Nintendo Is in for a Disastrous 2014

2013 was a challenging year for Nintendo, but 2014 is shaping up to be a disaster. Could this be the year that the company descends into an irreversible downward spiral?

Mar 8, 2014 at 7:00AM

Screen Shot


It's no secret that Nintendo (NASDAQOTH:NTDOY) is in trouble. Whether or not the company can turn things around is still open for debate, but the future has never looked so bleak for the world's oldest and largest gaming company. The handheld market that Nintendo once had a firm control over is rapidly veering in a different direction and threatens the company's most important source of income. Sales of its 3DS handheld were down in 2013 and sales targets were reduced from 18 million units to 13.5 million units. Meanwhile, the Wii U is on track to go down as one of the biggest failures in the history of the industry.

If 2013 was a bad year for Nintendo, 2014 looks to be much worse. With the 3DS beginning to show its age and the Wii U unlikely to find any notable traction, the company is in for a beating. Here's what Nintendo is up against in this year.

Mario's sunshine
2013 wasn't all doom and gloom for The House that Mario Built. Nintendo reported that 3DS software sales were up an impressive 45%. Given the expansion of the system's user base and the strength of its 2013 lineup, it's easy to see where this growth came from. Games like Luigi's Mansion 2: Dark Moon, Monster Hunter 4, Pokemon X and Y, Animal Crossing: New Leaf, and The Legend of Zelda: A Link Between Worlds all put up great numbers last year. What's more, that list excludes a number of titles that passed the million unit sales mark. If that seems like a lot of big games for one year, it is.

Where are 3DS's 2014 games?
Nintendo's 2014 3DS lineup looks substantially weaker than what was put forth in 2013. The only game scheduled for a 2014 release that looks to have massive sales potential is the upcoming "Super Smash Bros." sequel. The title will be the first in the series to land on a handheld, although a similar version of the game will also be hitting the Wii U. The drop-off in lineup quality and depth is massive and is indicative of the development and management problems Nintendo has suffered in recent years. Even though the installed base will grow substantially this year, 3DS's software numbers are likely to take a sizable hit.

Nintendo can't prop up two platforms simultaneously

Screen Shot


If you want to know how the 3DS wound up with such a weak 2014 lineup, it's important to understand why 2013's was so stacked. The 3DS got off to a dismal start, launching at a $250 price point (that the market soundly rejected) with a slew of games that did little to justify the system's existence. After the incredible success of 2004's DS hardware, Nintendo saw its handheld empire beginning to crumble. The company implemented a substantial price cut and shifted its development resources to ensure that the 3DS would succeed. This explains the Wii's poor lineup from 2011 on and was also a factor in Wii U's disappointing first year on the market. After shoring up the stability of the 3DS, Nintendo more fully began its attempts to transition to HD development and prop up the Wii U.

The worst platform to launch a game on
Nintendo's big 2014 games show that it is a console oriented year for the company. It just so happens that the Wii U is the worst place to launch software in the modern console gaming industry. Platform momentum is near non-existent, with the company recently having revised its fiscal year sales target from 9 million units to a 2.8 million unit goal it might still miss.

How is Sony doing?
While the 3DS is suffering from sales drop off in Japan, Sony's (NYSE:SNE) PS Vita has quietly been building momentum in the territory. That's not to say that the device isn't a massive disappointment for Sony or that claims of PlayStation 4's release boosting Western Vita sales are anything more than marketing trickery, but Vita is on an upward trajectory in Japan. According to sales tracking from Media Create, Vita's 2014 sales are up approximately 130% over the corresponding period in 2013. Sales of 3DS are down approximately 50%.

Screen Shot


Despite a mostly sold out launch, Sony's PlayStation 4 may not wind up being a success in Japan. It will, however, take away what little chance the Wii U has of building momentum in the territory. Things are looking much better for Sony's console in other parts of the world, while Nintendo's Wii U is as good as dead in most territories.

Nintendo's worst year ever?
Based on the currently available information, 2014 looks to be a great year to bet against Nintendo. The company could shock the world with a groundbreaking innovation or a successful endeavor on mobile platforms, but it's in for a rough year on the hardware and software fronts. If you're looking to make an investment in a gaming company, you would be wise to avoid Nintendo for the time being. 

So if Nintendo is a bad play, which gaming company should you be looking at?
Things might be looking rough for Nintendo, but there's still money to be made in the gaming industry. Looking for a pick with explosive growth potential? David Gardner has proved the doubters wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Keith Noonan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers