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Wii U now profitable but they’re still doomed right?


You can’t go more than a day without seeing some sort of “Nintendo is doomed” article from the media. The majority of these articles are completely out of touch with how Nintendo’s business operates. Most of them ignored how much money Nintendo has in cash, with over $3 billion in the bank.

These posts usually focus on “Nintendo is losing money for X year in a row” or “Wii U is selling very badly, will they follow Sega?” without having any context or understanding for the rash claims they’re making. I don’t want to go into great detail as to why Nintendo’s current situation is far different than Sega’s 90’s woes that lead to the discontinuation of the Dreamcast but I will say this: $3 billion dollars in cash.

Moving on, a big reason why these “doom and gloom” posts existed was because Nintendo was losing money. Makes sense, no company wants to bleed money. The Wii U wasn’t and will probably never sell all that well and was being sold at a loss. The key term here is was being sold at a loss.

Yesterday during their fiscal year meeting Nintendo revealed that they are no longer selling the Wii U at a loss. This means that for every $299 32GB Wii U system, they make some profit. That’s after they give money to retailers too. Whether this is a small profit like $5-$10 or more we don’t know but this news means that Nintendo will have a much greater chance at breaking their streak of consecutive annual losses next year.

But the Wii U is still selling badly right? These naysayers will be proven right because the company will discontinue it right? Well, no. Nintendo said yesterday that to bring out new hardware years from now they have to satisfy current users of Wii U and 3DS.

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This shows the company’s dedication to their existing user base, however small it may be. They know that if they drop the Wii U now they will lose millions of customers and never get them back. This is the key difference between Nintendo of today and Sega in the 90’s. Sega released the Sega CD, 32X and Saturn all within 3 years. This upset consumers since each were essentially brand new game systems and had price tags equivalent to new systems. Nintendo, at the worst, is going to give you new models that play the same games as their older models.

Nintendo even says that they are aiming for a conservative sales goal of 3.6 million Wii U systems and 12 million 3DS systems this fiscal year. With Mario Kart 8, Super Smash Bros, X, Hyrule Warriors, Bayonetta 2 and no next-gen console launches from Microsoft and Sony this year I think that 3.6 million is entirely do-able considering they hit 2.72 million last year without their two biggest sellers, Mario Kart and Smash Bros. They’re getting it folks, Nintendo is no longer out of touch with how bad their console is selling. In a year’s time if Smash Bros and Mario Kart 8 propel the Wii U to sell maybe 4.2 million units during their fiscal year do you think the “Nintendo surpasses Wii U sales goals, posts profit” news post will be as sexy and popular as “Wii U is doomed” posts over the past year?

Simply put, the revelation that the Wii U is no longer sold at a loss is pretty damning to the “Nintendo/Wii U is doomed” argument. I know the gaming press doesn’t have the best relationship with Nintendo, and that makes sense because Nintendo hasn’t treated them very good in recent years. Moves like their new E3 teaser with Mega64 seem like a step in the right direction as if Nintendo knows that they need to pay more attention to the gaming press and what their audience watches.

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But will the “doom and gloom” news slow down now that the Wii U is sold at a profit and now that Nintendo will most likely stop posting annual losses? Probably not. After all, those negative news stories draw a hell of a lot of attention to sites. The fact that Nintendo’s Wii U console is now sold at a profit means they will only be building up that multi-billion dollar warchest more, even if it is in small increments. That won’t stop people from saying, “they better go third party and makes smartphone games,” despite the fact that they have more than enough money to sustain themselves and come out with 3DS/Wii U successors in a few years.

Will the Wii U ever outsell the PS4 or Xbox One in any given month? Probably not outside of some random miracle month where everything works in their favor. Will it recover like the PS3 did post-2009? Probably not to that extent but a little bit. Will Nintendo be just fine, make decent money off the 3DS and now the Wii U too despite selling a low amount of consoles and keep developing fantastic first party games for their fans until the time comes to release new consoles/handhelds in 2016-2018? Yes. That much you can take to the bank.