Publishers to Nintendo: "Wii don't need U."
Posted on Friday, May 23 2014 @ 07:12:04 PST
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The Wii U does not play nicely with third-party publishers. Its computing power is insufficient to support straight ports from other eighth generation consoles. The GamePad’s inset screen demands special design considerations. Sparse documentation and clunky tools (http://www.eurogamer.net/articles/digitalfoundry-2014-secret-developers-wii-u-the-inside-story) plague Wii U development efforts with additional financial risk.
For Nintendo, such contrarian design decisions are familiar territory—the literal kin to cartridges and mini-discs in ages of CDs and DVDs or a motion-based game controller shaped like a TV remote. Some, with Nintendo likely counted among their number, would argue that the bucking of convention is an idiosyncratic hallmark of the company that forces innovation and drives success. Some publishers, trying to build businesses around said idiosyncratic hallmark, would likely reply that it’s a huge pain in the ass.
Now, with the anemic two-year sales of the Wii U, the largest of those publishers are handing Nintendo a knapsack containing all of its bullshit and kicking it out the door.
How do I know? Because the publishers told me, as did Nintendo itself, all via their public annual and quarterly reports, from which all the following data is taken. As a reference point for most of the graphs that follow, the Wii was launched in 2006 and the Wii U was launched in 2012.
Let’s start with Ubisoft, the most Nintendo-friendly of the Big Three:
Ubisoft threw considerable support behind the Wii U, developing launch title ZombiU exclusively for the platform. The result was Nintendo's console revenue share crumpling from first to worst, halving in percentage contribution, and declining year over year. Over 75% of remaining Nintendo revenue at Ubisoft is generated by Wii software.
If Nintendo fell to its early Wii days at Ubisoft, it plummeted below the GameCube ages at Activision Blizzard. With the Wii U and Wii making up only 9% of Activision’s console business after a 25% YoY decline, those delayed Wii U version announcements for certain flagship IPs start to look a tad less like oversights. At least Nintendo will get Skylanders.
Electronic Arts has abandoned Nintendo with an unprecedented dearth of software support. There are no major upcoming Wii U games. There are no major upcoming Wii U ports. ‘Wii U’ does not appear as a dropdown option on EA’s website. While EA might still accept the odd Wii U publishing engagement, it has specifically excluded Nintendo consoles from any present and future owned IP offerings.
But wait, it gets worse.
The GameCube era is often brought up as an analogue to Nintendo’s current plight: If Nintendo survived that boat anchor of a console, why can’t it demonstrate equal resilience through the Wii U era?
One major difference is that the handheld market is no longer a place where AAA publishing houses play. In addition to a bonus glimpse at the revitalization of the PC gaming market and the rise of mobile, the charts above show that handheld revenues in 2013 are effectively nonexistent. The point is not that all of Nintendo’s various dimensions of DS are going to tank, as AAA publishers are likely not representative of the majority handheld volume. Rather, no handheld relationship with Nintendo means that Ubisoft and EA have no reason to make concessions to prop up the Wii U in exchange for favorable handheld terms. Did that happen during the GameCube era? No idea. But it absolutely cannot happen now.
In EA’s case, no handheld revenue means that the entire company has a nearly zero Nintendo game footprint. Activision Blizzard could not be charted because its handheld sales were so small that it chose to roll them up under the category ‘Mobile and Other’.
“But so what?” say the Wii-fenders. “Nintendo makes all of its money off of first-party titles and… Japan? It has never needed tons of third-party support.”
If the Wii U were on the same trajectory as GameCube, I might be inclined to agree with this statement. Let’s take a look at the performance of Nintendo’s latest console against its priors.
In Nintendo’s 64-bit-plus history, the Wii U had the worst hardware launch, the worst second year sales, and the worst YoY trend. Current Wii U hardware volume is running a whopping 35% behind the GameCube over the same timeframe. Exacerbating Nintendo’s woes is a lowest-ever cumulative tie ratio, meaning that less software is being bought per console sold than ever before.
So with fewer consoles AND a lower tie ratio, either the hardcore fans are abandoning Nintendo more aggressively than previous casual adopters, or there are simply fewer games overall. While I can’t speak to the first point, Nintendo has provided clear data on the second.
Straight off a cliff.
The Wii U is caught in a death spiral. It lacks the user base to entice third-party publishers, and it lacks the third-party publisher support to expand its user base beyond core Nintendo loyalists. With $3.3 billion in the bank, Nintendo will avoid making the Wii U its Dreamcast—but just 3 years ago, the company’s coffers held over double the current amount. If Nintendo wants to continue with its esoteric ways, its next offering needs to be either prescient, lucky, or focused enough to survive on first-party bread alone. Third-party publishers have had enough.
The opinions expressed here do not necessarily reflect the views of GameRevolution, but we believe it's worthy of being featured on our site. This article, posted earlier in May 10, has been lightly edited for grammar and image inclusion. You can find more Vox Pop articles here. ~Ed. Nick Tan