Nintendo's Wii U video game system.
While Microsoft and Sony celebrate early sales victories for their Xbox One and PlayStation 4 video game consoles, the forecast for Nintendo and its Wii U looks grim.
Last Thursday, Nintendo said sales of its Wii U console surged 340% in the U.S. last month, following a price drop to $299 instituted in September and the long-awaited arrival of fresh games, notably the critical darling Super Mario 3D World.
That more than three-fold increase sounds great. However, the Wii U has "really struggled," says David Cole of DFC Intelligence. He says that by the end of November both the just launched PS4 and Xbox One had surpassed the Wii U's total sales in 2013.
The Wii U is looking more like Nintendo's GameCube launched in 2001, "with a very small user base," says Cole. "It will appeal mainly to fans of Nintendo's first party brands."
The rocky start for Wii U - available since November of last year - is a far cry from the success of its predecessor, the Nintendo Wii. Global sales for the Wii U reached 3.91 million as of September, compared with 13 million for the Wii during the same time frame after its 2006 debut.
Although Nintendo did not disclose how many Wii U consoles have been sold this holiday season, Nintendo of America President Reggie Fils-Aime says holiday sales have been "very strong."
"A number of key games we hoped to launch very early in the system's life were delayed and launched later," says Fils-Aime. "We're seeing the positive impact now."
Among the games recently released: Super Mario 3D World, which sold 215,000 physical and digital copies in the U.S. in its first eight days, and the remake of role-playing adventure The Legend of Zelda: Wind Waker. New titles from key franchises such as Mario Kart and fighting game Super Smash Bros. arrive next year.
Despite the infusion of new games, DFC forecasts sales of the Wii U will approach only a quarter of the Wii's tally, which topped 100 million as of September. Meanwhile, rival consoles PS4 and Xbox One continue to gain momentum, each topping 2 million in sales.
Even with the PS4 and Xbox One still in short supply, the Wii U's technical shortcomings - and lack of an eye-popping feature like the Wii's motion controls - may limit its viability as an alternative to either Sony or Microsoft's consoles.
"Nintendo is not really well-positioned as a fallback (option)," says Wedbush Securities analyst Michael Pachter. "A PlayStation is not considerably more expensive and it feels like you're getting a lot more."
The holiday often brings a spike in all video game sales, and Wii U could benefit. EEDAR analyst Jesse Divnich says the console carries several advantages, including a lower price and "more games that target that family friendly audience."
However, the future prospects for Wii U appear challenging. "They are definitely in a difficult spot right now," says Divnich.
- by Brett Molina, USA TODAY