Nintendo needs content, reason why profits are falling
Iwata has recently commented on Nintendo’s earning reports released yesterday. However, the reason why profits are falling as well as the reason why the price cut wasn’t a huge boost was because of content.
We called it a month ago, the price cut was not the answer. “With the price drop, sales returned to a certain level, but they just did not reach the level of last year around this time.” We stated that software and content in that software was to keep sales high and it seems Iwata knows that aswell, “Wii has stalled. We were unable to continually release strong software, and let the nice mood cool.”[1]
Really? You don’t say? It is actually great that Iwata sees this, but the fact remains that the first half of this year and last half of last year had no great first party games to push console sales. Reggie even once said that Nintendo’s job is to get the Wii console into as many homes as possible. When Nintendo’s software lineup is what is has been for the last year, selling hardware can be a difficult task. Then the momentum slowed and a price cut was released.
Lets go back and evaluate what Iwata stated though, “ but they just did not reach the level of last year around this time.” This has an easy answer, Wii Fit, Smash Bros., and Mario Kart. Those 3 have combined for an astounding 50 million copies sold, and were in the top 5 NDP all year, from release through Christmas. Lets take their fall line up for example, how well did Wii Music and Animal Crossing sell comparable? Now, lets talk about their spring line up…oh wait there wasn’t any. This is the reason why Wii sales fell. Content sells hardware.
If you look across to another company in Apple, they just recorded skyrocketing profits recently. Now this isn’t anything new as Apple is a company who knows how to make profit. You’ve never wondered how Apple can keep their products at the same high price level every year, all year? It is because of content, which Apple continuously releases. About every year they release an enhanced OS, add changes to their software, and increase performance in their hardware, every year! iLife, their creative suite of software applications, keeps getting simpler and keeps innovating. At first it was about music, and photos, but every year Apple adds something fresh that people who have no prior knowledge of can succeed in, like blogging( iWeb), and music creation(Garageband).
Content sells!
The bright side is Nintendo has New Super Mario Bros. coming out aswell as backup titles in Wii Sports Resort and Wii Fit Plus for the holidays. Funny though as NSMB will sell through the roof and everyone including analysts will contribute Wii sales to the price cut, not the real reason, content. Thing is, Nintendo didn’t need a price cut had they had the right software and content in that software.
Wii Fit may not be everyones cup of tea but when you can sell a “bathroom scale”, as Iwata likes to say, to over 20 million people at almost double the price of a regular game due to the content. That’s saying something.
Comments
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!