Nintendo's recent financial briefing has put the dismal performance of the Wii U into sharp focus. Since its launch in 2012 the console has struggled to attract an audience and has sold just over 13 million units worldwide - a far cry from the performance of its forerunner the Wii, which shifted over 100 million consoles globally.
The Wii U hasn't just impacted Nintendo's bottom line, however. The name Renesas Electronics might not be all that familiar to gamers, but this Japanese firm has been so badly hit by the failure of Nintendo's console that it has withdrawn from the games market altogether.
The story of Renesas goes way back to the glory days of the Wii. Back then, NEC Electronics made a fortune producing chips for Nintendo's console. Around 2008 NEC decided to upscale the output capacity of its Tsuruoka plant, expecting the good times to keep on rolling and the Wii's eventual successor to be just as popular, leading to more demand for chips and more profits.
NEC Electronics was consolidated into Renesas Electronics - a joint semiconductor business which also included Hitachi and Mitsubishi Electric - in 2010, but the decision to expand the plant at Tsuruoka would have long-term ramifications for the new company.
When the Wii U arrived in 2012 and sold poorly, Nintendo's semiconductor orders decreased and the additional capacity at Tsuruoka needed to be filled. Faced with unused plant capacity, the company management then became "obsessed with getting as many orders as possible, regardless of profitability," according to a former Renesas employee. This included work for automotive clients which proved to be loss-making orders. These orders have since been transferred to a Renesas factory in Ibaraki following the sale of the cutting-edge Tsuruoka facility to Sony and TDK.
While the folly of Tsuruoka and its upgraded production lines - lines which it was hoped would produce chips for the Wii's glorious successor - has been consigned to Renesas' history, the legacy of the Wii U's failure continues to haunt the company. In 2013, Renesas decided to stop operating in the gaming and smartphone market due to volatile conditions, but production for the unprofitable orders placed to maximise capacity at Tsuruoka is still growing and is expected to reach a peak during this fiscal year.
Nintendo has apparently stated that it is taking final orders for the Wii U in 2016.
Thanks to SLIGEACH_EIRE for the tip!
[source asia.nikkei.com]
Comments 46
I wonder what happens if a chip producer goes bankrupt. For example, if one of Nintendo's chip producers goes away, does Nintendo have documention enough on all the parts so that they can keep console production running by letting another producer make the chips instead?
So many companies got burned by Wii U. I'm sure some people forget or aren't aware that while it has Nintendo written on the box, it is in fact a huge amalgamation of companies efforts that go into creating the final product.
There were plenty of other companies that took a hit on Wii U: AMD, IBM, ATI Technologies, Panasonic and Sharp to name a few. But they're the larger more well known companies and they'd all be in a better position to take the blow.
@SLIGEACH_EIRE Yeah, at least one!
In terms of reputation I think the Wii U sits comfortably along the Virtual Boy, Nintendo really dropped the ball there.
I really really hope the Switch can turn tables and if not a massive hit, at least a decent console that brings back some good will to the company.
It's hard to have too much sympathy with companies that put all their chips into the video game market without seeing just how unpredictable and volatile it is. A company like Nintendo or Sony can go from hero to zero in a moment. Both companies understand this by now and mitagate for losses, but it seems like many others never get the memo, or are only looking for short term gain.
@Kmno Uh, I think the GameCube is a much, much better comparison...
I love the Wii U - It has ~ 20 must play titles which is more than a lot of consoles in my opinion. Too bad it bombed financially. It will always have a place on my TV stand, and in my heart.
I love the Wii U, it is probably my favourite Nintendo console to come out of the company since the N64, but Nintendo really failed to make people realize that this console was indeed a new console, and to advertise it.
I still talk to people (people my age that are parents and don't know much about gaming now a days) that have easily heard of ps4 and xbox one, but didn't even really know the Wii U existed, and always ask me what kind of features it had and if it was a updated Wii! I think the Wii U could have been a bigger success if Nintendo just named it something other than Wii U, the system might have actually got more sales than it did. Also, the advertising for the system was pathetic! Only time I seen a commercial was on cartoon channels, and only lil' kids with no money watch those kind of networks! Would have been smart to also have commercials during family tv shows, to get parents aware of the system.
Hopefully Nintendo has learned from there mistakes, and hopefully the Switch is a success for both manufacturers and consumers.
The WiiU was a commercial/financial failure... but as a piece of hardware, it is fantastic and works perfectly (unlike the Virtual Boy).
Everyone that I know who is into Nintendo games (especially with children) owns a WiiU... after I explained to them what it is and why it is a great deal (uses existing Wii controllers, plays Wii games also, etc).
And "off-TV play" is a system seller for me... no need for any other use of the Gamepad screen (but maps and inventory are a real benefit for some games).
Nintendo, however, didn't properly explain that to the masses...
Hopefully the WiiU was just a stop-gap/practice for the Switch.
Amazing hardware, awesome exclusives...just couldn't get that customer backing. Still my favorite system.
Not entertaining... are you nuts? MK8 and SSB4 are two of the most entertaining games I have ever played... and multiplayer 3DWorld and NSMBU are fun as hell (albeit a bit uninspired)... plus all of the other first party games, a few third party games, and some eShop gems (Starwhal, NES Remix, Sportsball, Steamworld, FAST, Affordable Space, etc).
So basically they got reckless and than when things went south they made it even worse.
I do feel bad for them getting burned by Wii U but it sounds like they handheld the situation very badly.
@SaKo Game Cube had a great 1st party library. A decent 3rd party support. Not the best sales comparing to competitors but had solid numbers regardless. I think the comparison is only fair when you put it next to a massive success such as Wii, SNES and DS, then Game Cube looks like a failure.
Wii U doesn't even have half of the GC strong 1st and 3rd party lineup. The concept wasn't the only point that led it to failure...
Okay, now I REALLY have to grab a WiiU soon. If now just realized Nintendo exclusives and the eShop wiiu exclusives that I KNOW won't be on the Switch.
Poor Wii U. It's a huge shame that it didn't end up selling well, because it's a really nice console, despite it's flaws. Hopefully, it won't end up being a forgotten console.
It's a huge shame what happened to Renesas as well.
Wow....
Very understandable though.
@Aurumonado My stand has a place for my Nintendo Gamecube, Nintendo Wii U, Sony PlayStation 3 and a space is already reserved for the Nintendo Switch.
@Kmno the Virtual boy has no competition for the Worst, i think it only had 22 games (only 14 in NA), and no great ones at that. The Wii U while a commercial failure did produce some of the best (if limited) software Nintendo has made, it also gave us Splatoon, so we should be grateful for that.
@Kmno Sadly the Wii U has some of the top rated games from Nintendo on it, but no one played the system. It was also hurt by most of the best of the Wii U being released in some form on 3DS.
We also forget that the Gamecube also was selling poorly until Nintendo dropped the price to $99 and put some of the best early software out there for $19.99-29.99. Even then third party support was quickly scaled back as multiplat games sold poorly on the system, and Nintendo had to pay mercenary contracts for exclusives.
Perhaps had Nintendo been able (or willing) to do the same for the Wii U, the fate would not have been so bad for it.
@Captain_Toad In all likelyhood, unless those eshop games used the gamepad in any significant way, they will most likely (Id hope) be moved to switch, I hope eshop integration happens.
The Wii U reminds me of the Sega Saturn, which I got shortly after its launch in the USA. It's a system that didn't sell well and was poorly marketed, but is loved by many of those who owned it. It's actually because of the Saturn that I was already familiar with Renesas. As Hitachi was a part of that joint venture, Renesas took over the Super H line of processors most well known for the Saturn and Dreamcast/NAOMI, and I believe they saw continued use in automotive applications beyond that.
The Wii U is significantly more satisfying to me than the N64 or Wii ever were. Still doesn't match the NES, SNES, or Cube, though.
@yomanation
Definitely an opinion, not a fact.
@Kmno uh, no. Wii U has seen a number of hit games and helped usher in the whole off-TV play idea. It didn't cause eye strain and headaches. And at the core of it all, Wii U was a perhaps unsuccessful (by industry standards - outside it, 13 million units still indicates sizeable resonance with the public) yet finished concept. Virtual Boy was released before Yokoi was done with it. We know how it ended.
@SLIGEACH_EIRE ATI and AMD is the same thing lol
@SLIGEACH_EIRE I think IBM and AMD/ATI did fine with Nintendo using their chips from GameCube through Wii U.
@SPG True.....now.
And people wonder why third-parties turned from the Wii U...
@BiasedSonyFan I don't share the same opinion. You see, in the first-party department, the GC had TWO mainline brand new Zelda games, Four Swords, TWO DK games, Mario Kart, F-Zero, TWO Pikmin games, TWO Metroid games, Luigi's Mansion, Mario Sunshine, Eternal Darkness, SSB Melee, Animal Crossing (not some amiibo festival), TWO Star Fox games, TWO Pokémon games, Kirby, Paper Mario (one of the best entries to date), Fire Emblem, Wario World, Chibi Robo and Wave Race.
It's already more quality titles than what Wii U ever had to offer.
I just hope Nintendo don't go too greedy and make us buy external storage as it saves them money.
Bigger batteries for us to buy separately so they save money.
Buy separate adapters for both dock and tablet so they save money.
I really think that the WiiU needed a game that could have sold people on the gamepad. Had Mario Maker been a launch title, I think that would have been the game to go with.
Personally, I didn't like Nintendo Land. I let my 2 nephews play it and they weren't impressed either. Yet they both love playing Mario Maker.
Great article. I like how it makes you think: if I had a tech business, would I want to upscale based solely on the hopes that the marketing of your primary business partner is good enough?
As a Nintendo fan though, Wii u has been a lot of fun.
The ups and downs of business. Such a ferocious beast.
Just to name a few...
Bayonetta 2
Captain Toad
Deus Ex Human Revolution (Great use of gamepad)
Donkey Kong Tropical Freeze
Fast Racing Neo
Fatal Frame Maiden of Blackwater
Hyrule Warriors
Legend of Zelda Breath of the Wild
Legend of Zelda Twilight Princess HD
Legend of Zelda Wind Waker HD
Mario Kart 8
Monster Hunter 3 Ultimate
Need For Speed Most Wanted (Great use of gamepad)
New Super Mario/Luigi Bros U
Pikmin 3
Pokken Tournament
Rayman Legends (Best version)
Shovel Knight (Unquestionably the best console to play it on)
Sonic Lost World
Splatoon
Star Fox Zero
Super Mario 3D World
Super Mario Maker
Super Smash Bros U
Wonderful 101
Xenoblade Chronicles X
Yoshi's Wooly World
ZombiU
Plays all Wii games
It's because Nintendo doesn't focus on games and keeps trying to reinvent their console all the time. Focus on releasing good games Nintendo!
Renesas.... still mad at then for their poor implementation of USB 3.0 in Intel motherboards.
It's easy to forget just how much is at stake with a company as big as Nintendo. Even though it's just a video game company.
It's almost like there is some sort of risk involved in business decisions. Weird.
13 million may be pale compared to other consoles by a long shot.
But when you think about it, that's still quite a number of units produced and sold.
Wii U will go down as one of the most underrated consoles.
Completely mismanaged, and under utilised.
@TechJunkie69
Deus Ex Human Revolution (re-release)
The Legend of Zelda Twilight Princess HD (remaster)
The Legend of Zelda Wind Waker HD (remaster)
The Legend of Zelda Breath of the Wild (dual release)
Need for Speed Most Wanted (re-release)
Rayman Legends (re-release)
Shovel Knight (re-release)
Most of these are re-releases on a different console, so you don't need a Wii-U to play them. And arguing that the Wii-U is the best system to play these games on is highly subjective.
2 of those Zelda games already existed on prior Nintendo consoles, and could be played on the Wii, so those aren't really reasons to buy a Wii-U.
As for Breath of the Wild, it was a game that Nintendo promised to release on the Wii-U a loooooong time ago, but eventually delayed, just for a simultaneous release on both systems, which is a really bizarre reason if you ask me.
The fact that it played Wii games was a plus, I will admit, but you might as well stick with a Wii, if you're looking for a new console to play your old Wii games on.
@subpopz I think that the name only added to the confusion when Nintendo initially revealed the Wii-U at E3. Remember, they put a lot of focus on the pad, and at some point, even showed the pad resting on the Wii zapper peripheral. Calling their new system the Wii-U didn't really help them in that regard.
What really did them in with the Wii-U, though, are the long dry spells in-between high profile releases AND the fact that they released without many important launch titles.
@G_M
Deus Ex Human Revolution (Port with gamepad enhancements)
The Legend of Zelda Twilight Princess HD (Remaster with gamepad enhancements)
The Legend of Zelda Wind Waker HD (Remaster with gamepad enhancements)
The Legend of Zelda Breath of the Wild (Dual or not, it's coming to it)
Need for Speed Most Wanted (Port with gamepad enhancements)
Rayman Legends (Designed with gamepad enhancements in mind)
Shovel Knight (Initial release with gamepad enhancements)
Corrected. Odd that you single out games with some of the best use of the gamepad (BotW excluded since we don't know yet).
The gaslighting for this console is so absurd. The console was a failure. The market says so and your beloved tin god has admitted to it as well. If you enjoyed it, great, I'm thrilled for you (and I promise you that isn't sarcasm), but have the good grace to accept fact as fact: in terms of market performance, versus its competitors, versus its predecessors and versus its projected sales internally, the Wii U was a abject failure from start to finish. Full stop.
@yomanation 'That's how cult classics work. Only a few people buy them, so they circlejerk over them for years once they find like minded individuals. It's undeniable that Wii U has some good stuff, so it's not like it has zero merits. It's just nowhere near as good as it should have been. People that praise it in a few years will blow its positives out of proportion and underplay the negatives. That's how it always is. Same could be said for Dreamcast, Beyond Good & Evil, and anything else with a cult following.
For me, Wii U is as close as it ever got for me to abandon Nintendo, and that's saying a lot, because I've been a loyal fan since '90.'
A thousand times this. I loved the Dreamcast, still do, and I recognise that it was a failure in any objective estimation of its performance. Did it have some great titles, even fantastic ones? Yes, absolutely. Was it a failure? It's performance ended SEGA's presence in the hardware market, so that isn't a serious question.
@Alundra-1998 My stand is virtually identical; the only difference is my Wii is the machine hooked up for GameCube games.
Rant and rave time. Love the WiiU system and concept, devs just didn't utilize it well most of the time. Which is really too bad, I wish we saw more async play like the Luigi's mansion and Mario Catch mini games.
And while Nintendo isn't competing in the graphical horsepower race, I think it doesn't help Nintendo's image when they skimp on hardware, primarily thinking of the basics, 8 GB hard drive space for the standard console is ludicrous. 32GB is a bit ludicrous as well. It's nice that it could be expanded with an external hard drive, and yes Nintendo was experimenting more with digital sales, but the average consumer won't bother and then they lose all the potential curiosity buys they could've gotten (and when the OS takes up close to that 8GB, you know something is wrong). The point is don't skimp on basic and core components (like HDD and RAM). It makes the company look cheap and gives consumers legit complaints, as the basics are needed to be able to play games smoothly. Kind of like Nintendo's claim to not sell the Switch system at a loss. 1) Don't tell the consumers that. 2) you look cheap cause other companies are willing to do it 3) please don't cut corners to gain a tiny bit of profit when it can largely affect your consumer's willingness to buy your product and be satisfied with the purchase.
I'm a nintendo fan, always have been, plan to continue in it. I'm probably being too harsh. The hard drive memory thing is a bit inexcusable though, and if they skimp with the Switch or if they sell too high, it could prevent it from selling to the masses. I do hope they do well. If you need to sell at a loss to get it out in the wild and into the hands of non-gamers or non-core/non-nintendo gamers, I recommend they do it. You can only have runaway successes like Pokemon Go if your audience/install base is as large. If the adoption rate is too low, it limits the potential for profit and hence 3rd party support, etc etc.
I don't take much faith in the speculation and rumors, but if the Switch had 32GB but it was SSD, that could work since it's portable and it's special high speed memory with real benefit. Else, I'm perfectly content with standard microSD card slot (since that's cheap and easy and doesn't involve 2 USB ports like an external HDD), but the rumored capacity of 128GB is a bit low. 256GB min support would probably be best (since 3rd parties can sometimes have very large games, though ideally those would be more compressed).
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