Wii U: Expert viewpoints on Nintendo's games console launch

 

BBC Click’s Marc Cieslak previews Nintendo’s latest home console

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If you can't beat them join them - after seeing much of its casual gaming target audience defect to the iPad and other tablets, Nintendo is aiming to revitalise its fortunes with the Wii U.

The machine - which launches in the US ahead of other markets - comes with a touchscreen tablet-like controller.

The innovation is designed to operate as a second screen opening up new gaming possibilities: early examples see it act as a map, a gun scope, and means to see objects otherwise hidden on the main display.

It also offers new control mechanisms - in some games drawing a line on-screen makes the character follow a matching path, in another it simulates a bow and arrow. It can even act as a fall-back device, allowing users to continue playing their way through a title when someone else takes over the television to watch a show.

ZombiU screenshot The Gamepad reveals details about characters highlighted in security camera feeds in the game ZombiU

Nintendo needs consumers to love the innovation.

The firm posted its first annual net loss in April and has fallen further into the red since.

Its deficit totals 71.1bn yen ($875m; £551m) for the 18 months running to the beginning of October.

The new console may initially put further strain on its finances. The firm is selling the Wii U for a lower price than it costs to make and market, something that was not the case with the original Wii.

But the move to hold down the price of its launch packages will pay off if it can take advantage of its lead on Sony and Microsoft's next-generation machines to attract more sales and then convince owners to buy lots of games and other online content, from which it does profit.

The risk is that it fails to excite and is forced to consider following Sega's path by releasing its Mario, Zelda and Pikmin franchises on other companies' hardware.

The BBC asked four experts for their view of the risks and rewards facing the Japanese firm.

A HARD SELL

Start Quote

Michael Pachter

It may find itself generating losses for the next several years”

End Quote

Michael Pachter is managing director of equity research at Wedbush Securities. Although Nintendo has sizeable cash reserves - it had more than 478bn yen ($5.9bn; £3.7bn) to hand at the end of September - he is concerned shareholders will see little benefit from the Wii U.

Nintendo has been a difficult investment. The company has seen its fortunes turn over the last year as competition from mobile and social games eroded its fan base.

In the latter part of the last decade, Nintendo's Wii console dominated market share among more casual gamers, and its DS handheld console dominated market share among predominantly pre-teen casual gamers in the West.

But with the advent of social games, Nintendo found its Wii console competing for attention from the very fan base it developed - women over 30-years-old - and software sales for the Wii began to plunge.

Similarly, with the increased penetration of smartphones and tablets, the DS's addressable market began to contract. While the next handheld iteration, the 3DS, is selling quite well, it is clear that the addressable market for dedicated handheld consoles will continue to contract, particularly as smartphones and tablets proliferate.

Michael Pachter

  • Covers entertainment retail and movies for Los Angeles based Wedbush Securities
  • More than 20 years experience in the finance industry

As its sales began to decline, Nintendo did little to adjust its cost structure, and has instead made large bets on the 3DS and the new Wii U.

While each console is expected to perform well, neither is expected to achieve the glory of the DS or Wii, respectively.

Should Nintendo continue to aggressively ramp up its expenses to support growth of the installed base for the 3DS and Wii U, it may find itself generating losses for the next several years.

We are not optimistic that the company can return to its former glory days, and remain neutral on Nintendo shares.

PERSONALITY CRISIS?

Start Quote

Jason Schreier

The controller might look strange, but it feels great”

End Quote

Jason Schreier is a reporter at Kotaku. The gaming site previously reported that having two screens to look at could prove confusing, but he is now positive the system will find an audience.

Much fuss has been made about the Wii U's inability to decide what it is. Is it meant to be a machine for blood-thirsty Xbox gamers? A grandma-friendly tennis simulator? Some bizarre combination of the two?

The common critique is that Wii U is not as accessible as its wildly popular predecessor.

Where with the Wii you could pick up a remote and instantly know what to do with your hands, the Wii U requires far more instruction. For proof, just check out Nintendo Land, a launch game whose tutorials are as long as a round of Wii Tennis.

The Wii U's controller, while extraordinarily comfortable, is not immediately intuitive to your average layperson.

It's got buttons, joysticks, and even a touchscreen; inexperienced gamers could have trouble figuring out what to use and when to use it.

This inaccessibility could be a Bowser-sized obstacle in Nintendo's quest to take over our living rooms.

But people who do look into Nintendo's new system may be surprised at just how robust its software library is.

Jason Schreier

  • Lives in New York where he writes for the Kotaku games news site
  • Has also written for Wired, Joystiq, Edge and Eurogamer

With a collection of surprising indie games on the horizon as well as a strong lineup of original games like New Super Mario Bros U, Pikmin 3, ZombiU, and Bayonetta 2, the Wii U's short-term line-up is strong.

Once customers get used to the unorthodox controller, they may find themselves loving how it lets them interact with games, so long as the Wii U continues to deliver consistently high-quality software.

The controller might look strange, but it feels great, and playing around with it has been nothing but fun so far.

So forget about the Wii U's existential dilemma. Bring on the games.

DEVELOPERS' DILEMMA

Start Quote

Will Freeman

Indies, students and hobbyists can begin crafting games for the console”

End Quote

Will Freeman is editor of Develop, a trade magazine and website for the global games development sector. It has reported that studios like Bethesda have held off creating titles for the Wii U, discouraged by the cost of having to rework games released on other platforms to suit Nintendo's unique hardware. However, he thinks the firm has an opportunity to cosy up to the indie scene.

The Wii U is a very different console from anything that has come before it. Its atypical make-up - namely the extra screens and combination of numerous different player inputs - means that applying established game design models and technologies to the platform could be deemed a tough job.

That might be the reason some games development giants are adopting a wait-and-see approach to supporting the platform.

Many developers claimed delight at how relatively "easy" it was to upgrade from making games for Nintendo's GameCube to building Wii titles. That may not be the case this time around.

However, the Wii U isn't necessarily inaccessible. In fact, thanks to a technology named Unity it maybe that even indies, students and hobbyists can begin crafting games for the console.

Unity is an "engine" - a complete solution for making games.

Will Freeman

  • Edits Develop magazine in Hertfordshire
  • Once worked as a games industry press officer

Initially, it was the darling of small-scale developers, defined by the company mantra of democratising games development. Over the years, though, it has been adopted by the industry's big names.

And now Unity has secured a deal that will see its technology distributed with every Wii U development kit dispatched to Nintendo's first and third-party licensee studios.

That not only means those established outfits have an established solution for creating Wii U games; it also means Unity's 1.2 million existing customers - scores of them indies and students - already own a familiar tool that can now let them build games for the new console.

How open Nintendo is to accepting the work of games development's grassroots coders remains to be seen, but the company must have pursued the Unity deal knowing it would make the Wii U more attractive to studios of every size.

TV TIMES

Start Quote

Ed Barton

The challenge for Nintendo will be to differentiate Wii U's entertainment proposition”

End Quote

Ed Barton is director of digital media strategies at the consultancy Strategy Analytics. Nintendo made a last-minute announcement that the Wii U's on-demand and interactive TV and movie facilities would not be ready for its US launch. He believes they will face a further struggle when they ultimately launch in December.

Offering a range of entertainment services has become a negative differentiator for home electronics: if your device doesn't offer access to the services which a given audience knows and loves then it will count against you because your competitors will.

Wii U will offer Netflix, Hulu and Amazon streaming video services for the US and I fully expect them to cater for territorial tastes in other key markets, such as iPlayer for the UK or Viaplay for the Nordics.

It's important to remember that people now enjoy a dizzying array of options for which device to turn on when considering their entertainment needs.

Wii U has to make the case to turn to it rather than a set-top box connected TV, competing games console - Xbox's extensive range of TV partners makes it a formidable competitor in this respect - and even a tablet or smartphone. All the alternatives offer an excellent range of entertainment options which are improving on a daily basis.

Ed Barton

  • Digital media strategies director at the Milton Keynes office of consultants Strategy Analytics
  • Studied modern history at university

The challenge for Nintendo will be to differentiate Wii U's entertainment proposition and take maximum advantage of the qualities that only it can offer: in particular a tightly integrated companion touchscreen in the Wii U controller and the interface improvements to controlling the first screen and content discovery that this should enable.

Being a console manufacturer is no longer about just hardware and games sales: Nintendo needs to be thinking in terms of audience engagement, revenue-per-user, churn reduction and an increasingly competitive world outside of video gaming which looks jealously on every second someone spends on a games console.

 

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