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Nintendo Wii U faces key test this holiday season, pit against PS4 and Xbox One

This vacation season Nintendo faces a essential take a look at with its Wii U online game console that’s pitted in opposition to Sony’s PlayStation four and Microsoft’s Xbox One because it seeks to revive flagging gross sales.

Analysts say there may be a possibility for the Kyoto-based totally firm to stage a turnaround as new recreation releases reminiscent of Tremendous Mario 3D World and Wii Match U might carry Wii U gross sales. Must lackluster gross sales persist, the corporate which shot to prominence within the Eighties with Household Laptop consoles and Sport Boy portables could be compelled to rethink the core of its industry technique.

Nintendo’s business, long associated with the hit Super Mario, Donkey Kong and Pokemon games, has been shaken in recent years as more people play games on their smartphone and tablets. So far Nintendo has been steadfast in its refusal to adapt games for those devices.

The company reported an 8 billion yen ($81 million) loss for the three months ended Sept. 30. Quarterly Wii U sales nearly doubled to 300,000 units from 160,000 in the previous three months, but cumulative sales remained far short of the company’s goal of 9 million units for the financial year ending March 2014.

Eiji Sato, analyst at Toyo Securities, said Nintendo needs “killer content” for the Wii U to turn around its business after a weak lineup of game titles added to its woes. That has caught the company in a vicious cycle because developers are reluctant to create games for a poor-selling console.

Most game creators are also pouring resources into mobile games, which are easier and faster to develop compared with those for home game consoles that take more time, energy and expense due to the need for higher quality graphics, said Sato.

Nintendo’s management principle has been to increase the population of gamers in the general public. When its strategy works, Nintendo wins big as it did with the motion-sensing Wii in 2007, Sato said.

The Wii U, the successor to the original Wii, reached cumulative global sales of 3.9 million units at the end of September since its launch over a year ago. In contrast, sales of Sony’s PS4 reached more than 2.1 million after going on sale Nov. 15. More than one million Xbox One machines were purchased on the first day of sales in 13 countries on Nov. 22.

( Also see: Xbox One global sales top 2 million inside 18 days )

The appearance of the PS4 and XBox One leaves Nintendo in a “dangerous position within the console world,” mentioned Steve Boxer, a sport reviewer for The Guardian and an avid gamer.

“If I was once Nintendo, I’d be pondering very arduous about some method of harm dilemma.”

On the most recent Tremendous Mario 3D World sport, Boxer stated it’s a “superb sport with traditional Mario-sort platform recreation motion, but it surely does not really feel adore it’s one thing new and recent.”

However Hirokazu Hamamura, president of gaming journal writer Enterbrain, stated the PS4 and Xbox One consoles are flying off the cabinets as a result of their core enthusiasts waited as much as eight years for these new consoles to return out. And he stated their liberate used to be accompanied with robust sport software.

What has been taking place to the Wii U is similar to the Nintendo’s expertise with the 3DS, mentioned Hamamura.

The well-liked Nintendo handheld device had a steered retail value of $249.ninety nine in the US when it first was to be had in March 2011. After susceptible gross sales, Nintendo slashed the fee to $169.ninety nine in August of that year.

Sturdy software titles akin to Mario Kart and Monster Hunter ensued and “3DS gross sales exploded,” mentioned Hamamura, who factors out that Nintendo now has a pipeline of unreleased video games for the Wii U.

Due to the fact Sept., the Wii U.s.a.beneficial retail value has been lowered to $299.ninety nine for the 32-gigabyte edition within the U.S. It used to be $349.ninety nine when it debuted in November remaining year.

Some other value minimize is a sturdy risk for the Wii U if gross sales keep slow, mentioned Sato, the Toyo Securities analyst. Nintendo has 460 billion yen in money ($four.four billion) and is ready to continue to exist a nasty gross sales year or two, he mentioned.

Nonetheless, some say it is time for Nintendo to alter slightly than take remedy in its giant money pile.

“Nintendo will have to expand its earnings circulate with the intention to develop,” mentioned Tomoaki Kawasaki, senior analyst at IwaiCosmo Securities.

Nintendo has sturdy software, with hit titles like Tremendous Mario and Zelda, so it can be prudent to make that content material mobile whereas conserving Nintendo’s type, he stated.