With a new Wii, new problems for Nintendo

November 23, 2012

Just in time for the utter madness of Black Friday, Nintendo has released an extraordinarily complex successor to its Wii, grandma’s favorite videogame console. The Wii, which made gaming accessible to every demographic through ease of play, is no joke. As of the end of September, it had sold 97 million units worldwide.

So what of this new machine? Reggie Fils-Aime, Nintendo of America’s swaggering president, has been hitting the road to promote the Wii U, a machine without the simplicity of the intuitive Wii. The Wii U is a kind of videogame console meets iPad. Its not easy to learn, and it’s a big gamble for the Japanese company. Replicating the Wii’s success is a nearly impossible task that even Mario with all his Power-Ups would find daunting.

A full year prior to the Wii’s release, Nintendo’s stock began to rise amid an elated, buzzy excitement in the press. The gauzy coverage said the Wii’s motion controls will yield a fascinating experience the whole family will love. By the time the Wii hit the shelves in November 2006, Nintendo’s stock price had more than doubled to over $28. A year later, at its high, it rocketed to nearly $77 a share. Not only did Nintendo make money on games, it made money on the Wii, which was cheap to produce. The Wii became a trend that doubled as a lifestyle choice. You could play Wii Sports with your family, and you could exercise with apps like Wii Fit.

In 2012 the world is quite different. A recession has hit the videogame industry, one that has led to numerous game studio closures. When people stopped buying the Wii in droves, Nintendo’s stock price retreated to pre-2006 levels. In the year leading up to the Wii U’s release, shares had fallen by almost 20 percent, from $18.66 to $15.52 last week, in part because Nintendo will lose money on each Wii U sold. (In the last day of trading before the Will U’s premiere, the stock passed $16. After a one-day bump, it declined again.)

This turn of events has severely stressed the business gurus at Nintendo. In 2011 at San Francisco’s Game Developers Conference, Satoru Iwata, Nintendo’s president, railed against developers who make inexpensive mobile games for the iPhone and iPad. “Game development is drowning,” he warned, before laying into mobile game makers as if he were Tom Coughlin chiding the New York Giants after a disastrous loss.

Then, in a stunning turnabout in June of that year, Nintendo unveiled a Wii U that mimicked tablets. The Wii U’s controller has a touch screen. It’s not called an iPad, of course. It’s called a GamePad.

At Nintendo’s events over the past two years, I never quite understood the GamePad. Did you use all of the buttons and the touch screen with each game? Did you use the touchscreen only? How did you use the touchscreen in tandem with your TV? For me, the Wii U was too confusing. And with the emulation of the iPad, I felt Nintendo was following, not leading.

With its additional complexity, the Wii U is attractive to hardcore gamers, but they number far fewer than casual gamers. The mature-rated game ZombiU touts 15 ways to use the GamePad, as if it were the Swiss Army knife of videogame controllers. But the post-apocalyptic horror tale stopped me in my tracks as I struggled to figure out what to do. I wouldn’t say that ZombiU, and games like it, fail. It’s as compelling as some of the better scary videogames. It’s just that, in trying to be all things to all people, Nintendo has increased the learning curve. No one needs that.

All this may not matter – initially. Nintendo is savvy about putting a limited number of devices on store shelves to create demand. Already, analysts, some of whom never seem to say anything bad about game companies, are predicting that retailers will sell out quickly. There will be long lines, they warn. Comfort your sensitive children, for surely without a Wii U under the Christmas tree they will weep endlessly like teenage John Boehners.

But then what? I believe Nintendo suffers from a communication problem. The company’s marketing people have had trouble trying to explain precisely what the Wii U does and how it works. Nintendo’s tag line – “How U will play next” ‑ is a classic glittering generality. It makes a mystery more mysterious. That’s a dangerous tactic to take when launching a new console.

Now, with the Wii U in my home for a week, I have begun to understand and appreciate its many intricacies. A charming female robot in Nintendo Land, one of the system’s games, is giving me essential instructions about using the GamePad. And while the GamePad is too heavy, it does function as a TV remote.

Still, the expense of the machine is daunting. Harried holiday shoppers will need to buy the $350 version of the system – as opposed to the cheaper, $299 iteration – if they want a game, Nintendo Land, to come with it. Once you set it up, there’s a maddening one-hour download of a software patch before you can go online to play. And loading games and apps still requires a wait of 15 to 30 seconds.

Until Sony and Microsoft release their next consoles, which may not happen until 2014, the Wii U is the only new console on the market. Yet with that steep, sometimes frustrating, learning curve, consumers will have to really be addicted to Mario and Zelda, Nintendo’s marquee characters, to put up with the initial nonsense like downloadable patches. I’ve never had so many concerns about a new console in nearly 20 years of writing about videogames.

While Nintendo fans are rabidly loyal, the issues with the Wii U may trouble investors for some time to come. Couple this with Nintendo’s dependence on rebooting old (albeit lovable) characters and you have to wonder about the future. Even with a new console, Nintendo has to reinvent itself to survive and thrive during the next decade. The games on Apple’s App Store, after all, are only getting better.

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