First off, it always sold everything at a per-product profit from day one. Games, consoles, everything. That made it hard for them to lose money unless they failed to cover development costs by selling too few consoles, for example.
Second, they had the only portable gaming system that was extremely popular worldwide and just as profitable.
Third, they had a huge 1st party game lineup that always brought a lot of fans.
Fourth, they were able to make a different kind of game than the rest of the industry. Generally gameplay and character based games instead of visual appeal / physics based games like many of the traditional major AAA games. This dramatically lowered their production costs. Add to that the lure of motion controls during the glory years of the Wii.
Compare, for example, titles such as Halo 3 or Call of Duty: MW2 vs Super Smash Brothers Brawl or New Super Mario Bros Wii. Halo 3 sold something like 12 million copies and MW2 sold about 22 million. Those are impressive numbers, pushing gross revenue up near the billion dollar range. However, these are also very expensive games to produce, due to all the art assets, voice acting, the complexity of the game, and so forth. In contrast Brawl sold about 12 million copies and New SMB Wii sold about 28 million. But what's the development budget on Smash Bros. or even New SMB Wii in comparison? They don't have the same high-def 3D rendered immersive, interactive environment requirements as a modern AAA FPS or adventure game, they have a pitiful amount of voice acting, and typically so little that internationalization is comparatively trivial, and they just aren't as complicated of games overall.
Nintendo was able to sell its quirky little gameplay centric games and earn AAA revenue on the back of fractional development costs compared to most AAA titles. That translated into, as they say, "printing money".
But there are some problems. People stopped buying Wiis and playing Wii games. So Nintendo felt they needed to come out with a new console to try to deal with the competition. Unfortunately, the Wii-U isn't a coherent or inspired design, it's just designed by a committee who has no conception of what's happening in gaming right now. The result is a sort of weird little HD Wii with a questionably useful tablet controller.
Meanwhile, the rest of the gaming industry has been changing a great deal. Digital distribution has become not just a part of the industry but has gained enough momentum to seem like it will be the future core of the industry. And partly because of that indie games have had a renaissance. Additionally, smartphones and tablets have inserted themselves as pillars of the mobile gaming market. And both Microsoft and Sony have produced better motion control hardware schemes than Nintendo has managed to develop.
Nintendo is now being threatened from every side. Its motion control advantage is now lost. Its quirky gameplay centric advantage is now under assault by a veritable army of indie game devs, some of whom can finance their games on kickstarter and sell them for $10 or less through digital channels. Its mobile gaming systems are finding it tough to compete with more advanced tablets and smartphones with burgeoning game libraries. And its persistent weakness in online communities and underlying game system OS technology has started to take its toll in an era where everyone is more connected than ever.
Almost nobody is seriously excited about the potential of the Wii-U hardware, it's boring and largely already obsoleted by other console hardware and by the Xbox One and PS4 hardware. Pretty much the only thing keeping Nintendo alive is their 1st party titles, but how much will that encourage people to buy into their console hardware, potentially at the cost of not being able to buy an iPad or either of the other 2 new consoles coming out this year?
The Wii-U has already had a huge price drop since launch about half a year ago and sales are still anemic, that's not a good sign considering that sales are unlikely to be better 6 months from now when the xbox and playstation next gen consoles are on the market, let alone after the next ipad rev. hits. If they were smart they'd transition into a software only company.
Edit: to add to this, I used to own a Wii (though I sold it after I realized I hadn't even bothered to turn it on for about a year), and I've used the Wii-U extensively. I love some of the games for the Wii-U but I'm not sure they have enough pull to get many gamers to buy a whole new console. Also, the Wii-U software is a nightmare. For a device that is entirely based on solid state storage it takes a remarkably long time to do anything. Also, the very first update for the console took an hour (literally, a full hour, regardless of internet connection speed). And the battery life on the gamepad is decidedly underwhelming, as is the lack of multi-touch. Overall these aren't good selling points to the average consumer, or even to the Nintendo enthusiast.
>The Wii-U has already had a huge price drop since launch about half a year ago and sales are still anemic, that's not a good sign considering that sales are unlikely to be better 6 months from now when the xbox and playstation next gen consoles are on the market, let alone after the next ipad rev. hits. If they were smart they'd transition into a software only company.
> Generally gameplay and character based games
> instead of visual appeal / physics based games
> like many of the traditional major AAA games.
> This dramatically lowered their production costs.
Are we sure this is true?
Refined gameplay is the result of many, many, many extra person-hours (and therefore money) of iteration, testing, refinement, and so forth.
It's one of the reasons (certainly not the only reason) there's (for example) a flagship Zelda game every 5+ years, not every single year like Madden 2013 or Call Of Medal Of Honorable Black Splinter Ops.
First off, it always sold everything at a per-product profit from day one. Games, consoles, everything. That made it hard for them to lose money unless they failed to cover development costs by selling too few consoles, for example.
Second, they had the only portable gaming system that was extremely popular worldwide and just as profitable.
Third, they had a huge 1st party game lineup that always brought a lot of fans.
Fourth, they were able to make a different kind of game than the rest of the industry. Generally gameplay and character based games instead of visual appeal / physics based games like many of the traditional major AAA games. This dramatically lowered their production costs. Add to that the lure of motion controls during the glory years of the Wii.
Compare, for example, titles such as Halo 3 or Call of Duty: MW2 vs Super Smash Brothers Brawl or New Super Mario Bros Wii. Halo 3 sold something like 12 million copies and MW2 sold about 22 million. Those are impressive numbers, pushing gross revenue up near the billion dollar range. However, these are also very expensive games to produce, due to all the art assets, voice acting, the complexity of the game, and so forth. In contrast Brawl sold about 12 million copies and New SMB Wii sold about 28 million. But what's the development budget on Smash Bros. or even New SMB Wii in comparison? They don't have the same high-def 3D rendered immersive, interactive environment requirements as a modern AAA FPS or adventure game, they have a pitiful amount of voice acting, and typically so little that internationalization is comparatively trivial, and they just aren't as complicated of games overall.
Nintendo was able to sell its quirky little gameplay centric games and earn AAA revenue on the back of fractional development costs compared to most AAA titles. That translated into, as they say, "printing money".
But there are some problems. People stopped buying Wiis and playing Wii games. So Nintendo felt they needed to come out with a new console to try to deal with the competition. Unfortunately, the Wii-U isn't a coherent or inspired design, it's just designed by a committee who has no conception of what's happening in gaming right now. The result is a sort of weird little HD Wii with a questionably useful tablet controller.
Meanwhile, the rest of the gaming industry has been changing a great deal. Digital distribution has become not just a part of the industry but has gained enough momentum to seem like it will be the future core of the industry. And partly because of that indie games have had a renaissance. Additionally, smartphones and tablets have inserted themselves as pillars of the mobile gaming market. And both Microsoft and Sony have produced better motion control hardware schemes than Nintendo has managed to develop.
Nintendo is now being threatened from every side. Its motion control advantage is now lost. Its quirky gameplay centric advantage is now under assault by a veritable army of indie game devs, some of whom can finance their games on kickstarter and sell them for $10 or less through digital channels. Its mobile gaming systems are finding it tough to compete with more advanced tablets and smartphones with burgeoning game libraries. And its persistent weakness in online communities and underlying game system OS technology has started to take its toll in an era where everyone is more connected than ever.
Almost nobody is seriously excited about the potential of the Wii-U hardware, it's boring and largely already obsoleted by other console hardware and by the Xbox One and PS4 hardware. Pretty much the only thing keeping Nintendo alive is their 1st party titles, but how much will that encourage people to buy into their console hardware, potentially at the cost of not being able to buy an iPad or either of the other 2 new consoles coming out this year?
The Wii-U has already had a huge price drop since launch about half a year ago and sales are still anemic, that's not a good sign considering that sales are unlikely to be better 6 months from now when the xbox and playstation next gen consoles are on the market, let alone after the next ipad rev. hits. If they were smart they'd transition into a software only company.
Edit: to add to this, I used to own a Wii (though I sold it after I realized I hadn't even bothered to turn it on for about a year), and I've used the Wii-U extensively. I love some of the games for the Wii-U but I'm not sure they have enough pull to get many gamers to buy a whole new console. Also, the Wii-U software is a nightmare. For a device that is entirely based on solid state storage it takes a remarkably long time to do anything. Also, the very first update for the console took an hour (literally, a full hour, regardless of internet connection speed). And the battery life on the gamepad is decidedly underwhelming, as is the lack of multi-touch. Overall these aren't good selling points to the average consumer, or even to the Nintendo enthusiast.