In Japan, PlayStation 4 looks to have a bleak future ahead of it. The most recent weekly sales tracking from Media Create shows Sony's (NYSE:SNE) latest console being outsold by Nintendo's (NASDAQOTH:NTDOY) Wii U, a system that has also been a big underperformer. Making the picture even worse for Sony, this week's sales data suggests that PS4 selling worse than Wii U will become a common occurrence. Can anything save the PlayStation 4 in Japan? Is the collapse of the Japanese console gaming a sign that the broader gaming industry is in trouble?
Not the hero PlayStation 4 needed
Of all the sales data to come out of Japan after the PlayStation 4's launch, this week's numbers have to be the most disappointing for Sony. The troubled company's newest system saw the release of Infamous: Second Son, a title squarely aimed at Western tastes. It was also one that stands as one of the most high-profile games slated to hit the console this year. The game was the second best-selling piece of software for the week ending May 25, with approximately 35,000 units moved. This put it just behind World Soccer Winning Eleven 2014.
Even with the release of a major game that moved decent numbers, however, Media Create lists PS4 as selling just 7,543 units. Nintendo's Wii U sold 9,024 units for the week. Even the PlayStation 3 once again outsold the PlayStation 4—this time by approximately twenty units.
This week's numbers highlight the disappointing state of the PlayStation 4's software lineup in Japan. The release of Infamous: Second Son looks to have driven sales of the console up approximately 750 units over the previous week, a mostly negligible bump. The game sold to just about 6% of the PS4's approximately 580,000 unit Japanese user base.
Wii U gets a little boost
While PlayStation 4 looks to suffer from a lineup that will guarantee anemic Japanese sales for the rest of the year, Nintendo's Wii U will receive some of its biggest hitters. Sales of the console are already climbing in anticipation of the release of Mario Kart 8. The title won't propel the system to broader success, but it should have a visible sales impact. The August release of Hyrule Warriors should help the console preserve a sales bump and continue to outperform the PS4 in Japan.
At this point in their respective lifecycles, sales of PlayStation 4 are lagging behind sales of the PlayStation 3. After its fourteenth week on the market, PS4 has sold approximately 577,000 units, while the PS3 had sold 658,000. The discrepancy is particularly notable because Sony's last console launched at an astronomically high price, while the more recent system is broadly perceived to have a more reasonable price. Also notable is the fact that PlayStation 3 looked to have stronger support from Japanese developers—not surprising given the trends that are shaping interactive entertainment in the country.
The state of console gaming in Japan is partially Sony's fault
Sony's handling of its Japanese studios deserves a fair bit of criticism. As developers have migrated to handheld and mobile platforms, the importance of first party content on consoles has skyrocketed. Unfortunately, Sony's Japanese software output since the release of PlayStation 3 is hardly deserving of commendation. Now, PS4's future looks dependent on far-off third party titles like Deep Down and a new Resident Evil from Capcom, Metal Gear Solid 5: The Phantom Pain from Konami, and Kingdom Hearts 3 and Final Fantasy XV from Square Enix. Even with strong performances from these games, it now looks unlikely that PlayStation 4 will outsell its predecessor in Japan.
How do you build hardware for disparate markets?
Rumblings out of Nintendo that its next handheld and home console gaming hardware will feature similar hardware make a great deal of sense. Dedicated handhelds are rapidly losing support in Western markets, while console gaming looks to be headed for irrelevance in Japan. Building largely similar versions of the same games for release across different platforms could give Nintendo a better chance of meeting the demands of the new gaming landscape. The early success of the PS4 in Western territories and the broad failure of its PS Vita handheld make it less likely that Sony will pursue the same strategy, but the company is already laying the groundwork for a future in gaming that's not dependent on a hardware presence.
A dangerous game of predictions
Whether or not PlayStation 4 manages to scrape above the Wii U in sales is mostly irrelevant. The situation in Japan is the result of troubling variables that each platform holder must contend with. Sony and Nintendo must assess the dire situation and react as best they can while planning their next gaming platforms. The collapse of the Japanese console industry makes future hardware releases more difficult to justify, particularly as more and more devices integrate gaming functionality.
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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.