It's no secret that sales of Nintendo's (NASDAQOTH:NTDOY) Wii U aren't anywhere close to what the company had hoped for. Despite being released a full year before Sony's (NYSE:SNE) PS4 and Microsoft's (NASDAQ:MSFT) Xbox One, sales of the PS4 have already eclipsed the Wii U, and the Xbox is close behind. So what's Nintendo to do? More to the point, is there anything it can do? If there is, Nintendo will certainly make its move at this year's E3.
So what's Nintendo to do?
Instead of holding a press conference like its competitors, Nintendo had a digital event on Tuesday to announce its newest products. The lineup was an interesting mix of hopeful contenders and more of the same boring Nintendo fare. Falling squarely in the hopeful category are the Amiibos, Nintendo's answer to Activision Blizzard's Skylanders and Disney's Infinity. Amiibos are figurines of Nintendo characters that contain an NFC chip; when the chip is touched to the Wii U's gamepad, the figurine will come to life on screen in the player's game. Thus players don't have to buy a new device to play the game -- they just need a Wii U. And with Nintendo's incredibly deep roster of well-known characters, it's not much of a stretch to say that this will be a popular product with the kids.
Other promising announcements included Mario Maker, a game that lets players create Mario levels for themselves that has the potential to expand to other games as well. In addition, there was the unveiling of a new Legend of Zelda game that looked appropriately next-gen, and it has certainly gotten gamers at E3 talking. Plus there's the new Super Smash Bros. coming to Wii U and 3DS this holiday season, along with the successful launch of Mario Kart 8 earlier this month. One might think that things are turning around for Nintendo, but it's not time to save and quit just yet.
Along with these great announcements were a slew of the same old from Nintendo: Yoshi, Kirby, and Captain Toad games fill out the rest of the games roster. While these characters may have been popular once, their stars are fading, and none of the games looked intriguing enough to make gamers charge out and buy a Wii. All of these games will be available this holiday season, but don't expect these to be the ones that boost Nintendo's bottom line.
What about the competition?
Sony and Microsoft largely ignored Nintendo and went toe to toe with their press conferences on Monday. Sony seemed at ease with its sales lead and began moving away from a gaming-centric way of thinking toward branching out the services its PS4 offers. This includes a game streaming service called PlayStation Now, a streaming device simply called PlayStation TV, and more abstract gaming concepts like its Project Morpheus VR system.
Meanwhile, Microsoft refocused on gamers with its presentation, hitting the audience hard and fast with games aplenty. While most of these games weren't exclusives for its system, they were still enough to get back on gamers' good side (and the $100 price drop for the Xbox One probably didn't hurt, either). Still, with games like Halo 5 on its roster, you can never count Microsoft out. I wouldn't be surprised if it gained some ground on Sony in the next few months thanks to the price drop, and perhaps even outpaces the Wii U.
So is Nintendo safe or what?
This was a mixed bag for Nintendo. On one hand, there is some promise -- the Amiibo concept makes all sorts of sense for Nintendo, which is chock-full of super popular characters such as Mario, Link, Pikachu, and more. These should translate well into figurines, and kids will recognize them when they hit store shelves. On the other hand, it seemed like more of the same from Nintendo, with a bunch of games that people say they like but frankly probably won't buy. While Mario Kart 8 seems to be giving the Wii U some life support, this wasn't a blowout E3 for Nintendo. Once the hoopla over Mario Kart dies down, it's likely that sales of the system will feel the pull of gravity and come plummeting back to Earth.
Nintendo's big chance to reverse that trend this year will come with the release of its Amiibo figurines this holiday season. Right now the only figurines it will release are part of the Super Smash Bros. games, which could be a nice tie-in to boost sales. If Nintendo can ride the wave from Mario Kart into the holidays, it may have a relatively merry Christmas. If not, expect more of the same poor results from the Nintendo and the Wii U.
Mark Reeth has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Netflix. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), Microsoft, and Netflix. 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.