Last week, in a piece entitled "Nintendo Probably Can't Save the Wii U," Time noted the precarious situation of Nintendo's (NASDAQOTH: NTDOY ) latest living room video game console, concluding that the platform appeared destined for failure.
This has been overwhelmingly obvious to anyone who has been following the industry, even in passing, and it's something I've been pointing out for months. Barring a miracle, the Wii U is set to become Nintendo's worst-selling living room video game console of all time, and its second worst-selling video game system in its history, surpassed in incompetence only by the quirky Virtual Boy.
Based on Nintendo's guidance, the company doesn't expect Wii U sales to turn around and, in fact, it looks to have already given up on the platform.
Rumors hint at new hardware
Last week, VideoGamer reported that Nintendo was planning to unveil a new console later this month at the Electronic Entertainment Expo. Nintendo officials subsequently denied the rumor, but not before it was picked up by a number of reputable gaming publications, including Gamespot.
In all likelihood, the rumor had no merit. Yet, if it had turned out to be true, it wouldn't be completely surprising.
Trends suggest disappointing lifetime sales
Nintendo said on Wednesday that it had sold just 6.17 million Wii U units since the console went on sale in November 2012. To put that in perspective, Sony sold more than 7 million PlayStation 4s in just the last six months despite carrying a higher price tag and offering fewer critically acclaimed games.
Nintendo only expects to sell 3.6 million Wii Us over the course of the next fiscal year. That seems reasonable, but given the company's penchant to overpromise (it had to reduce guidance for Wii U sales dramatically back in January), it's possible that it won't hit its target.
Even if it does sell 3.6 million additional Wii Us, Nintendo will have sold fewer than 10 million consoles over the system's first two-and-a-half years. A resurgence in the third and fourth year is possible but extremely unlikely.
Nintendo's last console, the Wii, sold more than 100 million units worldwide, but about half those sales occurred during its first two years. If Nintendo sells 10 million Wii Us by the end of fiscal year 2014 and then doubles those sales in the following years, it will have sold only 20 million units -- fewer than its previously most disappointing console, the Gamecube.
Of course, it's likely that sales will be even worse given that there's some degree of network effects in play. The fewer Wii Us in the hands of consumers, the less likely video game creators are to release games for the system, in turn encouraging fewer consumers to purchase one.
Nintendo could be getting ready to move on
There's another element to Nintendo's weak Wii U sale's forecast: It suggests that the company is gearing up to move on. Perhaps Nintendo is just being realistic, but if its management is offering conservative guidance, it may be because it's given up.
Mario Kart 8 will debut later this month, followed by Super Smash Bros. in the fall. An entry into Nintendo's famous Zelda franchise appears to be a given, but after that, will Nintendo still support the system? A price cut could help, but Nintendo ruled out that possibility back in January at its shareholder meeting.
Unlikely that Nintendo can save the Wii U? Yes. But worse than that, it doesn't look like it will even try.
The Wii U offers more than video games
In addition to playing Mario, Wii U owners can use the device to stream online video. As more content moves online, it appears cable is going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.