Game on for Nintendo: the new Wii U has a smart act to follow

The growth in popularity of smartphones and tablets is a challenge to console gaming, but the console makers aren’t giving up without a fight

As Nintendo prepares to launch its latest games console in Europe, the era of console gaming is under threat from the growth in popularity of smartphones and tablets, offering convenient and addictive games more cheaply than ever before.

But predictions of the death of the console may be premature. The release of major titles such as Call of Duty: Black Ops II and Halo 4 prove there is still a market for blockbuster games with high production values and significant investment from the studios.

And the console makers aren’t giving up without a fight. The current crop of consoles has been hanging around for longer than usual, with the lifecycle extended by the introduction of motion sensitive controllers.

Meanwhile, Sony and Microsoft have been concentrating on making the games console the hub of entertainment in the home, adding services such as music, movies and TV to the consoles.

Nintendo is hoping that its Wii U, with high-definition graphics, a touchscreen controller and – eventually – streaming TV services will be enough to grab the collective gaming imagination.

Possibilities

It has a tough act to follow. The Wii was a hit, carving itself a niche as a family console and selling almost 97.2 million since its 2006 launch. While the Wii U appears to be targeting the same audience, it’s also trying to shed the image that its predecessor had of being a less serious games console.

The high-definition graphics will go some way towards this, something the Wii missed out on. The graphics and video quality on the Wii U will eclipse its predecessor, and open up more games possibilities for the new console.

There are 23 launch titles available, with a further 29 set to be added in the coming months. Games such as Assassin’s Creed III stand up well against the Xbox and PlayStation 3 counterparts, and in the launch line-up is an exclusive survival horror title from Ubisoft, ZombiU.

But you also get the titles for which the Wii has become known – family-friendly favourites such as Just Dance, which will include special functions available only for that system such as a puppet master mode that allows a fifth player to control the choreography in real time.

A version of Super Mario Bros built for the Wii U, New Super Mario Bros U, will also be available, and EA’s Mass Effect 3 will make its way to the console.

The big selling point for the Wii U is the 6.2in touchscreen controller known as the GamePad. Intended as some sort of compromise between the tablet and the console, it tries to tap into the trend for touchscreen devices.

The controller can be used as a personal screen to play games, as a controller or to complement the controller with additional functions. So consumers who are already familiar with the type of gestures common on smartphone games – swiping and tapping – will be able to make the leap to the touchscreen Wii controller with little difficulty.

Nintendo has also promised TV services for the console through Nintendo TVii, which will allow access to pay-TV streaming services; that won’t be available until December. YouTube access is also planned for the console, but that has also been delayed.

The Wii U’s backwards compatibility is another bonus. Most of the Wii games that players have spent the past six years building up will play on the Wii U, and the motion-sensitive remote controls are also a key part of its control system.

The success of the Wii U is critical for Nintendo. The company is determined to return to profit after reporting its first loss. The sales of its 3DS handheld console, released in February last year, failed to live up to expectations, forcing Nintendo to cut its price by about a third in August.

The Wii U has been a long time coming. Nintendo was the first of the major console makers to jump in with the next generation of games consoles, announcing it at the E3 exhibition in 2011.

But despite fears that momentum behind the new release would slide, the initial sales in the US have been positive. The console has been on sale there for almost two weeks, as the company tried to take advantage of the shopping season that kicks off around Thanksgiving . In its first week, it notched up 400,000 in sales, and sold out in many retail outlets.

The Japanese launch will come on December 8th.

Still, the successor to the Wii has a tough road ahead of it. Although analysts have predicted a successful launch, keeping that momentum going will be a challenge.

Ahead of its launch, research firm IHS predicted the Wii U would outperform the sales of its predecessor in the opening months as fans of Nintendo, starved of new hardware, rush get their hands on the new console for Christmas.

Demand

A research note from IHS’s senior principal analyst, head of games Piers Harding-Rolls, predicts sales of 3.5 million worldwide for the console by the end of December . Looking back at Wii sales, the console notched up 3.1 million in the same period shortly after its launch in 2006.

That could mean shortages over the Christmas period.

“As a result of the tight inventory control Nintendo employs to manage its supply chain and strong consumer demand in these opening weeks of launch, we believe it’s highly likely that retailers will experience some Wii U shortages in the run-up to Christmas. Stock will be replenished in ongoing fashion, but some unlucky shoppers may well miss out,” says Harding-Rolls.

But that momentum may not hold, he warns. According to IHS forecasts, sales of the Wii U over the first four years of the console’s life will reach only 70 per cent of the Wii. And when you look at the original Wii’s sales in its first week, the Wii U is already slightly behind. In 2006, the Wii sold 600,000 units in its first seven days on sale.

Wedbush Securities analyst Michael Pachter says Nintendo could sell about 10 million units a year after the initial launch.

With Nintendo making its move into the next generation of consoles, the pressure is now on Microsoft and Sony to unveil their plans for the games of the future.

Videogame sales have declined in recent months, partly due to the upcoming release of the Wii U and the ageing of existing platforms, and also to the rise in popularity of mobile gaming.

It’s a tough market for all the major games makers, and the success of new platforms will be tested in the coming years.

“The Wii U won’t be as popular as the Wii,” says Takashi Oka, a Tokyo-based analyst at TIW. “Nintendo won’t be able to return to the same level as before.”