Price Drop Won't Help Ailing Wii U, Claims Analyst

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Price Drop Won't Help Ailing Wii U, Claims Analyst

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Nintendo's Wii U is in dire straits, but surely cutting the price could right that ship, no? Not according to gaming industry analyst Michael Pachter.

The NPD's latest sales figures emerge this Thursday and Wedbush Morgan analyst Michael Pachter has rather grim predictions for Nintendo. Pachter believes that the Wii U will have sold a mere 55,000 units during its fifth month in existence, marking a 17-percent decline over the previous month. What's worse, Pachter believes this trend will continue, even if Nintendo opts to drop the price of the console.

"The only key hardware device to underperform our expectations was the Wii U and its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console," Pachter states. "We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."

Pachter believes that this sales decline may only be a harbinger of worse things to come for Nintendo. If the PlayStation 4 and next Xbox are price competitively, Pachter says, the Wii U's declining sales may drop even further.

The key reason for Pachter siding with Sony and Microsoft lies not so much in games, but in all the other things next-generation consoles are supposed to bring to the table. Pachter cites multimedia functionality and video playback as two key elements that could propel the PS4/Xbox 361 over the Wii U. Plus, Pachter believes that the new Sony and Microsoft consoles may be even cheaper than their predecessors. "If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model)," Pachter states. "If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history."

Of course, as with anything Michael Pachter ever says, this should be taken with a grain of salt. Pachter's claims are not based on inside knowledge, but are instead prognostications based on prior sales data and, likely to some extent, gut feelings. That said, Pachter has a history of being right about this sort of thing - hence why Wedbush Morgan pays him the big bucks to predict the future of the gaming industry.

Point being: Take this doom and gloom as gospel truth if you'd like, but it's entirely possible that Wii U sales may surprise everyone when the NPD Group's figures are revealed later this week. It's not at all likely (and we expect Pachter to be more or less on the money), but it is possible.

Source: GamesIndustry

Permalink

Are we suprised this guy's talking shit about Nintendo again?

We need a new analyst. One that isn't such a biased fuck up.

Soo...is Michael Pachter literally the *only* games industry analyst?

Pink Gregory:
Soo...is Michael Pachter literally the *only* games industry analyst?

He's certainly the only one I ever hear about. Now that I think about it I have never seen/heard him say anything positive about Nintendo. Wonder what that's about.

Assuming for the moment that the Wii U is at least not burning the world down with sales figures, can we finally once and for all just admit that the TV is all the screen we really need in our console lives?

I would buy it if it was cheaper. Deus Ex HR: Director's Cut looks sweet.

Eh, whatever. As long as Nintendo keeps putting out quality games, first party or not, I will keep buying their consoles.

New Super Mario Bros. U is extremely fun and addicting and I can hardly wait for Bayonetta 2, Zelda, and Metroid as well

Curious, do Microsoft and Sony make more money/have a higher profit than Nintendo?

I bet no one really knows except the CEOs and others in said companies but it could be possible that Nintendo fares the worst out of the big three. Of course this is relative since none of these companies are going away anytime soon. (Though I do see Microsoft making it's own coffin for the NextBox.)

In any case, it would be nice to hear from another analyst not because I don't like Pachter but because I like variety.

Next gen cheaper then their predecessors? Yeah I think we're done here.

Fappy:

Pink Gregory:
Soo...is Michael Pachter literally the *only* games industry analyst?

He's certainly the only one I ever hear about. Now that I think about it I have never seen/heard him say anything positive about Nintendo. Wonder what that's about.

Funny how the title makes him seem more legitimate by leaving out his name.

itsthesheppy:
Assuming for the moment that the Wii U is at least not burning the world down with sales figures, can we finally once and for all just admit that the TV is all the screen we really need in our console lives?

Nope, I love the off-screen play so much that it is actually influencing what console I buy certain titles for

I'd probably buy one if it was cheaper. Or when Bayonetta 2 comes out.

Pink Gregory:
Soo...is Michael Pachter literally the *only* games industry analyst?

Not the only, but the only one that both speaks to the public and (mostly) speaks sense.

On Nintendo he's said for a few years that their software development is great, but Nintendo's ability to make money from it is held back by their hardware strategy. More specifically they rely on their first party games (Mario/Zelda in main) to sell the hardware, but as the Gamecube proved first party software alone doesn't always shift consoles, so Nintendo are limiting their own sales by hoping customers buy the hardware for the four or five fantastic pieces of software available on it.

For the Wii it didn't really matter as the Wii caught onto a fashion trend, but it counts doubly for the Wii U, since it doesn't even have those first party games yet, it's effectively a non-product as far as most gamers are concerned.

He reckons Nintendo would make more money abandoning home consoles and selling their games on other platforms. I can't say I agree with abandoning hardware, but I can't deny I would totally re-buy Metroid Prime and Twilight Princess if they ever hit the PC.

I don't agree with him all the time, but there's usually logic behind his ramblings, it's better than a lot of analysts who seem to just repeat the press releases. Also, his advice on pre-orders is good (why would you pay in advance for anything?), more people should listen to it.

I honestly hate it when you log on gametrailers and see his face plastered everywhere. You watch his video's and all he seems to do is talk out his ass, insult his fans and shower himself with self gratification and praise. He rambles on about his life like anyone cares?

Yeah, we really need a new analyst.

itsthesheppy:
Assuming for the moment that the Wii U is at least not burning the world down with sales figures, can we finally once and for all just admit that the TV is all the screen we really need in our console lives?

Asynchronous multiplayer has rather large potential. Imagine a social FPS like N64 Goldeneye, but each of you has his own screen. Or a Tank simulator where each person has his own job. There are certain things that would be impossible with only one screen, and I am looking forward to hearing about them.

I didn't like the wii, the motion controls were gimmicky and poorly implemented(the only well implemented games were like metroid prime and other first parties and that were at launch, they only got worse with time), but it plays gamecube games well and lets me watch netflix without charging me money for a service I won't use.

I don't have too much more interest in the Wii U, but I would buy it easily over the other game systems because its a actual video game system. With sony and microsoft putting out weak gaming pcs with what amounts to slave collars included I have little to no interest in this console generation outside of the WII U and VITA and I require better services and price drops from both before I spend money on either of them.

kailus13:

itsthesheppy:
Assuming for the moment that the Wii U is at least not burning the world down with sales figures, can we finally once and for all just admit that the TV is all the screen we really need in our console lives?

Asynchronous multiplayer has rather large potential. Imagine a social FPS like N64 Goldeneye, but each of you has his own screen. Or a Tank simulator where each person has his own job. There are certain things that would be impossible with only one screen, and I am looking forward to hearing about them.

I've heard about games like that and while they're neat, how can they appeal to a mass market? I suppose Rock band could do it, but that phenomenon doesn't seem too eager to repeat itself. and let's face it, getting a group of people together to pretend to play Guns n' Roses hits is more appealing a prospect than getting a roomful of people interested in a tank sim.

TheProfessor234:
Curious, do Microsoft and Sony make more money/have a higher profit than Nintendo?

Last year, yes and yes. Over the last five years, no and no. Over the last decade, no and maybe.

Nintendo made their first annual loss ever last year (2011-2012) on account of the 3DS failing to make the intended impact and the Wii U being in development. Microsoft and Sony made money on games (but not elsewhere, MS/Sony's wider spread of products make them hard to compare to Ninty as a whole).

Five years ago Nintendo walked off with all the money thanks to the Wii and DS being at the height of their powers. Whilst Sony were wondering what went wrong and Microsoft were red ringed into financial oblivion.

Ten years ago, Nintendo turned a profit on both the N64 and the Gamecube, albeit small ones compared to all crushing PS2. Largely irrelevant though as they made scads of money with the GBA and the DS. Microsoft lost money on the Xbox all through it's life, they were in that generation purely to gain a market share.

Who made the most money overall? Sony or Nintendo, depending on how badly the PS3 (and PSP:Go, Vita) release burned Sony and whether income from third party releases on the Wii ever approached the gigantic levels of income they did for Sony across PS1/2/3. At a pure guess I'd say Nintendo, probably.

Fappy:

Pink Gregory:
Soo...is Michael Pachter literally the *only* games industry analyst?

He's certainly the only one I ever hear about. Now that I think about it I have never seen/heard him say anything positive about Nintendo. Wonder what that's about.

Well to him, it's the cool thing to do. He thinks it makes him more popular if he bashes Nintendo and praises Sony and Microsoft.

Oh fuck off Pachter.

No, seriously. This guy is just a massive douchebag, and he's almost always wrong. This is the guy who thinks Skype would be a killer app for the next Xbox.

The key reason for Pachter siding with Sony and Microsoft lies not so much in games, but in all the other things next-generation consoles are supposed to bring to the table. Pachter cites multimedia functionality and video playback as two key elements that could propel the PS4/Xbox 361 over the Wii U.

Wow, yeah, what a killer app. If only the Wii U had some sort of multimedia/video functionality... like, I dunno, TVii or Netflix, or an integrated Youtube app...

Plus, Pachter believes that the new Sony and Microsoft consoles may be even cheaper than their predecessors. "If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model)," Pachter states. "If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect.

So, without any sources or evidence, Pachter is not only claiming that Sony and Microsoft will sell their consoles on contract a la mobile phones, but that consumers will be ecstatic about this? Word to the wise Pachter- gamers are getting already frustrated that they're having to pay Microsoft for Live. If Microsoft were to base their entire console approach on getting users to pay a monthly fee for the console and online, they would be furious. Sony even moreso, as their current network is free.

And all of this avoids the fact that even if Microsoft and Sony do this, Nintendo's online infrastructure will be free. Multiplayer, Miiverse, eShop access, app downloads, all of it will be free to Wii U owners. You know why jailbroken phones are so popular? Because millions of people prefer to pay for a bit of hardware upfront and then use it as they want, rather than having to pay a contract fee every single month. Sony and Microsoft will make the Wii U more attractive if they try to gouge consumers with a monthly price plan.

Pachter believes that the Wii U will have sold a mere 55,000 units during its fifth month in existence, marking a 17-percent decline over the previous month. What's worse, Pachter believes this trend will continue, even if Nintendo opts to drop the price of the console.

Funny, because if he'd even checked the most ancillary of gaming news sources, he's have found that retailers are reporting a rise in Wii U sales. In the UK, sales rose by 125% following the release of Monster Hunter 3 Ultimate. A sales jump that also happened to coincide with a price-cut at HMV. The sort of price-cut that Pachter is saying wouldn't create a sales jump...

I'm sorry, but surely that there should destroy whatever credibility he claims to have? The fact that he made grand claims without even bothering to check any news sources just shows that his claims are nothing more than random bouts of pomposity, not claims informed by anything like rational logic.

That said, Pachter has a history of being right about this sort of thing - hence why Wedbush Morgan pays him the big bucks to predict the future of the gaming industry.

Pachter couldn't predict weather if he was reading it off an autocue. His predictions have gone wrong time and time again, and the only reason Wedbush Morgan pays him is because his jumped up claims continually get press from news sites like the Escapist. The only reason he's employed is because you guys keep putting him on the news pages.

I know I've got a reputation round here, but this isn't just about my feelings for Nintendo. Michael Pachter is the most laughable analyst I have ever come across, and it has been shown time and again that he doesn't know what the hell he's talking about. I also find it incredibly cynical of the Escapist that they elected to hide his name from the news title. I went into this article expecting an actual analyst here, then discovered it was the same old Pachter doing his same old "Nintendo suck" schtick.

The WiiU won't sell without games?

shit, Pachter, you really wrecked your brain over that analysis there, now did you?

fix-the-spade:
Snip thing I guess

Thanks much for the information. I guess it's possible that Nintendo's transition from the Wii and DS to the Wii U and 3DS would kind of spell out 'doom.'

Oh if its Micheal "Borderlands is being sent out to die" Patcher then this means the WiiU will shoot to the top of the sales charts and stay there until the PS4 arrives.

Besides, Monster Hunter is on it now. Im buying mine as soon as i can scrape together the money.

fix-the-spade:

TheProfessor234:
Curious, do Microsoft and Sony make more money/have a higher profit than Nintendo?

Last year, yes and yes. Over the last five years, no and no. Over the last decade, no and maybe.

Nintendo made their first annual loss ever last year (2011-2012) on account of the 3DS failing to make the intended impact and the Wii U being in development. Microsoft and Sony made money on games (but not elsewhere, MS/Sony's wider spread of products make them hard to compare to Ninty as a whole).

Five years ago Nintendo walked off with all the money thanks to the Wii and DS being at the height of their powers. Whilst Sony were wondering what went wrong and Microsoft were red ringed into financial oblivion.

Ten years ago, Nintendo turned a profit on both the N64 and the Gamecube, albeit small ones compared to all crushing PS2. Largely irrelevant though as they made scads of money with the GBA and the DS. Microsoft lost money on the Xbox all through it's life, they were in that generation purely to gain a market share.

Who made the most money overall? Sony or Nintendo, depending on how badly the PS3 (and PSP:Go, Vita) release burned Sony and whether income from third party releases on the Wii ever approached the gigantic levels of income they did for Sony across PS1/2/3. At a pure guess I'd say Nintendo, probably.

Nintendo actually sold the most software this gen with the Wii. In total, they sold I believe 820 million units of software, whereas the PS3 last I checked had sold somewhere in the region of 600 million. The Wii had (according to Wiki) 103 different titles sell 1 million copies or more, which again is far more than any other console. And lastly, the biggest selling games this generation were all developed and published by Nintendo. Wii Sports Resort sold 31 million, Mario Kart Wii sold 34 million, Wii Play sold 28 million, etc etc. Nintendo didn't just make a lot of royalties from the dozens and dozens of games that sold millions on Wii, they directly profited from their own games outselling Call Of Duty.

And then of course, there's the DS, which is the single most successful console ever.

Sony may be worth more, being a larger company with more assets and such, but Nintendo's got around $10 billion in cash sitting in the bank ready to be spent. The PS3 didn't make anything like that, and in fact has been posting losses for a while now.

Nintendo is the only hardware company to actually make hardware production a sustainable business. The other two need their other divisions to cover their losses, and in Sony's case that's starting to really affect them. Personally I find it a huge shame that Pachter seems to think the only hardware company to have consistently posted profit is the one that needs consistently bashing. Purely from an economics point of view, Nintendo's methods provide much more money than Microsoft or Sony's, and as an analyst he should be aware of that.

He's right, but for the wrong reasons.

The console needs games, they could give the Wii U away free in breakfast cereal and it still won't catch on until it gets some proper original games, I mean something other than dancing games, and re-hashed ports.

Monster Hunter will help in the short term, but it needs a lot more.

RaikuFA:
Are we suprised this guy's talking shit about Nintendo again?

Well, seeing as Nintendo hasn't done a single thing to make anyone want to buy a Wii U... No, we are not surprised

the thing could be $5; I still probably wouldn't pick one up until they gave me an actual reason to

They should have just waited until they had a launch lineup, as of now how many games are there for it? 12?

I'll be getting one eventually, but there are just no games out that warrant getting it (Still waiting on Pikmin 3...)

Adam Jensen:
I would buy it if it was cheaper. Deus Ex HR: Director's Cut looks sweet.

SEE THAT, FUCKING INCENTIVE RIGHT THERE!.

But seriously I would too if they dropped the price and it just proves that it would sell more if the price were dropped and this Michael fellow is talkign right out of his ass.

Who the hell buys a console not for the games but for only multimedia playback?, no seriously who does that?. Also a cellphone based model screams Xbox live and if both Sony and MS were to do that they can consider themselves fucked royally because I'm done with the Xbox live business model and it really needs to go die in a horrible digital fire because it really doesn't benefit the customer at all but pay for the privilage.

Adam Jensen:
I would buy it if it was cheaper. Deus Ex HR: Director's Cut looks sweet.

I never thought you were a Deus Ex fan... All this time and I am only just learning of this... Yes, I am joking

OT: I kinda agree with him. It's not the price that's the main issue, it's the lack of games. When the games come out it will probably pick up just like with the 3DS.

Fappy:

Pink Gregory:
Soo...is Michael Pachter literally the *only* games industry analyst?

He's certainly the only one I ever hear about. Now that I think about it I have never seen/heard him say anything positive about Nintendo. Wonder what that's about.

He actually did say something (somewhat)positively about Nintendo few days (or weeks) ago. He said that he doesn't think that Nintendo knows what they are doing with the hardware, but that he trusts and would never question Nintendo's software strategy and development process.

As for Nintendo being doomed... yeah right. Like every generation. Remember the Wii? Remember how people still say, even today, that the Wii sold lots of hardware, yet little software? Well, people need to realize that the 6 best selling games this generation are all Nintendo games.
If we include DS games, even much more games are Nintendo games.

I just wonder if the time will ever come when people will stop underestimating Nintendo and their games. You may or may not like them and that's perfectly fine, but you can't argue that Nintendo software sells bad.

wiki:
In the first 18 months of release, the Wii sold over 50 million games, not including the bundled Wii Sports or Virtual Console games. Not only does this best the sales of this generation's competitors, but it is larger than the extremely successful PlayStation 2, which had 42 million. About 8 million units separated the Xbox 360 and PS3; the former had 28 million while the latter had 20 million.

So the Wii actually sold more software than the "legendary" PS2 during it's first 18 months and it sold more than the PS3 and 360 combined.

I like how it says "Analyst" in the news title, and not "Pachter", as then nobody would even click the link.

itsthesheppy:
Assuming for the moment that the Wii U is at least not burning the world down with sales figures, can we finally once and for all just admit that the TV is all the screen we really need in our console lives?

No. No I can't. Because as it stand now that 'gimmik' makes the Wii U by far the most interesting of all the consoles on the market as well as the ones that were recently announced.

Michael Pachter is a babbling idiot, but he is not incorrect in my opinion (which is all this really is for everyone, even the amazing illusionist Michael Pachter). You don't need to be an industry analyst to figure out that gamers won't buy something that there is no good software for. It's definitely not rocket science... and thank god because I don't believe you could trust any science that Michael Pachter was involved in.

Patcher has a history of being right more often than wrong? The guy who said we were in the last generation of consoles before the Wii U came out.. who said that the Kinect would sell for $80, that GTA: V would be out in 2010. That GTA: V would be out in 2011. That Xbox Live would offer a platinum membership for $100/mth. That Assassin's Creed II would be set in the 17th century, and how in October 2008, EA was a strong buy albeit with some poor management. It then proceeded to drop to 8yr lows, and hasn't recovered to that October price yet.

The guy has a history of being right once in a while.. usually about things which are no brainers: Like how GTA:IV will sell well.

I'm not sure if I believe any "forecast" of the PS4 / XBox whatever until we see something more finite. Too much stuff has suggested that MS might go "always on drm", and if they do I personally won't buy their system. Sonys on the same watch list. I don't care that they said it will play used games. The confirmation it would play used games was peppered with too much legal double speak, and I can't help but think that Used games might have a catch 22 hidden somewhere. I'd rather stick with a Wii U and PC before I hand over any money for DRM laced cookies.

I entered the thread thinking "Surely it's not just Pachter again."

But of course it was.

Anyway, he's kinda right. A price cut AND game releases will help the ailing WiiU.

Especially when the new consoles are released and they're $500.00...

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