Early last month, GameStop announced that it would be halting Wii U pre-orders and putting future customers on a waiting list. As of this writing, there are over 250,000 people on that list. What does this mean? Well, if you haven’t pre-ordered, you might not be getting a Wii U at launch – and possibly not for a while.
Shortages are predicted to hit the UK especially hard, and some retailers may not have enough systems to fulfill pre-orders. An unnamed retail source told CVG that only 25,000 units will be available in the UK at launch. Other retailers have revealed that they expect to receive between 75,000 and 100,000 units, though they are not sure if the systems will arrive by day one or “be distributed across a number of weeks.”
Strong launch day demand for Wii U is good news for Nintendo, but there is a complication: surprisingly, the system will be sold at a loss. Though that tactic is often used by competitors Sony and Microsoft, Nintendo has long been committed to selling its hardware at a profit (including the Wii and the pre-price cut 3DS), which lead us to believe Wii U would be profitable out of the gate. Nintendo President Satoru Iwata addressed the issue in the company’s Second Quarter Financial Results Briefing.
“In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve ‘Nintendo-like’ profits within this fiscal year.”
Despite the demand for launch day systems, Wedbush analyst Michael Patcher believes the Wii U won’t have as strong a future as early numbers suggest. According to everyone’s favorite analyst, Nintendo will have plenty of competition this holiday season, including other video game consoles and even tablets, both of which could take a significant bite out of the Wii U’s momentum. He also expects a price cut sometime in 2013.
“We believe the Wii U will quickly lose positive momentum from its launch due primarily to pricing. We believe there are already a number of cheaper, comparable alternatives. For example, the prices of the Xbox 360 Kinect bundles have been reduced by $50 at Amazon, GameStop, and Wal-Mart.”
“In addition, Nintendo will have to compete for wallet share over the holidays with mobile device makers including Amazon, which is introducing the Kindle Fire HD at a starting price point of $199, well below that of both Wii U sets, and Apple, which is introducing the iPad Mini at a price point of $329, below that of the Wii U Premium Set.”
It’s hard to see the Wii U setting the world on fire like the Wii did back in 2006, especially with how much the market’s changed these past couple years. That being said, the Wii U certainly isn’t doomed to failure. As the first next-gen console, the Wii U does have an allure among the “gamer” crowd, and that should keep it supported for quite some time. It’s when the PS4 and Xbox 720 are announced/released that the system will truly be tested, and we can only hope Nintendo has a strong software lineup to keep the momentum going.
The Nintendo Wii U launches November 18, 2012 in North America.
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Follow me on Twitter @AnthonyMole.
Source: GameSpot, Nintendo [via Joystiq], CVG [1, 2]
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Patcher must be one of those “confused” consumers who believes that the Wii U is a mobile device. He’s comparing…well, Apple to Oranges.
If I was a kid and all I wanted was a Wii U for Christmas and Santa brought me a Kindle Fire or a 360 instead, frankly, I’d probably be pissed.
I don’t think Nintendo has to compete with anyone over the Holidays, except for Nintendo. In order to have competition, one needs to have a dog in the race. If Ninty doesn’t have enough systems to meet demand, consumers won’t have to make a choice between the Wii U and anything else.
According to many sources, at least one of the next gen consoles is releasing next year, as well as the Ouya. If the Wii U shortage continues into next year, which it almost surely will, consumers will begin to look forward to other things, such as the Ouya, PS4, or 720. Nintendo could be in trouble if they don’t boost production somehow. This will be difficult, though, because they are charging less than they cost to make. My guess is that if Nintendo was to charge the amount they wanted, it would be somewhere between $400-$600, which would do terribly in the market. They’re in a bit of a bind, and that’s not an opinion.
That’s what Microsoft and Sony went to market with in this console generation. Of course, what they were offering also looked miles ahead of the previous generation, something Nintendo doesn’t seem to understand is a primary selling point.
You’re right. That’s why the Wii dominated both the PS3 and the 360 in Hardware and Software sales, because Nintendo doesn’t understand how to sell stuff.
They don’t know how to sell in this market. Not anymore. The industry has changed so much since the Wii released, but they’re still releasing a fancy gimmick, when that isn’t what people want. The reason the Wii sold so well is because no one had ever played a motion-controlled video game at home, and everyone thought that it was so neat. With the Wii U, it’s not bringing anything new to the table. People already play games on tablets, people already have HD video game consoles, and people already have consoles that have online capabilities. So what is it that should really entice me to buy it? The promise of great Nintendo exclusives? Great, I’ll buy one in a few years when they have good exclusives. Sources have said that the new Zelda isn’t due until 2014, and there hasn’t even been talk of a new 3D Mario platformer or Metroid, so in my book, the Wii U is a $300-$350 console that plays games that I can already play on my 360 or PS3. I ask again, what reason do I have for buying the Wii U if it doesn’t bring anything new to the table?
That’s your opinion. If you don’t think it brings anything new to the table and you don’t want to purchase one, nothing I’m going to say is going to change your mind.
I personally think there are some great looking games coming out for it at launch and in the launch window that justify me making the purchase. If you don’t, that’s okay. However, I don’t think it’s fair to say things like “that isn’t what people want.” Maybe YOU don’t want that. But I know there are a few million others who disagree with you.
Early feedback from the demo kiosks, from what I’ve read, has been overwhelmingly positive. People shouldn’t automatically judge or discount something that hasn’t even been given a chance yet. Maybe in a few months I might be saying, “Nintendo lost it. This Wii U thing is a piece of garbage, it’s a disaster. NINTY IS DOOMED!”. I’ll let you know. But for now, I think we all will just have to wait and see.
The fact that they aren’t bringing anything new to the table isn’t an opinion, it’s a fact. There are only 2 or 3 games that aren’t strictly children’s games that are exclusive for the Wii U in the launch window, and all the others are third party titles that are, or will already be, on other consoles. Me saying “this isn’t what people want” isn’t just me putting out my opinion. Look around you, look on this site, look on reddit, look anywhere, the majority of people are saying that they have no interest in the Wii U because it’s just another gimmick. Also, what few million? What numbers are you going off of? They haven’t released the preorder numbers, but there are 6,207 Gamestop stores worldwide (I believe that number is correct) and each store probably will get 5-10 consoles, if that many, and other retailers will get less than 5, so where is your “few million?” I’m not saying Nintendo is doomed, but they could’ve done much, much better to prepare for the next generation.
Where is my few million? You don’t think that a FEW million people want to buy a Wii U? You can’t be serious. Read the second sentence in this article! There are 250,000 people JUST on the GameStop WAITING LIST! And stating that the majority of gamers have no interest in the Wii U is just plain foolish. I think you need to read more. I think there is a general consensus between gaming mags/websites/blogs that people are pretty excited about what the Wii U has to offer.
You saying that they are not bringing ANYTHIG new to the table is NOT fact. Only for the FACT that I believe they are. Therefore, it is an opinion.
Where do you come up with less than 5 per store? When I preordered mine from Walmart, they were getting at least 20. That was just my small-town Walmart.
Nintendo didn’t NEED to prepare for the next generation. The Wii U is it’s OWN generation. It’s not a PS4 or a 720, it’s a Wii U! If you can’t take it for what it is at face value, then leave it, stop complaining about it, it is what it is!
@UnbuildTheGame
You lose all credibility, and the argument, once you start labeling opinions as fact. Also, you, and everyone who thinks so, are kidding yourselves if you think Sony is in a fit state to release a powerhouse console, and sell it at a reasonable price. And Microsoft? I don’t think they care about power anymore. Kinect 2 is going to be their focus next gen. They have no incentive to release a super strong console after this gen. No, my friend. Next gen, the playing field will be perfectly even, power-wise. It’s the games that will drive the console wars next gen, that along with whatever “innovation” Micro and Sony bring to the table.
Speaking of which, I can’t wait to see what new thing Sony and/or Microsoft bring to the console wars. I’m sure you wont be labeling those as “gimmicks”. I know there’s SmartGlass/Vita, but those don’t count, as they came out this gen. And I can’t stand the word gimmick, either, as nobody uses it right. The Gamepad is not a gimmick. A gimmick is a product considered a novelty, and not really that relevant to the product’s functioning. The Wii U is all about the Gamepad.
I think people are buying it because they’re sick of PS3 and Xbox and just want something new. So to them this is next-gen, some people…
The thing about it is this pretty much brings the Wii games up to PS3 and 360 graphics and capabilities and not much more (if any). And its controller is terrible (in my opinion).
Its hyped because it is the first of the next gen consoles, but I just don’t see it having any real staying power.
I suppose ignorance really is bliss.
Bad news for nintendo
I’m hoping it’s a shortage because they dumped all of their ill-gotten units into a harbor like the Boston Tea Party.
It’s doubtful, because with them already selling the console at a loss, they would take even heavier losses if they were to get rid of that many systems.
Honestly if I couldn’t get a Wii U for a while, the last thing I’d do is wait for a more expensive alternative to take its place. Granted I’m one to buy all the consoles anyways, but how many kids or even adults who aren’t that “techy” have even heard of the Ouya? If they aren’t sold in a store it’s very unlikely the causal market even knows it exists.
That said, I don’t think we will see Microsoft or Sony have a new console on the market for another 2 years. If they were releasing it next year we would have known about it by now. Nintendo has plenty of room to dominate the market again as they did with the Wii. They said they aren’t making any extra Gamepads (no games in the launch window utilize a second one) so they can focus on pumping out more consoles.
“..how many kids or even adults who aren’t that “techy” have even heard of the Ouya? If they aren’t sold in a store it’s very unlikely the causal market even knows it exists.”
It’s not sold in stores yet, and I imagine they’re waiting to advertise for after the turn of the new year. If I remember correctly, it’s dropping in March 2013, and before then, I’m sure there will be plenty of advertising so that everyone knows about it.
“Honestly if I couldn’t get a Wii U for a while, the last thing I’d do is wait for a more expensive alternative to take its place.”
According to recent actions by Microsoft, we may be seeing a cheaper 720 as long as you sign a two year contract for Xbox Live, which is a good deal for anyone interested in the service, and most people with a 360 are, so who’s to say that the 720 will be more expensive than the Wii U?
“I don’t think we will see Microsoft or Sony have a new console on the market for another 2 years.”
Just because they haven’t said anything about it yet doesn’t mean that it isn’t releasing next year. The fact is that Microsoft and Sony are each other’s biggest competitors in this industry, so why would they want to show their hand any earlier than they have to?
“They said they aren’t making any extra Gamepads so they can focus on pumping out more consoles.”
This sounds like they are 100% confident in their GamePads, but everyone knows that no tech is 100% reliable. Nintendo has never dealt with tech as powerful and complex as the GamePad, so who’s to say that they didn’t do something wrong with it’s design, something that causes and RROD-like problem for the GamePads? Also, you have to take into consideration that many of these GamePads and consoles were put together by children at FoxConn, so the quality may not be as good as it could be. My point is that if there are hardware issues with the GamePad, how will it be possible to replace them?
You should probably research more before you comment. Nintendo said that they would replace broken Gamepads for a fee. I’m assuming if it’s a hardware problem, they wont charge you. Hopefully.
https://www.google.com/search?q=nintendo+will+replace+broken+gamepads+for+a+fee&oq=nintendo+will+replace+broken+gamepads+for+a+fee&sugexp=chrome,mod=0&sourceid=chrome&ie=UTF-8
I still think Nintendo’s biggest problem is demand…undersupply of preorders to ensure hype due to “sellouts” is a common practice for Nintendo.
I keep watching Ebay to see how well the gougers are doing, which in my opinion, is a good way to gauge demand. Higher gouge prices = bigger demand.
Wii U was initially selling a few for $799 (which isn’t a bad profit for the gougers) but they have dropped drastically. I saw most now selling for near Retail, and as a former gouger, I know that if you sell a Deluxe at $400 (Retail + $50) you make literally nothing, after shipping, packaging, & time spent.
A month before release and gouge prices are bottoming. Not a good sign of demand.
The Wii U hasn’t even dropped yet. Anyone who would pay double for a system that hasn’t even been released has some serious issues. I hope people have enough sense to realize that there is still a chance of finding a Wii U at retail. Target just recently opened up their b/m preorders and some stores haven’t even gone the preorder route. So come 11/18 you may still be able to find them in the wild.
Wait until a couple weeks before Christmas, then check eBay again.
You must not remember how console releases work. If you wait until a week or two before Christmas, you’ll be paying WAY more than double for the system. I remember when the 360 and the Wii released (I wasn’t too interested in the PS3 at the time, so I don’t remember) a couple weeks before Christmas, they were selling for almost $2,000, and they were almost impossible to find at any retailer for almost a year. For anyone who really wants one that hasn’t preordered it, buying them overpriced on ebay right now is a good idea, because how much they cost will go up exponentially between its release and Christmas, and even into 2013.
My point is why would anyone pay double or more for one on eBay RIGHT NOW, when they can possibly still preorder one from Target or even get one on launch day? When there is no longer an option, i.e. 11/19, is when you will see the prices start to climb. Judging demand for the Wii U based upon eBay prices RIGHT NOW, when some are still available at retail prices doesn’t mean anything.
What is the deal with these comment sections?
My comment was here, now gone. Half the time lately an article shows no comments but it says there are 6. Whatever you did to your comments section, undo it. Seriously, GameRant/ScreenRant, your comment sections are messed up now.
And now it’s back…seriously GR waddup?
What browser are you using? Everything works fine for me in Chrome.
I’ve used IE, FireFox, & Safari and had the same issue. Front page shows 24 comments, only 9 show. Then when I input a new comment magically they are all back.
Thanks, I’ll share this comment with the rest of the GR guys.
Dante,
Thanks for pointing this out, it’s now fixed. We had the site on “Lockdown” mode for caching because we had a huge server load spike – I forgot to undo the lockdown once it was over.
My bad.
Regards,
Vic
Thanks Vic! Comments working now.
Any idea when these comment will be fixed? Says there are 24, only shows 9.
How suffecient will the 8gb one be???
Not very. However, compared to the Wii’s paltry 512MB, it’s a behemoth. The good news is the Wii U will accept any SD card or External Hard Drive for expanded storage.