Nintendo Could Be Forced to Discontinue the Wii U Next Year

Discontinuing video-game consoles is far from unprecedented. Sega released, and then rapidly abandoned, four consoles between 1992 and 1999, before ultimately exiting the hardware business entirely. has had its own failure -- it gave up on the Virtual Boy after just seven months.

Is the Wii U next? The console's first year on the market has been abysmal -- Nintendo has shipped just 4 million Wii U units, far short of its own expectations. After cutting the price, Nintendo is now selling the Wii U at a loss, and sales are unlikely to improve in the face of rising competition from Microsoft and Sony .

The Wii U has been a total failure
The failure of the Wii U is no secret. Originally, Nintendo had expected to sell 5 million consoles by last March -- but by the end of September, Nintendo had shipped fewer than 4 million units. In an effort to juice sales, Nintendo cut the Wii U's price by $50 in late August, leading to a 200% sales jump in September. But when the base number is so low, large percentage increases look better than they really are. Even with the spike in sales, Nintendo sold just 300,000 consoles from July through September.

Nintendo's management still believes that it can sell 9 million Wii U consoles by the end of March. That seems utterly insane in light of the increased competition Nintendo's console will face in the next few weeks.

Microsoft will steal Nintendo's core market
In less than two weeks, Microsoft's Xbox One will go on sale. At $500, it's far more expensive than the Wii U's $300, but for the money, Microsoft's machine provides far more value. In addition to serving as a true next-generation video-game console, the Xbox One is packed with entertainment features that could appeal strongly to Nintendo's core market.

The original Wii was massively successful in large part because it appealed to casual gamers. Although the Wii had its fair share of core Nintendo franchises, its best-selling games were titles such as Wii Sports Resort, Wii Play, and Wii Fit. Rather than rely on buttons, these games used simple motion controls, making them accessible to non-gamers.

Microsoft's Xbox One should tap into this market. Unlike the first Kinect, an optional add-on for the Xbox 360, Microsoft's second-generation Kinect is included with all consoles, which should lead to more developer support. Similar to the Wii, Kinect-based games use body movement instead of button-mashing, making them far easier to play.

Certainly, for those who bought Wii Fit, the Xbox One should be enticing. Microsoft has partnered with a number of famous trainers for Xbox Fitness -- interactive workout videos that rely on the Kinect's technical capabilities.

Unlike Sony, Nintendo can't afford to support a failing console
Losing the casual gamer would hurt, but the bigger threat to the survival of the Wii U as a platform is Nintendo itself. Nintendo is unique in the sense that it's the only console maker that's strictly a video-game company -- it can not afford to subsidy losing hardware for very long.

In contrast, Sony, as an enormous conglomerate, can. The PlayStation 3 sold poorly at launch, and Sony lost money on the console, but it was able to stick by its machine for the long-haul. Indeed, by taking a loss on the PlayStation 3, Sony was able to support another part of its business -- its Blu-ray technology beat out the rival HD DVD, as early PlayStation 3s doubled as cheap Blu-ray players.

Sony will sell its PlayStation 4 at a loss as well, though the company expects to recoup the loss on games and PS+ subscriptions. At any rate, Sony's PlayStation 4 is even more competition for Nintendo's Wii U. Like the Xbox One, it will go on sale later this month, but unlike the Xbox One, it's only $100 more expensive than the Wii U.

This holiday season will be crucial for Nintendo
On Nintendo's last earnings call, the company's president, Satoru Iwata, characterized the upcoming holiday shopping season as crucial, remarking that Nintendo would evaluate what it needs to do, "over the long term, about its platform" once the holiday results were in.

That could mean discontinuing the Wii U. Given that Nintendo's console will have to compete with two new machines from both Sony and Microsoft, the Wii U's holiday sales aren't likely to be good.

Got iPad?
's newest iPad Mini with Retina display might be hard to come by this quarter, given all the reports of supply constraints. Well, we're going to be sure to get a few -- and give them away! That's right: For the first time ever, The Motley Fool is hosting a contest where you can win a free iPad Mini with Retina display. All you have to do is tell us why you love The Motley Fool by clicking here! We'll pick the three most Foolish submissions to receive a free iPad Mini with Retina display.

See full terms and conditions by clicking here

The article Nintendo Could Be Forced to Discontinue the Wii U Next Year originally appeared on

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Increase your money and finance knowledge from home

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:
Dave Wells

Nintendo need to make there console, a) play blu-ray/dvd play back. & b) needs more multi media compatabilty. The idea around xbox is just that, but xbox charges for this. Nintendo only needs to change the firmware to play blu-ray. More would then buy there console. Simple, yet they dont see it?

January 02 2014 at 7:09 PM Report abuse rate up rate down Reply

Sam Mattera where did you get your degree? A cornflakes box???? Do your research and you will see that Nintendo is in a FAR better position economically than Sony is, hey just listen to Michael Pachter and he obviously dislikes Nintendo but he aknowledge how much money Nintendo have. Articles like this are really misleading and hurt a lot the market.

November 28 2013 at 3:18 AM Report abuse rate up rate down Reply
Tarunvir Singh Bains

Whoever wrote this article didn't put in an iota of research or doesn't understand how gaming console sales have historically worked, or the financials of Nintendo OR sony.

November 27 2013 at 11:55 PM Report abuse rate up rate down Reply
Tim Andrew Cannell

Nothing new here - is this a put up job ? New Wii U bundles 1/2 the price of 'next-gen' will see Sony and MS suffer over XMas..

November 12 2013 at 12:41 PM Report abuse rate up rate down Reply

Time to invest in Nintendo stock.

November 11 2013 at 8:23 PM Report abuse +1 rate up rate down Reply
Simon Stevens

Nobody is buying the xbox one for entertainment purposes, could have worked in 2006 but not in 2013/2014, not when smart tvs/boxes exist, pretty sure most would just rather buy a new tv and play games on Facebook and there tablets, you could buy a Nowtv box in the UK for 9.99 gbp, yeah, Microsoft don't have that crowd, which is why Sony were smart and said GAMES GAMES GAMES.

Sales for the Wii u are starting to pick up now and the system is gaining momentum, something this article ignored, probably because the author was picking at his ******* for raspberries, I highly doubt the ps4 and xbox1 will run this marathon people seem to think they will, I think they'll struggle too, especially when there's still good reason to stick with current gen consoles.

Will we see an apocalyptic article for them too?, probably not, more like a "xbox one sells 10k in it's first year, atta boy" "ps4 on route for greatness as it hits 2 million in it's third quarter", meanwhile Wii U will get dumped on again and again, as is the way of the media and Nintendo.

November 11 2013 at 8:13 PM Report abuse rate up rate down Reply

I cancelled my ps4 preorder and picked up a Wii U Zelda edition. WHY? Because I made an educated choice. I own a 360, ps3, Vita, and 3ds xl. I got oversaturated with the amount of free games on ps3 to the point of stressing out over hard drive space and time needed to finish the games to get them off the hard drive. So, I ran to my pretty Vita. Wow. That thing is a marvel of gadgets as I delved headlong into persona 4. After a tons of hours logged I still couldnt finish the game. As a father and husband, time is a rare golden thing that I dont have a lot one day I saw all these awesome nostalgic games that are coming out for the 3ds and I said...what the hell..ill get a 3ds xl. I havent seen a line up of games that are so good and so well done that are getting released back to back than what is on the xl. Pokemon, luigis mansion, link to 2 worlds, ocarina 3d, so on and so on. So my Vita literally has a thick degree of dust on it. Its not that I dislike my Vita, its because theres a charm and nostalgia to Nintendos software that is addicting. So I felt that a Wii U might be a good buy albeit a gamble. I downloaded windwaker and was blown away. The gamepad is great and the Miiverse is fun to interact with. 2014 will have more franchise games being released that are exclusive that you can't get on ps4/xbone. Counting out the Wii U is betting safe. The problem I find with articles like this is it provides negative trends for a company that is trying to push hard to get this system out to base users. Give Nintendo some hope. There have to be many more people like me out there.

November 11 2013 at 7:59 PM Report abuse +1 rate up rate down Reply
Bobby Slobby

Articles like this make me sick. Its like the media are trying their damnedest to make sure this thing fails. Sales of this console are starting to pick up, and I hope the Wii U does well personally. The gaming world would be a very, very dull place without Nintendo, but morons are pretty much wishing for it to happen. I'll laugh at people complaining when all gamers have it Sony and Microsoft with their abundance of first person shooters and crappy PC ports.

November 11 2013 at 6:12 PM Report abuse +1 rate up rate down Reply

Gotta love Nintendo fanboys on panic mode.

November 11 2013 at 12:49 PM Report abuse rate up rate down Reply

Here's a great rebuttal to this monumentally stupid click-bait article.

November 11 2013 at 12:33 PM Report abuse +1 rate up rate down Reply