Gaming industry economists knew this was coming. With slipping sales of the Nintendo's portable 3DS and a lacklustre showing of software for the Wii in 2011 – sorry Nintendo, but RPG's won't save the Wii, no matter how good Zelda is – Nintendo was forecasted to have its first yearly loss in three decades.
No one could have predicted, though, just how far things would slide for the once untouchable video game giant. In Japan's Osaka Exchange trading market alone, Nintendo stock dropped by 7.8 per cent, the lowest it's been since 2004, with profits spiralling by 31.2 per cent in the first nine months of this fiscal year. Economists are predicting a total loss of $844 million US, more than three times what was forecasted earlier in 2011. This may be somewhat small potatoes in the long run, but it reflects a strategy by Nintendo riddled with holes.
Many are blaming this on Nintendo's portable gaming system, the 3DS. In the wake of growth by Apple and its surging portable and flexible gaming products and dirt-cheap App Store, 3DS sales slipped. It's a harsh reality to face but gaming on cellphones and tablet devices, like the iPad and iPhone, are only going to become more popular.
Even Nintendo's move to cut 3DS prices by up to 40 per cent in places couldn't stay this trend. All the price cut did was make profits slip even further.
Nintendo is also blaming their hardships on declining hardware sales of the Nintendo Wii. And it is here where the true travesty lies. Let me get this straight: Nintendo not only stretches itself thin with a new portable gaming system, but then releases a shabby software lineup for the Wii in the latter half of 2011, and now they have the audacity to push the onus on their once-prodigal console.
Oh, how quickly we forget. Five years ago it was the Wii that shot Nintendo into superstardom. Remember Christmas 2006? The Wii was unobtainable and this demand made it the must-have gift of the season. This trend didn't just last a few months Ĺ• la the Tickle Me Elmo craze of a decade before, but a full year and a half. It was a frenzied market and Nintendo raked in the kudos and the dough, selling more consoles than Microsoft and Sony combined.
Perhaps instead of blaming the Wii, Nintendo should be open about allowing the Wii to die a slow death. Still, how can they now so easily turn their backs on a system that has given them so much? At the end of the last generation, you could still find great games for both the original Xbox and the PlayStation 2. These systems went out winning, which allowed a smoother, more dignified transition into the next generation.
Nintendo's strategy has the 3DS bridging the high-def, 3D gap between the Wii and its next console, the Wii U. If the Wii U was being released this quarter then this strategy and its accompanying betrayal might be forgivable. But the Wii U isn't slated for release until November at the earliest. By then it may be too late to recover. Sure Nintendo was a breakthrough leader in motion family gaming. But Microsoft and Sony have now caught up. When the new consoles are released this time around, it's going to be Nintendo who needs to catch up, finally entering the world of high-definition online gaming, two realms that its competitors have had a decade to refine.
The question of whether a new console will be able to reverse this trend remains to be answered. For now, Nintendo is left to suffer the financial fallout of leaving a once-loved console to dangle in the winds of progress.
When he's not teaching junior high school, St. Albert Catholic High School alumnus Derek Mitchell can be found attached to a video game console.
