Did Super Mario Save the Wii U?

The latest Mario Kart title has led to a spike in sales for the videogame system.

Jul 2, 2014 at 8:10AM

Since the Nintendo (NASDAQOTH:NTDOY) Entertainment System was released in the United States in 1985, the company's breakout star was clearly Mario -- the one-time plumber who had previously attempted to rescue his girlfriend from the evil (but very patient) gorilla Donkey Kong in the videogame of the same name.

It was the success of Super Mario Bros. that made the NES the first console to become massively successful since the grandfather of the modern videogame console -- the Atari 2600 -- first graced America's living rooms. After that early success Mario has been Nintendo's lead character headlining countless games with his brother Luigi in the Super Mario Bros. franchise as well as heading up successful spin-offs including Super Smash Bros. and Mario Kart.

It's the latest edition of that series that may help the struggling console company revive interest in what many have thought is a dead platform -- the Wii U.

The Wii U story before Mario Kart 8

Wii U has been on the market for about a year longer than the market-leading Sony  (NYSE:SNE)  PlayStation 4 and the Microsoft  (NASDAQ:MSFT) Xbox One. Despite the 12-month head start, it has only sold around 6.5 million units -- about a million more than Xbox One and a million less than PS4, according to the most recently announced sales totals. While the overall number is comparable to its rivals, buzz around Wii U had faded badly and the product has largely been considered a failure. Few thought it had a chance of making a major comeback.

While the console has had a few million-plus selling titles, none have brought a major bump in console sales. That suggested that the people who bought Wii U were Nintendo diehards likely to buy all the major releases. Attracting the casual fans who purchased 100 million plus of the original Wii consoles is key to the Wii U's prospects, but until Mario Kart 8 there was no reason to believe that audience could be reached.

The Wii U story after Mario Kart 8

At its shareholders meeting earlier this month, Nintendo announced that Mario Kart 8 has sold 2 million copies worldwide in the month since its May 30 release, IGN reported.  

More importantly the title has led to a spike in console sales. Nintendo was selling an average of about 29,000 Wii U consoles per week prior to Mario Kart 8′s release, according to VGChartz. In the week after the racing title went on sale over 130,000 Wii U consoles were sold. Three weeks after the game's release the console was still selling about 60,000 a week.

Mario Kart 8 has sold around 200,000 Wii U consoles in three weeks. That's not enough to declare the console revived but it's a positive sign. 

It also suggests that we are still early enough in the next generation console battle that Nintendo can turn things around based on its wholly owned titles. Nintendo has announced a new Legends of Zelda as well as a Super Smash Bros. title for release in coming months. If these provide the same sales lift, the company may succeed in bringing its platform back from the dead.

It has not worked this way for Sony and Microsoft

Both Sony and Microsoft have invested heavily in exclusive titles. In past iterations of the console wars, exclusivity has been an important factor in helping people decide which system to buy. That has not been true so far in the Microsoft/Sony fight -- recent heavily promoted exclusive releases for PS4 and Xbox One have been less effective in creating a console sales spike than Mario Kart 8.

In March Titanfall was released as an exclusive for Xbox One and inFAMOUS: Second Son was the same for PS4. The Titanfall sales bump lasted two weeks moving about 94,000 additional Xbox One consoles (despite very aggressive package pricing that made the game essentially free with the purchase of a console). The sales jump from Second Son lasted three weeks selling an additional 112,000 PlayStation 4 consoles.

Mario and pals did better showing that some exclusives -- perhaps the ones that younger kids beg for -- are worth more than others.

The added oomph Mario gave Wii U might also be a combination of the character's appeal and the fact that Nintendo's console starts below $300 while Microsoft and Sony's start at $399 after the recent price drop on Xbox One.

One title is not a comeback

Nintendo is fighting for what Gartner predicts will be a $49 billion market in 2014 growing to $55 billion in 2015.The success of Mario Kart 8 does not entirely put it back in the game, but it does suggest the company has a shot to make a comeback and grab its share of those billions. Had the game not succeeded it's possible Nintendo could have thrown in the towel on its console and instead followed what one-time console player Sega did -- make games based on its popular characters for other companies' consoles. 

Wii U is still struggling and Nintendo has to release more than one hot game to revive broad interest in the platform. The success of Mario Kart 8, however, suggests that the family audience that bought the original Wii has not abandoned the company. It's possible that because it has so many highly anticipated future releases featuring well-known characters that the Wii U could fight its way back into the discussion. 

If it does it's all thanks to one plumber, turned adventurer, turned unlikely race car driver.

Leaked: Apple's next smart device (warning, it may shock you)

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Daniel Kline is long Microsoft. He does not own a next generation console but will probably buy an Xbox One. The Motley Fool owns shares of Microsoft. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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