Investor Reaction to Nintendo’s Wii U

Since the announcement of the upcoming Wii U console at this year’s E3 conference, Nintendo’s stock has dropped almost 10%. Yet Nintendo CEO Satoru Iwata seems puzzled as to why investors have dropped their support for the company.

If you like me sat watching the whole conference with your jaw dropped in amazement unable to take everything in, then you may also be wondering why investors of Nintendo would be so worried about backing the new console. It truly is incredibly, like most of Nintendo’s innovative ideas, yet it may not be the console which troubles the stock market, but the Nintendo’s conference itself. Some analysts have complained that Nintendo failed to discuss the finer specifications of the Wii U and focused too much on the controller and the 3DS’ line-up for the coming year.

In an interview with Reuters Iwata said,

“Honestly speaking, the reaction to (Tuesday’s) presentation and what I heard from people I met and the mood of the convention did not chime at all with what happened in the stock market. It’s very strange. ”

However, this reaction is not dissimilar to the reception of the Wii in 2006 and the 3DS last year in 2010, which received a positive reaction at the conference, yet was misunderstood by many investors. Nintendo’s ethos of having to see their consoles to believe them may be true, yet it has lost them potential buyers as well as stock shares.

Iwata continued to say,

“In the end, it is easy to get the mistaken impression that this is just a games console with a tablet. People who came to the presentation and tried it out have understood very well that it opens up a lot of new possibilities. But people who have not tried it will find it hard to believe that this controller will change things.”

Judging from the titles shown on the Wii U, it is clear that Nintendo is trying to market the new console towards more hardcore gamers – I’d never seen so much blood and gore in one Nintendo conference! Yet this may worry investors as it swings away from the proven successful formula that Nintendo created when they marketed the Wii towards families and casual gamers. The evidence that Nintendo are planning to rival Sony’s future Playstation console (dubbed the PS4) and Microsoft’s future Xbox console (dubbed Xbox720) is in Nintendo’s emphasis on the HD graphics and impressively hardcore franchises which they are bringing over.

Iwata commented that,

“At the moment, there is a barrier between the Wii, which is seen as for casual users and the other companies’ consoles, which are seen as for core gamers. We are questioning whether that barrier needs to be there. ”

Developers who had not initially backed the Wii were called into the conference to voice their support, such as Peter Moore and Frank Gibeau from EA known for their sports titles and Activision Blizzard who are the owners of the Call of Duty franchise. The games mentioned coming to Wii U were; Darksiders II (THQ), Tekken (Namco Bandai Games), Batman Arkham City (Warner Bros.), Assassin’s Creed (Ubisoft), Metro Last Light (THQ), Ninja Gaiden 3: Razor’s Edge (Tecmo Koei), Alien: Colonial Marines (SEGA) and Tom Clancy’s Ghost Recon Online (Ubisoft). During the Wii U gameplay presentation the focus was overtly on hardcore, adult games, as the whole presentation screamed ‘PS360’ competitor, which a ludicrous amount of machine guns, guts, blood and violence, especially during the showing of Ninja Gaiden 3: Razor’s Edge. This is by no means a bad thing, yet it may have potentially concerned investors who had jumped on the Wii shares bandwagon when their family gaming market focus was taking the lead in sales.

Whatever your opinion on the Nintendo’s gaming target market for the Wii U, it is undeniable that the hardware looks incredible, innovative and a gift to the gaming world. If developers use the kit correctly I would bet my future life saving to see stock shares for Nintendo boom.

5 Responses to “Investor Reaction to Nintendo’s Wii U”
  1. MD1500 says:

    This is nothing new. Every time Nintendo announce a console, everyone thinks that they’ve gone mad. Lets face it, their ideas are always pretty crazy.

    When they dropped their successful Game Boy range to make a handheld with two screens, I bet everyone thought they’d gone insane.

    Investors fear change.


  2. Good article.

    While it’s certainly true that the strangeness of the Wii and some other seemingly “odd” ideas have caused people to doubt new releases, stock dropping at hardware announcements is the norm for the industry. Even when a system is announced that most people think sounds great, there’s still usually a drop in stock, and this has happened for the most successful consoles and for all the companies, not just Nintendo.

    I find it odd that Iwata said it’s very strange, as he should know better than anyone that this happens…


  3. ManiLink says:

    I think the problem that nintendo face with the Wii U – is that they may have shown their hand too early….With the Wii Nintendo were the crazy ones. The company which was in third place and was making one last ditch effort to remain relevant. People were wrong and the Wii was a Success. However this time they are being watched very closely – and their controller is only a different application of technology that already exists in devices like the iPad and PlayStation Vita….I am sick of the comparisons between Wii U and iPad – as the iPad is missing one the Wii U has in abundance. Buttons. The Vita however is primed to steal Nintendo’s Thunder and its worrying to think that by showing their hand to early – Sony or Apple will attempt to beat them to the punch. I am very excited for the Wii U however I don’t see them being as successful as they were with Wii….I think the DS was a good measure to see how well the Wii was going to do much like the 3DS may be a good indication of how well Wii U will do in the marketplace. It will sell to the nintendo fan and some of the ones nintendo lost this time around – but I don’t think it will be a straight out the gate home-run phenomenon like the original Wii.


    • ktx8 says:

      I agree, the Wii U isn’t going to sell itself as well as the Wii did, Nintendo are going to have to cleverly promote this one to get the same amount of sales as the Wii did. I just hope as you said that Sony and Microsoft don’t try and beat them to it.


    • I actually think Nintendo have gotten into a pretty decent position. Yes, they show their hand with the Wii U early, and we’ll probably see Microsoft and Sony borrow the successes (and ignore any failures) of Nintendo’s new system when they make their own next-generation consoles. But that’s also what happened with the Wii. Eventually Sony and Microsoft jumped on the motion-control bandwagon. But I think Nintendo actually have the right idea with timing.

      We’re seeing a pattern where Microsoft and Sony are releasing their consoles around the same time, and Nintendo aren’t. With the Wii recently, we’ve seen the obvious disadvantage for Nintendo. Towards the end of a console’s lifespan, the other two companies have released far more powerful consoles and the Wii is a clear loser in the battle for a while. But when Nintendo releases their new console, they’re now ahead and dominating for a while, waiting for the other two to catch up. People might say, but how is this a better strategy than what Sony and Microsoft are doing? Sure, Nintendo end up down for a while, then up for a while, but so do the other two. They dominate with their new console, then suffer when Nintendo releases their new console. So what’s different? Competition during a successful period.

      When Nintendo is losing out to the other next-generation releases (rumoured for 2013-2014), there isn’t a clear winner. Microsoft and Sony are having to battle each other for customers, both having the most powerful consoles available on the market. Sure, they’re at the top of the console wars at that moment, with Nintendo having an older console, but they are having to SHARE that top spot. Fast forward a few years and Nintendo releases “early” and dominates. When Nintendo dominates ahead of time, they keep that top spot for themselves. The other two share the lower spot. This recent pattern of releases has resulted in a situation where Nintendo are the only option if you want a brand-new console.

      As for it not being as successful as the Wii, I’m not sure yet, but I think it could do quite well. I understand why people feel it might not be as successful as the Wii, as it brought in people who would never buy a console or even play computer games. Grandmothers playing Wii Tennis and families sitting in living rooms playing party games. These things happened before, of course, but never on the scale that the Wii has. It’s created a whole new group of gamers.

      Hardcore gamers, including a lot of Nintendo fans who left during the Wii generation because they missed out on the best 3rd party titles and latest technology, can be tempted back by a powerful system. But I don’t think that’s the only area where the Wii U will succeed. Some people have been poking fun at the name, and some wish that it didn’t include the “Wii” brand, since it should be a totally new beast altogether. But I think Nintendo were very wise to include the Wii brand in the title of the new console. Although it’s a new console, Nintendo can say it’s a Wii. It’s a different Wii, but it’s a Wii. It’s the next Wii. There are millions of new gamers, with no interest in Microsoft or Sony, but a fresh interest in Nintendo since the Wii pulled them into gaming. This new console actually means something to them. This is the new version of that thing you’ve been playing and enjoying! They know what to expect. What kind of quality, what type of games.

      The Wii U might not pull in the same number of non-gamers as the Wii did, but I think it’s more than capable of keeping those new gamers purchasing Nintendo consoles.


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