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Published on November 21st, 2012 00:03
The launch of a new console provides a moment of clarity and reality after months of pre-release hype and speculation. The future of the Wii U is still wide open, with much depending on Nintendo's ability to improve the system's software, release compelling games, and convince third party publishers to support the console with impressive software. Some things are already happening, though, which may give some indication of the Wii U's future prospects.
First of all, the Wii U is already sold out at retailers across North America, according to reports. Over 2500 units have appeared on eBay already, though, at prices from $400 to $500 as some early buyers attempt to cash in. This sounds like there's solid demand, yet it's not as fevered as the demand for the Wii after its launch in 2006. The (then) $250 Wii console was selling for well over $1,000 on eBay well into 2007, and it was many months before supplies caught up with demand for the Wii.
Something unprecedented has occurred during this new console launch: Two major retail chains are offering discounts on Wii U software. This has never happened before at the launch of a new console, according to industry veterans. Toys R Us is running a sale: Buy one Wii U title, get the next at 40 percent off. Target is running a similar sale: Buy two Wii U titles, get the third at 50 percent off. Those prices mean the retailer is essentially giving up all profits on the software it is selling. Does this mean these retailers are trying to attract hardware buyers for the Wii U? Or are the retailers just concerned that Wii U software isn't going to sell all that well, and worry about being stuck with hard-to-sell inventory?
“It's going to be a tough retail season, and given the increasing Black-Friday driven shopping culture, this is a tactic designed to ensure that the store in question is the primary shopping source for the Wii U,” said Scott Steinberg of TechSavvy Global. “If they get you in the door to buy Wii U software at a discount, chances are you're going to do all your Wii U shopping at that specific retailer.”
"If they get you in the door to buy Wii U software at a discount, chances are you're going to do all your Wii U shopping at that specific retailer"
Scott Steinberg
The retail struggle in a soft game market is more intense this year than ever before. “This is certainly a first in history, and it points to the state of the retail and set-top console market,” said Steinberg. “In the past you would never see retailers discounting premium launch software for a console system. In most cases it's an opportunity to mark prices up. But I struggle to remember the last time a console launch had so much software available.”
Michael Pachter, senior analyst with Wedbush Securities, agrees that this promotion is being driven by the needs of retailers rather than any perceived weakness in the Wii U. “Keep in mind that they don't have many Wii U hardware units, and that the total shipped to the US is probably well under 1 million for the launch, so their risk is that they sell 100,000 or so titles at no profit,” Pachter said. “It's a loss leader to drive traffic. I don't think it's a signal about the health of console sales at all.”
The Wii U may be sold out for the moment, but the early buzz on the console is mixed. Some reviewers gave the console an Incomplete, since many of the Wii U's features were unavailable until a last-minute firmware patch was delivered just before launch (too late for reviewers). Others liked the Wii U, but almost all reviewers agreed that the full potential of the Wii U remains to be unlocked. None of the launch titles seemed to be destined for classic, console-defining status similar to Super Mario Bros. or Super Mario 64.
The Wii U is in limited supply for the moment, but the true test of its selling power will come when you find it easy to walk into a store and buy one. The competition looks daunting; both the PS3 and the Xbox 360 will be available this weekend for $199, which includes a 250 GB hard drive and several games. That's an advantage of hundreds of dollars over a Wii U (counting the cost of software) that's roughly equivalent in graphics power; the PS3 and the Xbox 360 have robust libraries of software (many at lower prices for classics or used software) and proven online communities and extensive arrays of entertainment, low-cost downloadable games, and other features.
The Wii had two distinct advantages at launch; it was half the price of competing consoles (though it lacked the processing power and HD output), and it had a unique, easy-to-grasp interface with the Wiimote motion control. The Wii was readily understandable by anyone in the family, regardless of prior game experience. Grandma could grab a Wiimote and bowl or play tennis readily.
"Nintendo has set up the Wii U for failure"
Dan Hsu, GamesBeat
The Wii U, by contrast, lacks both of the Wii's advantages. The Wii U is more expensive than the PS3 or the Xbox 360, yet it offers no clear graphics advantage. The GamePad has a daunting array of buttons and sticks as well as a touchscreen
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