Console gaming – Then there were two

Wii U looks like it is dead in the water.

• Despite a nine month lead and a lower price the Wii U has been decimated by its bigger brothers who have only been in the market for a week or so.
• The company is stubbornly sticking to its 9m unit shipment forecast (year to March 2014) despite widespread scepticism and consensus forecasts of just 6m units.
• Shipments are pathetically low at 460,000 units for the six month period ending September 30^th.
• This leaves 8.54m units still to be shipped in the next 6 months in order for the company to make its targets.
• This is now going to be much more difficult as the PS4 and the Xbox One each outsold the Wii U by a factor of 2x within 24 hours of launch.
• To be honest I will be surprised if the Wii U sells more than a 1m units for the year to March 2014.
• The problem is very simple.
• When the original Wii was released it was ground breaking and redefined an era of console gaming with the accelerometers inside the controllers.
• This allowed users to interact much more deeply with the games and turned out to be lots of fun.
• As a result, users were very happy to overlook the fact that the Wii was an underpowered system with graphics that looked like Atari from the 1980s.
• Unfortunately the bigger systems have cottoned onto this and now there is nothing that sets the Wii U apart from its bigger brothers other than price.
• Furthermore, at $299 the gap is not nearly large enough for users to be remotely interested.
• The Xbox One with the Kinect add-on is now far ahead of what the Wii U can offer, which combined with its vastly superior gaming capability and the ecosystem around it, offers far more value for money.
• The same can be said for the PS4.
• Hence, I suspect that this is the end of the road for Nintendo consoles.
• If management is smart (no guarantees here), there will be no successor and it will refocus on areas of gaming where it can make a difference.
• Unfortunately, I suspect that Nintendo will fight it out to the very end meaning huge losses and a collapse in the share price.
• This will leave Sony as the only Japanese company with any chance of making it in the new world of consumer electronics.
• At the moment, even that is a long shot and I would be very patient before jumping in.
• Microsoft and Yahoo! look like much more interesting options.