TOKYO (AP) — This holiday season Nintendo faces a critical test with its Wii U video game console that is pitted against Sony's PlayStation 4 and Microsoft's Xbox One as it seeks to revive flagging sales.
Analysts say there's a chance for the Kyoto-based company to stage a turnaround as new game releases such as Super Mario 3D World and Wii Fit U could lift Wii U sales. Should lackluster sales persist, the company which shot to prominence in the 1980s with Family Computer consoles and Game Boy portables might be forced to reconsider the core of its business strategy.
Nintendo's business, long associated with the hit Super Mario, Donkey Kong and Pokemon games, has been shaken in recent years as more people play games on their smartphone and tablets. So far Nintendo has been steadfast in its refusal to adapt games for those devices.
The company reported an 8 billion yen ($81 million) loss for the three months ended Sept. 30. Quarterly Wii U sales nearly doubled to 300,000 units from 160,000 in the previous three months, but cumulative sales remained far short of the company's goal of 9 million units for the financial year ending March 2014.
Eiji Sato, analyst at Toyo Securities, said Nintendo needs "killer content" for the Wii U to turn around its business after a weak lineup of game titles added to its woes. That has caught the company in a vicious cycle because developers are reluctant to create games for a poor-selling console.
Most game creators are also pouring resources into mobile games, which are easier and faster to develop compared with those for home game consoles that take more time, energy and expense due to the need for higher quality graphics, said Sato.
Nintendo's management principle has been to increase the population of gamers in the general public. When its strategy works, Nintendo wins big as it did with the motion-sensing Wii in 2007, Sato said.
The Wii U, the successor to the original Wii, reached cumulative global sales of 3.9 million units at the end of September since its launch over a year ago. In contrast, sales of Sony's PS4 reached more than 2.1 million after going on sale Nov. 15. More than one million Xbox One machines were purchased on the first day of sales in 13 countries on Nov. 22.