Nintendo is currently nursing a big “ouch,” courtesy of a projected loss for its fiscal year ending in March 2012. The loss, forecast at 20 billion yen (or about $264 million USD) would be its first annual net loss since 1981, when the company started reporting its numbers.
Nintendo President Satoru Iwata encouraged investors not to panic and freak out by reminding them that Nintendo’s sales strength has always been the holiday season–and that 2011’s holiday would be no different. According to Iwata, both the Wii and the Nintendo 3DS will see very significant popularity boosts when it comes time for parents and kids to draw up their Christmas lists.
Given the 3DS’s strong holiday lineup and price drop, it’ll likely fare as well as Iwata hopes. The Wii’s fate is a bit of question mark, as it has only a few must-have games this holiday season–but to be fair, a major Zelda title like Skyward Sword is no small thing. What’s more, early reviews for the game have been golden so far, and those numbers will surely turn a few fence-sitters into full-fledged Wii owners.
But a decent 2011 holiday season won’t be enough to ensure Nintendo’s good health in the long-term. Fortunately, the company can do a few things to help it recover from its current financial situation.
Don’t Get Cocky About Pricing the Wii U — Nintendo thought that its reputation and the hype surrounding the 3DS at E3 2010 would mean people wouldn’t think twice about dishing out $250 USD for the 3DS. Nintendo thought wrong. To its credit, it was hardly the first company to harbor the belief that fans would open their wallets extra wide to buy shiny new hardware. Sony made the exact same mistake with the PlayStation 3, which was $599 USD at launch.
Even if affordability doesn’t trump technology every single time, it cannot be overstated that consumers find low prices to be very, very sexy. Nobody really expects the Wii U to be $199 USD (though it’d be nice), but Nintendo will need to think hard about the number on the Wii U’s price tag. After all, it’s not the only company that learned a hard lesson about high prices: Sony almost certainly intends to price the PlayStation 4 a bit more carefully.
Continue Refining the 3DS eShop / Make Sure the Wii U’s Online Shop is Functional and Well-Stocked From Day One — Nintendo needs to take its online marketplaces more seriously. We’ve said this before (and before), but someone needs to paint the message on the side of an 18-wheeler and drive it through Nintendo’s offices. There is some good news about the eShop, which will be receiving upgrades in November and beyond. Not only will the shop become easier to navigate, but users will be able to visit and make purchases via the web instead of being expected to boot up the eShop every single time.
Good stuff, but these are the kinds of features that should have been available for the 3DS from day one. Nintendo needs to keep on top of eShop updates, it needs to help indie developers publish on the platform, and, most importantly, it needs to make sure the Wii U’s digital marketplace is up, running, and decently stocked from the first day the system hits the shelves.
A Mario Title With the Wii U Launch — We don’t know what Nintendo has up its sleeve for the Wii U launch, but something cool and new featuring Mario might get us excited. Besides, there was a time when it was unthinkable for Mario to sit out a Nintendo system launch. It’d be nice to see a return to those days. It’d make things a little more interesting than a launch featuring Pilotwings and Nintendogs–though the Super Nintendo’s version of Pilotwings did feature a terrorist sub-plot, which was a little more hardcore than floating around an island and looking at the pretty scenery.
Keep Retail Game Prices Low — One of Nintendo’s most worrisome sources of competition is the flow of low-priced games coming from the App Store. A full-fledged Mario game that’s sold at retail simply can’t sell for 99 cents, but titles that prove to be strong sellers should go on sale often, or better yet, be marked down permanently as soon as possible.
Nintendo and third party developers should also be careful when determining what gets sold at retail for the Wii U and the 3DS, and what gets sold online. Consumers are quickly becoming more savvy at determining a game’s “true” value, which means the days of selling shoddy shovelware at full retail price are coming to a quick end. There’s nothing wrong with enjoying stuff like mini-game collections, but if they’re sold at retail for $50 and above instead of online at a more reasonable $10-$15, gamers will grow irrevocably cynical about the physical media market, which is by far Nintendo’s favorite method of game distribution.
There’s a Huge Retro Market Out There–So Serve It — We want to go back and play our favorite games released on game systems across the span of time, but Nintendo doesn’t always make it easy. The Virtual Console on the Wii feels like a half-baked idea, and even though the 3DS’s Virtual Console is off to a better start, we’re still not seeing the support it deserves. With every second that Nintendo fails to put the best of its NES, SNES, N64 and Arcade library on the Virtual Console, users defect to PlayStation Network, Xbox Live Arcade, or simply download an emulator and the appropriate ROM. It’s a sad situation that could easily be remedied with a little care.