Nintendo Must Sell 500K Wii U Games to Recoup This Loss
Nintendo (OTC: NTDOY ) lost a patent infringement case this week after a federal jury found that the company infringed on display technology invented by a former Sony (NYSE: SNE ) employee. The technology was initially invented by Seijiro Tomita. According to Reuters , Tomita was awarded $30.2 million in compensatory damages.
Nintendo will have to sell roughly 503,333 Wii U games at $60 each ($60 x 503,333 = $30,199,980) to recoup the loss. Alternatively, the company could sell 755,000 Nintendo 3DS games at $40 each ($40 x 755,000 = $30,200,000).
This has not been a good year for the Mario maker. The company has been struggling to cope with the fact that consumers don't care about Wii U in its current form .
In the months following Wii U's release, consumers have shown no interest in the console whatsoever. At least two prominent game industry executives have expressed disappointment with the hardware sales.
Activision (NASDAQ: ATVI ) CEO Bobby Kotick recently told investors that he was "somewhat disappointed" with Wii U's launch. Today GameStop (NYSE: GME ) President Tony Bartel said that Wii U sales have been slower than his company expected .
If these men were bloggers, their comments would not be worth reiterating. However, one is the leader of the world's largest third-party developer; the other leads world's largest retailer of video games. They have every reason to bolster Wii U's success, which could explain the soft tone in their negative comments. Neither executive wants Nintendo to fail.
The problem is that Nintendo does not seem to know how to succeed. The company initially expected Wii U to sell five million units by the end of March. Nintendo now believes it will sell four million units .
In February Nintendo unveiled an onslaught of new games to reinvigorate consumers and inspire Wii U purchases. Thus far, this strategy has not worked. Instead of providing concrete details (ex: a firm release date), Nintendo merely announced these games -- including a new Mario and a new Mario Kart -- and told consumers to wait for more information.
This strategy might sound like a nice way to tease gamers, but it cannot be very successful when the system is already struggling to find its audience. Right now, Wii U's first-party lineup consists of just two games -- New Super Mario Bros. U and NintendoLand. Pikmin 3, which was promised as a "launch window" game (and is still listed as such on Nintendo.com ), is not expected to ship before the end of June -- eight months after Wii U was released.
Sketchy release dates, broken promises and a plethora of delays proved to be a losing formula for Nintendo 64, one of the least popular consoles developed by Nintendo. According to VGChartz , 32.9 million N64 units were sold. That is far less than the 49 million SNES, 61.9 million NES and 99 million Wii units that were sold.
If Nintendo wants to turn things around, it needs to come to the Electronic Entertainment Expo with a detailed list of several triple-A first-party games -- and firm release dates for when consumers will be able to buy them.
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