E3 2014: The 3 Critical Questions for Nintendo

Let’s take a look at 3 questions Nintendo needs to answer following its deluge of E3 2014 announcements.

Jun 11, 2014 at 9:41AM

Nintendo (NASDAQOTH:NTDOY) just unveiled a slate of exclusive games for the Wii U at E3 2014. The company discussed new first-party flagship titles including Super Smash Bros. for Wii U, Yoshi's Woolly World, Captain Toad: Treasure Tracker, Kirby and the Rainbow Curse, Mario Maker, and a new open-world Legend of Zelda title.

Shigeru Miyamoto, the creator of many of those flagship series, also demonstrated new uses for the Wii U GamePad in three unique projects. Last but not least, Nintendo unveiled its Amiibo interactive toys, which are similar to Activision Blizzard's (NASDAQ:ATVI) Skylanders and Disney's (NYSE:DIS) Infinity action figures.

These announcements certainly indicate that Nintendo has some ambitious plans for the coming year, but will they be enough to get the company, which has now reported three years of consecutive operating losses, back on track? Let's take a look at the three critical questions that Nintendo needs to answer by 2015.

Will new exclusive titles lead to higher hardware sales?
Strong sales of Mario Kart 8 show that gamers still love Nintendo's core franchises. The go-kart racer, currently the second best-selling video game in the world, has already sold 1.12 million copies in its first week on the market. It's unclear how many of those copies were bundled with the Wii U, but it could definitely help the console, which has sold 6.3 million units worldwide, catch up to Sony's (NYSE:SNE) sales of 8.1 million PS4s.

Super Smash Bros. for Wii U, which is scheduled to arrive this winter, will be the next major Wii U title to watch. The three previous games in the casual fighting series have sold a total of 25 million units.

Yoshi's Woolly World, which stars a Yoshi made of yarn, is an innovative new title that resembles a mashup of Super Mario World 2: Yoshi's Island and LittleBigPlanet woven together with yarn. The game could be a surprise hit, since gamers haven't seen a solo Yoshi title on home consoles since Yoshi's Story for the N64 in 1997. The same can be said about Kirby and the Rainbow Curse, which will be Kirby's first new home console title since Kirby's Epic Yarn for the Wii in 2010. Both games are scheduled to launch in 2015.

Two other potential hits -- Miyamoto's Star Fox and the next Legend of Zelda -- are also scheduled to arrive in 2015. To tide gamers over until then, Wii U owners will get Hyrule Warriors, a crossover title between Tecmo Koei's Dynasty Warriors and The Legend of Zelda, in August, and Bayonetta 2 (which includes the original Bayonetta) in October.

If Nintendo continues bundling these big titles with Wii U hardware, we could see a surprising jump in Wii U console sales in the second half of the year.

Will Miyamoto's new strategy for the Wii U controller pay off?
At E3, Miyamoto directly addressed one of the most common criticisms of the Wii U -- the GamePad -- with three unique projects: Project Robot, Project Guard, and Star Fox.

Project Robot demonstrates the GamePad's thumbsticks and motion controls being used to control a gigantic robot stomping through a city. The second screen displays a first-person view, while the TV displays a third-person one. This highlights an interesting idea -- should third-person games, like Ubisoft's Assassin's Creed and Watch Dogs, also be modified to include a first-person view on the second screen? Meanwhile, Project Guard offers a unique twist on the traditional tower defense game. The player switches quickly between cameras to shoot down a variety of robot intruders before they breach the base.

Image

Star Fox. Source: Nintendo.

Most importantly, Miyamoto demonstrated an early version of Star Fox, which uses the GamePad's motion controls to fire the Arwing's weapons and the thumbsticks to maneuver the ship. The game also features a two-player co-op mode, in which one player pilots a helicopter and the other controls a tethered robot that attacks enemies and grabs power-ups.

These three projects definitely demonstrate the untapped potential of the Wii U controller, but the critical question now is whether developers will follow Miyamoto's ambitious examples.

Will Amiibo be the new Skylanders?
In a previous article, I suggested that Nintendo should follow in Disney's footsteps and sell more toys to generate more revenue. With its new Amiibo interactive figurines, it seems to have found a comfortable balance between selling toys and sticking with video games.

Group

Source: Nintendo.

Amiibo figures work in the same way as Activision's Skylanders and Disney's Infinity figurines -- players press a real-life action figure against the Wii U GamePad to conjure up a digital counterpart within the game. The data for unlocking the character is stored in the action figure itself, which allows players to collect and trade the toys for their own personal Nintendo army.

Nintendo has stated that Mario Kart 8, Super Smash Bros. for Wii U, and Mario Party 10 will include Amiibo support, and that it will also release an Amiibo-connecting peripheral for the 3DS next year.

Yet Amiibo could actually become more popular than Skylanders, which grew into a $2 billion franchise in just over two years. The reason is simple -- Skylanders characters are based on the lesser-known Spyro the Dragon series, while Amiibo prominently features universally recognized Nintendo characters like Mario, Link, and Samus.

The Foolish takeaway
In conclusion, Nintendo offered up a lot of exciting projects that show the company is still firmly dedicated to the Wii U. Mario Kart 8 and Super Smash Bros. could bring in new gamers, which could be converted into a dedicated customer base for its collectible Amiibo figures. Meanwhile, Miyamoto's admirable dedication to the GamePad shows that there's still a lot of untapped potential in the Wii U's oft-maligned second screen.

If that plan holds together, strong exclusive titles like Star Fox and The Legend of Zelda in 2015 could finally turn the Wii U from an industry laggard into a late bloomer.

This stock could power up your portfolio
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Leo Sun owns shares of Walt Disney. The Motley Fool recommends Activision Blizzard and Walt Disney. The Motley Fool owns shares of Activision Blizzard and Walt Disney. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

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.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

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. The show is also heard weekly on dozens of 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. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers