The headlines aren't wrong: Nintendo's had a very bad run of it lately. Wii U sales are down year-on-year, and its last year figures were already way down from its original projections. The fiscal 2013 figures Nintendo just released are kicking a company that was already on the curb, in other words. Even the 3DS, which enjoyed something of a sales renaissance after Nintendo slashed its price in August 2011, was off significantly in year-on-year sales. That's culminated in the company taking a net loss for its fiscal year of $228 million—an improvement over last year's negative $358 million pummeling, but a shiner just the same.
By comparison, Sony's PlayStation 4 has been selling at rates unheard of in console-dom, and you can boil that down to three reasons: specs, price and the PlayStation 2. No one disputes that the machine Mark Cerny helped architect is blisteringly powerful under its deceptively slender hood. And no one disputes that $400 is a steal for what's in the box. Indeed, price comparisons involving homebrew PS4-like systems suggest Sony's offering gamers considerably more for their money. And let's talk about the PlayStation 2, because with that console Sony proved lighting could strike twice (and with twice the voltage). Sony's base may have balked at the company's initial price tag, its architectural missteps and its apparent apathy to Microsoft hoovering up all the major content deals during the PlayStation 3's tenure, but I'm not sure it ever abandoned the company.
Nintendo's Wii U, in contrast, lacks compelling specs, a sweetheart price or a historical PlayStation 2-equivalent to build on. It's in the same ballpark as the PlayStation 3 and Xbox 360, oomph-wise, but that's not what gamers who've lived with Sony and Microsoft's systems for the past six or seven years were looking for in November 2012, nor what seems to be moving them now. The Wii U's price hasn't helped matters: $350 at launch, for the only version you'd care to own, the sticker probably forced up by Nintendo's pricey pseudo-tablet pack-in. The message Nintendo seemed to be sending was this: spend more than you would for an Xbox 360 or PlayStation 3—each of those systems sporting massive libraries flush with acclaimed titles—on a backwards-looking system without a game-changing system-seller. The Wii U has yet to find its Super Mario 64 or Wii Sports.
Worse still, the company's failed to ramp up software production or woo third-party developers, leaving the Wii U's cupboards bare, or filled with I.O.U.'s for repeatedly delayed first-party games. Is it any wonder the sort of enthusiasts presently driving this Sony-Microsoft console sales renaissance aren't biting?
While the original Wii outsold the Xbox 360 and PS3, it appealed most to that ficklest of fickle demographics: casual gamers. $250 was sufficiently low to fuel novelty sales at first, but once the bloom was off that rose, sales plummeted, and anecdotes about unplayed Wiis have become a games industry aphorism. The Wii U, by contrast, has little of the Wii's novelty, and the Wii U GamePad feels increasingly like a creative miss—something that would have worked better as an optional peripheral, leaving Nintendo price headroom to amp up the specs and instead take a swing at the demographic Sony and Microsoft have been so successfully re-wooing.
But Nintendo thinks in holistic terms, and that's arguably what people, casual or core, love most about the company's products. Even the Nintendo 64, Nintendo's most powerful console relative to its competition at the time, was as much about its funky three-pronged controller and middle thumbstick as its silicon graphics-hyped processor. It's that stubborn reluctance to play it safe that's occasionally led the company to headline games industry breakthroughs.
The flip side is that those relentless attempts to innovate—including ones that might involve rejiggering the very notion of "platform"—can break a company, however much they have in the bank. It's survivable if you're the Virtual Boy and your followup's the Nintendo 64, but the Wii U's probably going to be with us for a while, and while Nintendo's tried repeatedly to make its case by claiming its next breakthrough game's finally here (or just around the corner), it's not at all clear the likes of upcoming games like Mario Kart 8 or Bayonetta 2 or Super Smash Bros. are going to be enough to arrest the Wii U's tailspin—or the arrival of Tomodachi Life, however novel, the 3DS' backwards sales motion.
I won't waste your time armchair-CEO'ing Nintendo by suggesting what I think the company should do. Most of what you'll hear about Nintendo taking its intellectual property mobile, or getting out of the hardware business entirely (like Sega) is just wishful thinking. Price cuts never hurt, unless they so sabotage the company's profit margins that any sales boom becomes Pyrrhic. Selling a version of the system without the Wii U GamePad has the ring of wisdom to it, but wouldn't be without its challenges, namely the reduction of the system's already meager library by the number of titles that depend on (or simply benefit from) the controller.
Nintendo's problem is that it's in that deadliest of platform catch-22s, where you need a slew of standout, signature games to make your case, leveraged by third-party support for all of the triple-A multi-platform titles. The company has too few of the former and a shrinking dearth of the latter at this point. Third parties have either abandoned the system or failed to sign up for duty in the first place, their worries doubtless confirmed for the second cycle running with these latest fiscal results.
And that's why people aren't buying the Wii U. Enthusiasts view it as anemic, casual gamers see it as overpriced and there simply aren't enough diehards loyal to the beloved Nintendo brand to make up those deficiencies. The proof is in those figures.