released yet. My local GAME hasn't sold a Wii for over two months! If that is not a major cause for concern, I don't know what is.

jarvismp

#46

jarvismp said:

When I was in the pub trade, I had to lower my beer prices which meant I made a loss at first but more and more customers came to the pub and I sold more and more sales, got more and more customers and made profits. Although a different industry, this is what Nintendo can and must do right now. It doesn't take a business genius to see this so why iwata can't see the startlingly obvious is beyond me. Advertise, Lower price, get more users, get Wii u back on track. None of this is hard to do and it WILL improve things!!!!!!! Please listen Nintendo, please listen.

XyVoX

#47

XyVoX said:

Look im 40 yrs old been a gamer since around 8 yrs old most of my friends are similar aswell now all of my friends including me dont own a Wii U most of the workforces involved with all of us dont own a Wii U why ? simple in discussion everybody sees it as WAY overpriced for what it is, and amongst my closer friends conclusion is: it is a modern console with OLD performance tech Mmmm well similar in performance to PS3/360 etc which are 7 yrs old Mmmm 32gb on board storage Mmm 250-500gb on the other consoles, old looking capacitive, rubbish battery life tablet/joystick which doesn't even allow you to play games at native resolution and the display (not even a 720p panel) very old hat indeed all for more money than a PS3/360 no thats not going to work thats for sure, and yes wee all love Nintendo as our favourite gaming company and yes we all bought most other Nintendo handhelds/consoles close to launch just not the Wii U.

b23cdq

#48

b23cdq said:

Release Mother Trilogy as retail/download for 40$. Not a remake, just the three original games on one disc. Would sell at least two million consoles, just with that alone.

Oh, and while you're at it, get Square to remake FF7 in time for your next console release. Would probably sell a few units...

8bitforever

#49

8bitforever said:

I love Nintendo and have since I started got my NES at 10 years of age, but let's face it, Nintendo is not learning from their past mistakes and each system they release is more lackluster. The gimmick of the Wii's motion controls were the only thing that held that system up. Even the DS was not a very good system when its specs are compared to the PSP. However, Nintendo had the games and that made the difference. Now, that is not going to help them. Even I am getting tired of the next Mario game. Mario 3D Land was unique and good, but New Super Mario Bros 2, Wii Super Mario Bros, and WiiU Super Mario Bros are weak. Nintendo refuses to do any great Metroid or Star Fox games, and their first Zelda on the WiiU is a remake of my least favorite Zelda games. Their future really is in jeopardy if they don't do something. I have a 3DS but haven't played it in months except for Luigi's Mansion. This Christmas I will be buying a PS4 to go with the Vita I bought earlier in the year. It has a 720 OLED display that looks fantastic and games that are so much better. I know that ultimately it is my opinion over others but I think the 3DS is holding the handheld market back. The lego games that get converted over to Vita are based off of the 3DS version and sometimes have their crappy cutscences. Luckily, some of the newer ones are ditching the 3DS cutscences and keeping the high quality ones from the console. Bottome line, Nintendo needs to go the way of Sega and make their IPs on other systems. They need to get out of the hardware business and leave that to other companies that are more foward thinking. I would love to play an HD Zelda on my Vita!

unrandomsam

#50

unrandomsam said:

Neither of the PS4/Xbone are anything other than really budget PC's. (Bobcat based core).

If the Wii U is used properly then it is powerful enough. (Nintendo should do what they did in the NES days (At least in the US) and say if it is on Nintendo then it cannot be on anything else. No point in having junk ports reflecting badly on the system).

Whether something is great seems to be not relevant to whether it makes money. TG16/Saturn/Dreamcast/Neo Geo - Those type of games are what I still want to play. Arcade games basically. (Not the modern definition that means pretty much anything. The one where it means ported (These days I expect perfectly) from an arcade machine that did well).

There is loads of stuff in the back catalog I want but I think they will try just releasing the same stuff again.

cogb1983

#51

cogb1983 said:

If you haven't noticed, the new "X" game seems to be multiplayer. Look a this video, specifically at 1:21. It clearly reads "player 2", "player 3" and "player 4". Is there something more "hard core" than a Xenoblade MMORPG?

micronean

#53

micronean said:

It wouldn't surprise if Nintendo deliberately did not go all out to market the Wii U yet, because even they knew they didn't have the software to promote.

...I also don't think Pikmin is a strong enough title to spend the marketing bucks on, either. They are going to have to wait (just like all of us) until the fall & winter to really get the ball rolling. It's just too bad it will be alongside the PS4 launch...maybe that's why they are sparing all their marketing ammo until then.

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