One week ago, the world couldn't wait to see what Nintendo had
in store for the game industry. Today, the world wishes it had
never found out. While a select number of consumers (read: a very
small number of consumers) will tell you that the "games r great,
u stupid Call of Duty lover!" and that the "quality software will
come when Nintendo is ready!" the reality is that Nintendo (
really screwed up
last week. Investors immediately responded by
bailing on the stock
. And in the days since, investors have continued to flee.
June 5: Nintendo closed at $14.87.
June 6: $14.52
June 7: $13.98
June 8: $13.75
June 11: $13.44
June 12: Currently trading at $13.62 (up 1.34% -- the first
increase in a week).
We haven't seen a steady decline like that since Facebook's
) IPO. But that's what you get when you fail to impress
consumers, developers, and investors. That's what you get when
do everything in your power to destroy the
console gaming business
. If consoles decline during the next generation, Nintendo will
be primarily to blame. After all, it was Nintendo who helped
expand gaming last time around with the original Wii. The Mario
maker convinced senior citizens to game, among others who don't
normally do so. Wii U won't do that. Nintendo will be lucky if it
can sell Wii U to hardcore gamers.
Bear in mind that lifetime sales of GameCube -- a system that,
like Wii U, did not launch with any killer apps -- were stunted
. Nintendo Wii -- which launched with a new Zelda and had a
steady stream of triple-A software in the 12 months after release
-- sold nearly five times as many units.
Contrary to what a select few (again, read: a
number of consumers) will tell you, quality games equal big
sales. Lackluster (lame, boring, predicable, and/or
sleep-inducing) games do not.
And what if the triple-A games do come later? It could be too
late. GameCube had one of the greatest games ever made (Resident
Evil 4), but people still wouldn't cough up the money to buy a
GameCube because it arrived four years after the console was
released. As a result, sales were so low that the game's
developer and publisher, Capcom, was forced to port it over to
Guess what happened next? The PlayStation 2 version went on to
3.62 million copies
-- more than double the 1.69 million copies sold on GameCube.
Even the Wii version (which arrived two years later) sold more
units than the GameCube edition.
How did this happen? Because GameCube sales were less than a
fourth of the Wii, and less than a seventh of PlayStation 2.
Thus, there are more consumers available to purchase Resident
Evil 4 on those other platforms.
This does not paint a very good picture for the third-party
strategy Nintendo is taking with Wii U. Consumers won't buy Wii U
for third-party junk; they'll buy it for triple-A first-party
games. But at launch, there won't be any except for Pikmin 3 (a
game that only a handful of people care about, myself included)
and NEW Super Mario Bros. U, the third side-scrolling Mario game
released in the past six years. Will the new Mario be fun? Yes.
Will it sell as many systems as Mario 64 and Mario Galaxy? No. It
won't produce long lines, it won't lead to massive pre-orders,
and it won't inspire anyone to camp outside GameStop (NYSE:
) and Best Buy (NYSE:
) a week in advance.
Investors are smart enough to realize this, which is why they
have chosen to abandon Nintendo.
Can the company make a comeback? Sure -- in five years. It
will take a whole other console (and possibly a whole other
handheld) for Nintendo to return to the glory days of Wii- and
Nintendo DS-sized success.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.