Price Drop Won't Help Ailing Wii U, Claims Analyst
Nintendo's Wii U is in dire straits, but surely cutting the price could right that ship, no? Not according to gaming industry analyst Michael Pachter.
The NPD's latest sales figures emerge this Thursday and Wedbush Morgan analyst Michael Pachter has rather grim predictions for Nintendo. Pachter believes that the Wii U will have sold a mere 55,000 units during its fifth month in existence, marking a 17-percent decline over the previous month. What's worse, Pachter believes this trend will continue, even if Nintendo opts to drop the price of the console.
"The only key hardware device to underperform our expectations was the Wii U and its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console," Pachter states. "We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."
Pachter believes that this sales decline may only be a harbinger of worse things to come for Nintendo. If the PlayStation 4 and next Xbox are price competitively, Pachter says, the Wii U's declining sales may drop even further.
The key reason for Pachter siding with Sony and Microsoft lies not so much in games, but in all the other things next-generation consoles are supposed to bring to the table. Pachter cites multimedia functionality and video playback as two key elements that could propel the PS4/Xbox 361 over the Wii U. Plus, Pachter believes that the new Sony and Microsoft consoles may be even cheaper than their predecessors. "If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model)," Pachter states. "If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history."
Of course, as with anything Michael Pachter ever says, this should be taken with a grain of salt. Pachter's claims are not based on inside knowledge, but are instead prognostications based on prior sales data and, likely to some extent, gut feelings. That said, Pachter has a history of being right about this sort of thing - hence why Wedbush Morgan pays him the big bucks to predict the future of the gaming industry.
Point being: Take this doom and gloom as gospel truth if you'd like, but it's entirely possible that Wii U sales may surprise everyone when the NPD Group's figures are revealed later this week. It's not at all likely (and we expect Pachter to be more or less on the money), but it is possible.
Source: GamesIndustry [http://www.gamesindustry.biz/articles/2013-04-15-pachter-price-drop-wont-help-wii-u]
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Nintendo's Wii U is in dire straits, but surely cutting the price could right that ship, no? Not according to gaming industry analyst Michael Pachter.
The NPD's latest sales figures emerge this Thursday and Wedbush Morgan analyst Michael Pachter has rather grim predictions for Nintendo. Pachter believes that the Wii U will have sold a mere 55,000 units during its fifth month in existence, marking a 17-percent decline over the previous month. What's worse, Pachter believes this trend will continue, even if Nintendo opts to drop the price of the console.
"The only key hardware device to underperform our expectations was the Wii U and its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console," Pachter states. "We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that the long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."
Pachter believes that this sales decline may only be a harbinger of worse things to come for Nintendo. If the PlayStation 4 and next Xbox are price competitively, Pachter says, the Wii U's declining sales may drop even further.
The key reason for Pachter siding with Sony and Microsoft lies not so much in games, but in all the other things next-generation consoles are supposed to bring to the table. Pachter cites multimedia functionality and video playback as two key elements that could propel the PS4/Xbox 361 over the Wii U. Plus, Pachter believes that the new Sony and Microsoft consoles may be even cheaper than their predecessors. "If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model)," Pachter states. "If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history."
Of course, as with anything Michael Pachter ever says, this should be taken with a grain of salt. Pachter's claims are not based on inside knowledge, but are instead prognostications based on prior sales data and, likely to some extent, gut feelings. That said, Pachter has a history of being right about this sort of thing - hence why Wedbush Morgan pays him the big bucks to predict the future of the gaming industry.
Point being: Take this doom and gloom as gospel truth if you'd like, but it's entirely possible that Wii U sales may surprise everyone when the NPD Group's figures are revealed later this week. It's not at all likely (and we expect Pachter to be more or less on the money), but it is possible.
Source: GamesIndustry [http://www.gamesindustry.biz/articles/2013-04-15-pachter-price-drop-wont-help-wii-u]
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