Calls for Wii U price cut begin after Nintendo financials
City analysts are calling for more major titles and a price cut to aid Wii U’s momentum following Nintendo’s disappointing financials.
Nintendo said this morning that it had sold just over three million units of its new console between launch and the end of December 2012. Software sales were revealed to be 11.69 million, and it cut both hardware and software sales forecasts as a result of the disappointing results.
The consensus among city analysts is that Nintendo needs to act fast to maintain sales momentum. A report on Business Week notes that a weak Yen is boosting the earnings outlook for the platform holder, but the analysts quoted in the piece weren’t quite so positive. “The result is worse than expected,” said Myojo Asset Management’s Makoto Kikuchi. “The company needs to do something to get out from a money-losing structure.”
The Business Week report also notes that before today’s financials, Citigroup analyst Soichiro Fukuda stated in a January 14th report: “Nintendo is in a situation where it needs to launch major titles to ensure quick momentum improvement. If currently poor momentum continues through April to June, then we could see an early price cut, as with the 3DS.” Amir Anvarzadeh of BGC Partners Inc added: “These are horrible sets of numbers.”
A report on 4-traders.com quotes Macquarie Securities’ David Gibson: “The business is not firing on all cylinders. It had a bad Christmas. We thought it was going to be bad, but this is even worse.”
It adds that Gibson believes Nintendo may be forced into a price cut and “accelerated introductions of popular game franchises”. It also notes the expected announcement of Sony and Microsoft’s next-generation consoles as a threat.
Reuters’ report on the financials describes Nintendo’s outlook as “grim”. Bayview Asset Management’s Yasuo Sakuma said of the results: “We have been prepared to see weak sales forecast for Wii U as its sales performances in various regions have been widely reported. But it was negative to see a lower forecast for 3DS software as it is one of the company’s main sales drivers.”
Nintendo fans will take heart from last week’s Nintendo Direct, which brought news of new Super Mario and Mario Kart games, plus a new Wind Waker HD remake. You can read more about Nintendo Direct here.