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Yet Another Obituary for Nintendo

October 28th, 2011 - 9:41 am

Every three or four years — coincidentally about 12 months out from the next console game upgrade cycle — it’s time to pronounce Nintendo dead. Well, it’s that time of year again, folks. The last six months were big trouble for the Japanese gamemaker:

Japanese gaming giant Nintendo revealed on Thursday that it lost $925 million over the six months ending in September due to a sharp drop off of game and console sales, even as healthy sales of Apple’s iPhone and iPad continue to establish iOS as an alternative gaming platform.

The company had previously warned in July that it would lose money during the first half of its fiscal year, but Thursday’s results were even worse than it had expected. Net sales for the period were 215.7 billion yen ($2.84 billion), down from 363.2 billion yen ($4.78 billion) in 2010. Net income fell to a loss of 70 billion yen ($925.4 million), much worse than the 35 billion yen loss Nintendo had originally forecast.

“Weaker than expected” sales of Nintendo DS and 3DS software and yen appreciation were cited as the main reasons for the variance.

What’s to blame for such bad numbers? Apple’s iOS devices are taking over casual gaming and Nintendo’s Wii and DS units are at end-of-life. Disruptive competition and bored customers is a deadly combination.

Previously, Nintendo had always found a way back — most spectacularly with the Wii. PS2 and XBOX nearly killed Nintendo a few years ago. So the company just didn’t have the resources to mount a high-tech competitor to the XBOX 360 and the PS3. Instead, Nintendo forged a different path: An easy-to-use, low-tech console. Best of all, the Wii was cheap enough to make that Nintendo made money on each one from the very first sale. Microsoft and Sony sell their consoles, at least initially, at a loss. They make it up on game sales and, eventually, lower manufacturing costs.

So what trick does Nintendo have up its sleeve for next year? It’s called Wii U. Rhymes, I think, with p-yew. It’s a console with cheap-looking iPad knockoffs for controllers. It has a touch screen! And lots of buttons! Two circle pads! A thumb pad! And a stylus!

Really? A stylus?

Everything that Wii was — simple, intuitive — Wii U looks to be something else. Do XBOX and PS3 controllers scare you, with their size and all those buttons? Wii U controllers are bigger and more buttony. Which screen do you look at — the one in your hands or the one on the wall? Why the hell do I need a stylus?

I just don’t get it. That controller is such a huge slab of a thing, my first reaction was, “My God, it’s full of stars.”

Now, maybe I’m wrong. I didn’t “get” the Wii when Nintendo first showed it off. Then I saw how anyone could just wave the motion-controller around and start playing games, and it clicked. The Wii U seems to have none of that charm. The U looks like a desperate Hail Mary pass. Maybe it will work, but…

I’m not saying Nintendo is done, but I am browsing forks.

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