News Article

Satoru Iwata Explains "Conservative" Wii U Sales Projection of Just 3.6 Million Units

Posted by Thomas Whitehead

A target Nintendo "should at least reach" through MK8 and Smash Bros.

When Nintendo released its financial results recently, we highlighted the worryingly low projection for Wii U sales. While the 3DS is expected to sell around 12 million units over this fiscal year, Nintendo's estimate for its home console is just 3.6 million units — should that be accurate, the Wii U will have failed to reach ten million sales in around two and a half years at market.

With major releases such as Mario Kart 8 and Super Smash Bros. on the way, and with the Nintendo Figurine Platform set to make its début in late 2014, it's a number that doesn't inspire confidence. After multiple years of bold projections that weren't met, it was striking that Nintendo had swung towards safe numbers so drastically.

Naturally, shareholders at the investor Q & A queried this and, to a lesser extent, the 3DS figure that would result in its sales of the portable dropping a little from the previous year. Satoru Iwata highlighted that, after multiple years of missed targets, the company had laid out the minimum expected results for the home console.

We set the sales unit forecast of 3.60 million units of Wii U hardware as the target that we should at least reach by making the releases of two key titles for this fiscal year from the very popular, evergreen franchises that have been under development since before the launch of Wii U hardware, “Mario Kart 8” and “Super Smash Bros. for Wii U,” the pillars of our entire marketing strategy for this year. These two titles can be enjoyed alone or with others, and we believe they will encourage those who do not own Wii U hardware to purchase it.

...In setting our financial targets for this fiscal year, we have taken into account the fact that in the last fiscal year, we established a target of 100.0 billion yen in operating profit and set sales forecasts to achieve Nintendo-like profits, but we failed to show the results despite having worked hard to meet these goals, and Nintendo has now failed to meet its own financial forecasts for a few terms in a row, and in this sense, by trying to set rather conservative goals we are perhaps using conservative estimates about our unit sales. This does not mean that Nintendo 3DS sales will definitely fall this fiscal year when compared with the previous fiscal year. We have set our estimates for this fiscal year by considering the amount that we are confident we can reach, so it is my hope that we will also do our best with regard to Nintendo 3DS, too, and exceed its sales estimate. In order to show that Nintendo 3DS sales have not yet peaked out and are not to simply decline in the future, we want to exceed last fiscal year’s figures.

As for Wii U, we estimated 9.00 million units of hardware in sales in the last fiscal year, but many of you must be aware of the actual results, and the Wii U market has experienced a sharp downturn. In order to recreate momentum and sell 5.00 million or 10.00 million units of hardware annually, there are indeed challenges that we must overcome. And in the face of these challenges, announcing more optimistic figures before we actually release the Mario Kart and Super Smash Bros. titles to consumers, would not be compatible with our original stance to provide rather conservative figures, so once again we set our estimates by considering how much we could realistically hope to achieve with our software lineup. The fate of a video game system is often influenced greatly by the introduction of a single title. As many of you probably remember, before the release of the Pokémon game, Game Boy had been showing slow growth, and many people wondered whether it was the end of Game Boy. But the Pokémon game singlehandedly changed the landscape of the system, which then started to show the strongest sales in the lifecycle of the system. As I explained back in January, it is true that we cannot draw up a good business plan for Wii U by assuming that Wii U will sell more than Wii did. Therefore, we will need to think very carefully about the balance of revenue and expenses and try to operate by controlling overall costs. On the other hand, we do not believe that this year’s estimate of 3.60 million units of Wii U hardware will be the peak of its lifecycle, and we would like to work hard to make sure that we give sufficient momentum to the system so that we can expect good results in and after the next fiscal year, too. However, as for this fiscal year, as I explained before, the figures you see have been determined by rather conservative estimates.

Perhaps it's understandable that Nintendo is managing expectations, even if the degree of the "conservative" approach can be argued as too severe. Despite the narrow focus on these two titles Iwata-san has re-iterated that the company will "talk about other Wii U titles at E3", while "internal software development teams directed by Shigeru Miyamoto are committed to developing several titles that focus on offering unique experiences only made possible with the Wii U GamePad".

Are you pleased that Nintendo is keeping its goals for Wii U low in the hope of exceeding expectations, or are you concerned that it reflects a lack of confidence in the system's prospects this year? Let us know.

[via nintendo.co.jp]

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User Comments (60)

ToniK

#3

ToniK said:

I'm quite happy if it reaches that target to be honest. I like their approach though. The last goals were unrealistic. Cross my fingers and hope for a miracle :/

Yoshis_VGM

#4

Yoshis_VGM said:

I honestly think that 3.6 million is a realistic estimate. They learned from last year so I think that being conservative is a much better option.
This doesn't mean that the Wii U is a bad system though. It's a great console and it's unfortunately extremely underrated, partially because all of the fanboys claiming how "weak" the hardware is. It may never achieve amazing sales, but that doesn't change the fact that the Wii U is a great system.

Captain_Toad

#5

Captain_Toad said:

Heh, better than the 9 million margin that you had set previously, seriously Iwata what were thinking about that number?

XCWarrior

#6

XCWarrior said:

I just hope they exceede it and get to 4 million. You have MK8, SSB4, X, Bayonetta 2, Hyrule Warriors, maybe FE x SMT and..... that's it.

So 5.5 games to be released on WiiU in FY2014. Selling 4 million is going to take some work. I know a game or 2 more will be announced at E3, but won't be anything major. Zelda is Xmas 2015 at best.

ricklongo

#7

ricklongo said:

@FalconPunch They actually tend to make a lot of money on those games, which is why they are sitting in so much cash right now. That's the reason why they can withstand their current woes, but the current panorama certainly can't last if the company hopes to remain in good health.

Mahe

#8

Mahe said:

This is a realistic estimate for Wii U's current SKU configuration. However, there is still a chance that Wii U might fall short of even this goal, as it is.

Mahe

#10

Mahe said:

@ricklongo They're not making all that much money on those games on the Wii U right now. Sales of all the games are massively down from their Wii predecessors, while development costs have gone up, and they also have significantly fewer games than they had on the Wii, both of their own and from third parties. Even what profits 2DS/3DS are producing, the Wii U eats up.

C-Olimar

#11

C-Olimar said:

"worked hard to meet these goals"?

I saw not a single advert for major, audience-expanding releases such as Wii Fit U, Wii Party U, MarioSonic Olympics, Game and Wario, Donkey Kong and Wii Sport Club. This is not trying hard; this is resigning to fate.

Also, the total lack of interest in using GamePad features by Nintendo is also pathetic.

Questions for anyone not in the UK: did you see any adverts for these titles? How often do you see Wii U adverts?

Nintenjoe64

#12

Nintenjoe64 said:

i hope he aimed low so he can be seen to beat expectations rather than because he plans zero effort to sell it

C-Olimar

#13

C-Olimar said:

My opinion on this estimate is that it is too high. The way they're going (especially with Iwata and Shibata in charge) they're looking at 2.5 million at best.

ricklongo

#14

ricklongo said:

@Mahe I know, that's what I meant with "the current panorama". I was just pointing out that it is not true that they don't make money on their great games as a rule of thumb.

ferrers405

#15

ferrers405 said:

At this pace even with MK8 and Smash Bros WiiU will suffer to sell this 3.6 million, unfortunately...

Nintenjoe64

#16

Nintenjoe64 said:

@C-Olimar
Seen 1 DKCTF advert this year, 1 Lego City advert last year and 1 ZombiU ad in 2012. I also saw a couple 3D World ads at Xmas.

3.6 million should easily be beaten if they advertise.....

edit - i'm from uk

PJR0cks

#17

PJR0cks said:

well, I truly believe that although Wii U won't be Nintendo's biggest success but it will reach around 30 mil by the end of it's life, yes I said it 30, more than GC, equal to 64. yes it will be third in the console war but, it won't be the disaster the media and fanboys are trying to make it. if like Iwata said it gains momentum it will easily reach 8 million a year and that will be enough to get to where it needs to be.

C-Olimar

#20

C-Olimar said:

@Nintenjoe64 I remember the Lego City ads, and I vaguely recall a Donkey Kong ad. I remember thinking "where's the cool new features only possible on this console I paid £300 for?".

It seems the only recent games they've bothered with are Wind Waker and 3D World. No doubt they'll blitz the public with a MK8 campaign, which will most likely be met with a resounding "meh".

gatorboi352

#22

gatorboi352 said:

@C-Olimar I've thrice seen a Wii U commercial here in the states. All 3 times on Nickelodeon or Cartoon Network.

Meanwhile, I stumble @$$ backwards into X1 and PS4 adverts left and right. Hell, SportsCenter on ESPN is even sponsored by those consoles from time to time.

gatorboi352

#23

gatorboi352 said:

"“Mario Kart 8” and “Super Smash Bros. for Wii U,” the pillars of our entire marketing strategy for this year"

When you're banking the entirety of your marketing strategy FOR THE ENTIRE YEAR on two (2) games, you're doing it wrong. I mean hell, that's more or less how they got into their current position as is.

GalacticMario28

#24

GalacticMario28 said:

I'm fine with these conservative estimates; it's better to be safe than sorry, and low estimates leave room for pleasant surprises.

PJR0cks

#25

PJR0cks said:

@kobashi100
well not that I need to explain myself to you, but a Company that had it's last generation Console sell over 100 million, won't sit back while the current gen sales 10, what you don't understand is Nintendo didn't think things with turn out the way they did initially, and now it's desperate and it will find any possible way to boost sales, you will see.

kobashi100

#26

kobashi100 said:

@PJR0cks Nintendo can try what they want. They are not selling 8 million consoles a year.

That 100 million wii crowd has long gone. Doesnt take a genius to work that out.

FJOJR

#28

FJOJR said:

Package them without the useless Gamepad and drop the price and that number should go up.

Kirk

#29

Kirk said:

Well it just makes good sense to under promise and over deliver imo, expectations are set lower and therefor more people are made happier when you exceed them (especially shareholders and investors etc), and I can't for the life of me think why any business would even want to do it the other way around.

Remember that episode of Star Trek where Scotty mentions how he always gives the captain a timescale that's longer that it would actually take to do the specific repairs...

Well; that's just smart.

2Sang

#30

2Sang said:

I think it's about right. I don't think they'll break 10 million wii us by the end of the year.

Hy8ogen

#31

Hy8ogen said:

I seriously hope Nintendo will turn this around. I really love my Wii U and really am hoping more games will get on the console. Come on Ninty show us what you're made off!

Previous years they have bold estimates, but conservative actions. Hopefully this year will be the opposite ;)

rjejr

#32

rjejr said:

He's taking about the fiscal year ending March 31, 2015 correct?

Well either he doesnt think SSB will be out much before then, or he thinks the 3DS version will kill sales for that game. Well not so much kill sales for the Wii U version as kill people buying hardware to play it. 2m current Wii U owners may still buy it when it releases, but non-Wii U owners may just buy the 3DS version.

And w/ MK8 coming out May 30th - Hurray! - "if" SSB comes out after Christmas, not a lot of people will buy a Wii U for Christmas. Could be a really good year for 3DS Family at Christmas if they drop the price and bundle in SSB. I still say a lot of kids under 12 who love Pokemon and own a 3DS haven't played Ruby or Sapphire so that could help DS sales as well.

Wii U may sell more in May-June than Nov-Dec. And that wouldn't be good.

Some console has to sell well this holiday, X1, PS4, Vita, Wii U, 3DS or Apple and Amazon win.

Superiorspider

#33

Superiorspider said:

With the way Nintendo is doing things as of now, the only way they will get to 3.6 million units is in Iwata's dreams.

ultraraichu

#34

ultraraichu said:

That's a good estimate. When you set it high and make less, it makes for bad press. If you set it low and make more, at least double, It makes for good press, or at least a better headline.

Zach777

#35

Zach777 said:

All that just to say; "we went with the low ball numbers cuz all we got is drivin Mario and fightin Mario with friends. Oh and go buy our play figures cuz you can use NFC finally."

Nintendo has great potential but sadly is underutilized because the big dogs in the head seats don't truly care.

HopeNForever

#36

HopeNForever said:

IGN apparently gave a greater focus on the "one title will make a difference" when they reported this statement of Iwata's. Talk about a great difference in tone between articles on dedicated websites like Nintendo Life, and eye-grabbing weasel-writers of IGN!

Hy8ogen

#37

Hy8ogen said:

@Yoshis_VGM People may call me delusional or a crazy fanboy, but I would really wanna see Nintendo getting 1st place this gen and watch those fanboys eating their own socks. It's still not too late to turn things around, we'll have to see how's Nintendo going to pull this off.

Don't get me wrong I love both Sony and Nintendo equally (sorry Xbox), but those Sony Fanboys are really getting on my nerves lately.

Rect_Pola

#38

Rect_Pola said:

Here's hoping they at least meet that. Poor Wii U. It's a perfectly nice little system, but that's about it. The big thing to make it more fell flat, largely before a much nicer system and whatever Xbone is even joined the party.

Boxmonkey

#39

Boxmonkey said:

Does this mean that we won't be getting anymore first party titles before may 2015?

Other than MK8 and SSB

Mahe

#41

Mahe said:

@kobashi100 The Wii crowd is still there on the Wii. Wii sold more games last FY than Wii U, despite very few new releases, and Nintendo putting all their shots on the Wii U. Nintendo just messed up with the Wii U, delivering the inane Gamepad and poor games like Nintendoland and Wind Waker HD, while rushing potential hits like Wii Party U and Wii Fit U to the market in hopes of cashing in on them, instead of delivering Wii-like quality. The Wii crowd is still hungry for new games, but Nintendo abandoned them.

electrolite77

#42

electrolite77 said:

Translation-"I got my behind kicked for that ludicrous 9million prediction I made when I was very drunk, so I'm not making that mistake again"

electrolite77

#43

electrolite77 said:

"Therefore, we will need to think very carefully about the balance of revenue and expenses and try to operate by controlling overall costs"

Translation-we won't be spending much on Wii U software

mostro328

#45

mostro328 said:

I hope for them to surpass this goal but I mean understandable lack of marketing really screwed this gen up for Nintendo

just imagine If they would've dumped the wiipad (which I like don't get me wrong) and in exchange upped he power under the hood to match that of the competitors with a year head start that would've been great

IceClimbers

#46

IceClimbers said:

Conservative numbers for both systems. Good.

Hoenstly, at this point Wii U sales don't concern me anymore. They're gonna be bad no matter what. 3DS sales are more concerning, as the system may have already peaked and can decline. It's fighting a tougher battle than Wii U, and Nintendo knows this.

Wii U's poor sales are a minor thing. Iwata is looking at the big picture here, and does seem to know what he's doing. Nintendo has to expand beyond video games to not only survive, but thrive.

DualWielding

#48

DualWielding said:

I think they would fail to release SSB Wii U in 2014 which would result in then not even meeting the 3.6 million estimate...... the only way they'll reach that number is if SSB launch in December

Crimson_Ridley

#51

Crimson_Ridley said:

@Boxmonkey It certainly sounds that way, which is a massive mistake. 2014 is incredibly important for Nintendo, as the other next gen consoles are getting integrated in to the industry.

Splatom

#52

Splatom said:

I feel really sorry for the Big N, as all the great games they put out are being ignored by the 'hardcore' gamers who play COD. :'(

Laxeybobby

#54

Laxeybobby said:

I think they will be lucky to achieve that number. The WiiU in the UK especially in my region is non existant and may as well be dead and berried in the dessert along with Atari's ET games!
No one on the Isle of Man now stocks current Wii U titles with our only Game store replacing the WiiU disc games with download cards. Thus saving space to be used by the other two consoles.

Not-Another-Ad

#55

Not-Another-Ad said:

Long as they advertise on TV at prime time, billboards, Bus's and ads in newspapers, they should do well.
Wii U does deserves to sell well.

ThumperUK

#56

ThumperUK said:

Super Mario 3D World should have been the killer game for the system, with MarioKart later. WiiFitU has had NO adverts at all in the UK (I'd doubt elsewhere either). Advertising spend on 3D World was pathetic and pretty non-existent when it could have been a big Xmas console seller..

Nintendo has shown that they have absolutely no faith in the system because they have not marketed it at all. Pure & Simple, you need to advertise to sell. Xbone and PS4 have had hundreds of ads on mainstream TV to every single WiiU one. The WiiU deserves better than the long death Nintendo seem to have for it. A low sales projection is wise for this year but shows how little faith they have in the system's future. Little wonder 3rd parties have deserted the platform completely (safe for Indie's).

There are now enough great disc games AND wonderful Indie games on the system for a major advertising push. Indie games alone can make this a great 2nd console. This 'could' rescue the system (and repay the faithful Indies by an increase in sales of their games).

RedYoshi999

#57

RedYoshi999 said:

I could complain about advertising, but since I barely watch any TV shows with ads I wouldn't exactly notice Nintendo's efforts. Plus no game company ever really advertises their products in Australia. In fact, the only game ads I've seen on TV this year is for Yoshi's New Island (also popped up as a Youtube ad.) I don't really see TV ads as a big magical thing that will cause millions of people to buy a Wii U.

Gamecubii-64DD

#58

Gamecubii-64DD said:

@kobashi100 You mean 10 million. Sorry but I have more and better classics on my GCN, besides I've got Luigi's Mansion. I'll stick to my trusty 'Cube.
(not to mention the gamepad isn't very comfortable)

darklinkinfinite

#59

darklinkinfinite said:

I think this really shows why Nintendo won't be able to build any real momentum for the Wii U; they're basically banking on 2 games more than 6 months apart. The Wii U has a bunch of good games but its getting a worthwhile retail game months apart and you really should be seeing 2-3 worthwhile retail games a month. Those numbers can't possibly be reached without third-party support but Nintendo seems to be the only one making Wii U games.

The lowered sales projections make sense but I'm not hearing anything from Nintendo describing any plan to improve the Wii U's situation. This statement's basically saying "our two big guns should help us reach these incredibly reduced numbers.". That's fine but I would love to hear about Nintendo meeting and working with third parties to find a way to bring more games to the platform instead of Nintendo thinking it can do anything significant by itself.

dumedum

#60

dumedum said:

Ninty will sell more. I agree that smash and kart will set the tone. Good thinking iwata.

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