Why The Wii U Was Nintendo’s Biggest Mistake

[00:03] excitement this is the key the Nintendo quality seal few companies have revolutionized video games in more ways than Nintendo the practice of literally stamping cartridges with the Nintendo seal of quality introduced to circumvent

[00:18] atari's failures at quality control marked the first step towards Hardware makers profiting from software developed by third-party Studios and it need not be stated how effectively the Wii appealed to multiple Generations from

[00:31] children enjoying their first video game to nursing home residents in need of a convenient and fun tool for bolstering their motor skills for decades Nintendo constituted the entry point for many a gamer and easily vacillated between

[00:45] catering to casual and hardcore audiences but after the Wii prioritize the Casual with motion controls which came at the cost of thirdparty support Nintendo used its successor the Wii U to regain a foothold in the market

[00:58] regain a foothold in the market dominated by PlayStation and Xbox the sticking point for the manufacturer given the inventive second screen application interoperability between it and the 3DS and backwards compatibility

[01:12] with the Wii unlike previous Nintendo devices the Wii successor even supported HD graphics a wide range of factors converged to prevent the Home console from Gaining much traction however Chief among them being the sheer confusion

[01:26] that pervaded pre-launch marketing campaigns misguided by unclear messaging trusted media sources most notably wrote previews describing the Wii U as a peripheral for the Wii the products bizarre naming convention only

[01:39] exacerbated this particular issue not even the acclaimed Mario Kart 8 could boost the systems poor sales as such Wii U sold a dismal 13.5 million units in

[01:51] its lifetime failure Nintendo hadn't faced since the GameCube era and it left many wondering if the house of Mario would ever fully recover this is the tragedy of Wii [Music]

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[04:02] [Music] now next week it will be one year since I became president of Nintendo and in that time a lot of Nintendo and in that time a lot of people have given me their opinions on

[04:17] people have given me their opinions on how Nintendo should change or not change I believe we Remain the company that best understands the video game industry but also understand that in any business

[04:34] but also understand that in any business new circumstances require new answers Nintendo reportedly set aside $34 million for research and development $34 million for research and development in 2003 its R&D budget tripled to 106

[04:48] Million by the time the Wii launched in 2006 then allegedly tripled once more with $370 million being reserved for R&D in 2007 flush with cash and fueled by

[05:00] the meteoric success of its Seventh Generation Hardware a very healthy Nintendo began wondering what should come next roughly a year after the wi Market debut according to Shiro mamoto the figure had behind some of the

[05:12] Publishers most important IPS such talks were Guided by a desire to fulfill needs the original Wii couldn't facilitate mamoto imagined the Wii's potential use as an everyday tool in the household a vision the we fit partially Satisfied by

[05:27] providing an easy solution to daily exercise routines but Nintendo envisioned a future wherein its Hardware became a central part of the living room much like the television President and CEO of the corporation at the time the

[05:40] CEO of the corporation at the time the late sator iwat once noted in an iwat asks segment on Nintendo's website that this pursuit to take over the living room demanded a structural change for the Wii after several rounds of

[05:52] iteration The Firm settled on the Wii U's tablet like configuration the idea screen would provide specifically allowing players to engage in a number of game Centric tasks without turning on the TV this notion

[06:06] more or less scratched the need for a television out of the equation as it finally gave Gamers a sizable screen of their own one capable of delivering far more information than the typical console single screen functionality

[06:19] permitted naturally the size of the tablet styled Gamepad required a lot of thought Nintendo figured a particularly large display wouldn't fit within its budget constraints a small amount of screen real estate didn't seem the best

[06:31] bet either resulting in the Wii U's 6.2in design of course the button layout proved an integral part of the Wii U's makeup 2 Simplicity was the name of the game for the classic Wii remote thus broadening the general design scheme

[06:45] with a touch sensitive display further simplified Nintendo's modern controller layout Above All Else hopes were high the Wii U gamad would help Foster Innovation for example mamoto believed the console could house numerous ways to

[06:59] play games so long as thirdparty developers invented fresh ideas for the novel hardware and the benefit for such creators didn't merely amount to the alleviation of restrictions that plagued the weera IAT and Company bet on the new

[07:12] device challenging developers to resolve yearslong game design dilemmas caused by single screen gaming as far as higher ups were concerned the possibilities were virtually endless early Rumblings about the Wii successor left analysts

[07:25] pundits and Nintendo faithful feeling the same how however the leaks on speculation painted a far grander picture than what reality eventually

[07:45] another gam scoop news break rumors of a wehd have started to surface again coming from consumer website what they play citing multiple industry sources the wehd will address several key concerns with the current console such

[07:58] as the lack of storage sometimes a report from what they play in October 2008 teased an updated version of the Wii that would finally introduce Nintendo branded Hardware to HD visuals in 2011 the publication

[08:11] device would tackle troubles with storage space shagam mamoto spoke on the matter more than a year later telling Popular Mechanics that Nintendo had no concrete plans for its next Home console yet he suggested the Wii success me

[08:26] engineers and designers would likely pursue ways to integrate this interface in whatever platform came next satoro iwat dowed more gasoline on the speculation during an investor relations Q&A session in August 2010 where he

[08:39] reflected on Nintendo's ability to surprise the masses with innovative ideas Insider details began circulating sooner than intended however Game Informer revealed in an early 2011 report that multiple sources were

[08:53] would enter the spotlight during that Year's E3 festivities word from game informers sources tallied with previous claims about HD graphics a technological Nintendo's dealings with third party Studios efforts to repair these

[09:09] relations were already in motion at the time with the company allegedly shopping its device around in hopes of garnering Interest ahead of an internally targeted 2012 launch it was a far cry from the days when Western developers knew

[09:21] nothing of the Wii prior to its official announcement by April 2011 the cat was out of the bag since rumors had swelled of a product code named project Cafe IGN cited informance insisting the console packed significantly more power than the

[09:36] packed significantly more power than the PlayStation 3 and Xbox 360 cvg's wrup mentioned a controller with a built-in touchscreen along with backwards compatible software and Hardware other insiders even accurately detailed the

[09:48] button layout and display size leaving little for Nintendo to surprise the public with at its own pace outside of minor hints during investment meetings remaining silent about the fast spreading leaks seem to be in Nintendo's

[10:01] best interest until the Wii U's formal unveiling at E3 2011 so today welcome to unveiling at E3 2011 so today welcome to the world of we

[10:17] U to begin explaining let's take a little quick peek at Wii U in action hey it's uh time to watch some baseball okay

[10:32] the mount and here comes the 31 pitch oddly enough the game pad served as the heart of the presentation it's 6.2in display motion sensors and standard array of analog sticks and buttons receiving a bulk of the attention

[10:46] Nintendo additionally confirms support for HD resolution in 1080P wi remote and we fit balance board compatibility and the long rumored late 2012 launch window pricing details alluded the public eye during the trade show but Nintendo of

[11:01] America boss Reggie Fame sold consumers on the promise that Wii U would fundamentally change the way they played games and according to iata such a premise for the hardware targeted all types of Gamers especially veteran

[11:15] enthusiasts a preliminary lineup of launch window titles helped accentuate this point the list buttressed by thirdparty ports like Assassin's Creed 3 thirdparty ports like Assassin's Creed 3 Batman Arkham City and Darksiders 2

[11:27] Nintendo even scored an exclusive from PT games Lego City Stories later known as Lego City Undercover but a big AAA Adventure from Nintendo's internal Studios was nowhere to be found on the E3 show floor though audience members

[11:42] attending the event erupted an Applause throughout the presentation online Rumblings and the stock market quickly indicated General responses to the Wii U Were tepid at best within one day of the E3 conference analysts spied a 7.5% drop

[11:56] in Nintendo's share price which marked a 5year low for the Japanese corporation analy yio Suk Coto attributed the Steep drop in value to high expectations that went unmet because so much about the hardware had leaked months in advance

[12:10] nevertheless Nintendo persevered throughout the skepticism and confusion releasing details about the platform peac meal until a blowout of information hit the airwaves during a September 2012 Wii U preview event the platform holder

[12:24] used the New York City based showcase to announce Wii U's November 2012 release dat and two separate configurations priced at $300 the basic model Wii U boasted 8 GB of memory a gam pad console and other

[12:38] necessary accoutrements meanwhile the $350 deluxe package featured 32 GB of memory and everything in the basic set plus a Gamepad charging cradle stands

[12:50] and a copy of the miname filled Nintendo Land the preview event may have answered a great many questions about the product but reporting from evidently confused part parties injured the devices pre-launch marketing mainstream Outlets

[13:03] such as CNN and the Wall Street Journal incorrectly referred to the Wii U as a we accessory when chronicling the E3 2012 and New York events respectively in a gaming segment on The Tonight Show starring Jimmy Fallon The aonomus Host

[13:17] called the GamePad a peripheral that could be added to the Wii the CNN and Wall Street Journal reports were later corrected of course however the effects of First Impressions can often prove impenetrable speaking with Gamespot

[13:30] after the preview showcase director of product marketing Bill trinen admitted Nintendo didn't practice due diligence when explaining the Wii U early on the marketing lead acknowledged that during the E3 2011 reveal in particular the

[13:43] GamePad occupied every one of the product photos while the actual console received little to no attention trenen felt the lack of clarity spread like wildfire from that point onward and thus vowed to resolve the messaging Problem

[13:56] by releasing new promotional materials that prominently centered both the controller and its accompanying Hardware but even in owning these mistakes Tran argued the new device still held an advantage over competing platforms for

[14:09] one thirdparty exclusives like survival horror title Zombie U from Ubisoft bolstered reuse games lineup and multi-platform experiences such as Call of Duty Black Ops 2 had integrated Gamepad features that weren't possible

[14:22] on Playstation or Xbox the most intriguing of which included couch Co-op without the need for split screen functionality from Nintendo's point of view Gamers had a choice to make in the fall of 2012 either play games the way

[14:35] they always had on PS3 and 360 or experience new ways of playing courtesy of the we use gam pad consumers and game creators ultimately decided the new Nintendo console was deficient in what they wanted from the Next

[14:54] Wii U um the share price is down about 15% since then what are what are missing is there any are there any misunderstandings about the Wii U or uh the importance of it to your business I think what happened is that there were

[15:09] two different stories being told if you will at E3 where we unveiled the Wii U I they're very excited they see the potential and for them as they saw the stock price come down they saw it as a buying opportunity the Wii sold hugely

[15:25] expanded your customer base there was a lot of families there's a lot of people who bought their very first game console was the Wii who's buying the Wii U is people whove been playing Zelda all their life or is it new customers you

[15:39] know our expectation is that we will also expand the user base with Wii U and we're going to do that again through the power of the software aren't you worried about the timing and that the Wii U will be a generation behind your Rivals well

[15:53] first off I have to correct you the specs are quite different than our com the competitive systems much more graphically intensive if you do a side by-side comparison you would actually actually see that third-party games like

[16:05] Call of Duty look dramatically better on our system let me tell you like like I I don't know but what made the Wii so successful seems to me that it was the game play and the way the machine worked not Mario or Zelda or whatever but

[16:19] absolutely but we brought it to life with Wii Sports we brought it to life with we fit and we fit plus now there's I think some concern amongst fans that you know Batman is the same game that was really last year well same content

[16:31] at least a different way content it doesn't have quite the same wow factor you swung something like this around and people went oh my goodness yeah think 250 lb is steep for a Wii U well it's still less than it costs Nintendo to

[16:46] make one apparently and what do you think are the prospects for an EA and some of the bigger Studios to actually start making games for it uh right now they're very slim analysts believe Nintendo is facing an uphill battle

[16:58] while it's toal of 3 million Wii U were sold by the end of 2012 sales slowed in January to less than 100,000 at the moment the Wii U just isn't a great console I think this is going to be a

[17:11] much harder sell for Nintendo if I put this in in front of my and say I don't know what this is you got to get this away from me

[17:25] independent publisher in Industry history to join us on history to join us on stage please join me in welcoming the stage please join me in welcoming the CEO of EA Mr John

[17:37] CEO of EA Mr John [Applause] at E3 2011 electronic arts's then CEO John ratell further endorsed Wii U in an interview with industry Gamers the EA

[17:53] executive specifically highlighted the controller praising how using it transcended anything thing he'd ever done in a video game rell's tune changed weeks after the platform hit store shelves evidenced by his comments in a

[18:06] shelves evidenced by his comments in a January 2013 investor call next gen Is Yet To Come he said during the meeting before divulging EA's plan of investing 80 million into software for Sony and Microsoft's eighth gen platforms rell's

[18:20] comment suggested bigname Publishers had already lost faith in the future of the Wii successor sales data implied the public barely had any faith in it at all between April 1st and July 31st 2013 the Wii U sold a mere 160,000 units globally

[18:37] Nintendo reason the low sales were mainly due to the release of few key first-party titles the company enjoyed a stronger software lineup in the back half of the year because of Wind Waker HD and Super Mario 3D World but

[18:50] something had to give thus Nintendo instituted a price reduction initiative in late September less than a year after the console went to Mar Market the Wii U's 32 GB skew dropped in price from $350 to

[19:04] $300 while the 8 GB basic model got phased out of circulation interestingly satoro iant mentioned in a financial results demonstrating the consol's value to Consumers had proven a Grand Challenge

[19:19] long intervals between big game releases didn't help yet he lamented that some had the misunderstanding that Wii U was just a Wii with a pad for games according to the venerable CEO Nintendo felt responsible for not ensuring

[19:32] prospective customers understood the product anecdotal evidence exposed how retailers were similarly misinformed playing the part of a secret shopper IHS electronics and media's Senior Games analyst Christine Arrington

[19:46] ventured into retail stores in 2013 and asked about the Wii U Arrington claimed sales associates told her there was no difference between the Wii and Wii U consoles clearly the misunderstanding ran deeper than the Consumer level and

[20:00] Arrington figured a Wii sports-like experience would have benefited Nintendo tremendously 2006's Wii Sports demonstrated the significance of the wi's nunchuk controllers easily conveying how gaming on the console

[20:12] operated the Wii U had no such piece of software Dan Adelman former head of Nintendo's Indie program agreed with this notion telling polygon in a 2014 interview that the platform holder had failed to justify the game pad's value

[20:26] what's more Adelman attributed the we use poor sales to its abysmal name arguing The Branding alone likely have potential sales the naming convention had thematic purpose though we as a moniker obviously denoted the wi

[20:40] perspective to punctuate the platform's social aspects of play adding you underscored the Boon of an individual running games on their TV or touchcreen but the idea no matter how Forward Thinking simply didn't land a result

[20:55] Thinking simply didn't land a result that cost Nintendo dearly that cost Nintendo dearly [Music]

[21:13] us following the noia the presentation to hear more about Wii U partway through the platform's First full year on the market Nintendo vowed to bullishly educate audiences on the Wii U one example of this manifested in December

[21:27] 2013 when the publisher released an explainer video detailing the console's advanced technology and exclusive games viewers regarded it as a platform's best ad one that should have circulated pre-launch unfortunately the informative

[21:42] overview marked an effort that came far too late Financial earnings results published in July 2014 revealed that for the quarter ending on June 30th the the quarter ending on June 30th the Japanese corporation had lost 97.2

[21:56] million despite the meteoric success ESS of Mario Kart 8 the cart racer shipped an impressive 2.8 million copies though Nintendo attributed these sales to existing Wii U owners instead of new adopters during the same quarterly

[22:10] period the console itself had only shipped 510,000 units worldwide with total lifetime shipments topping a dismal 6.6 million at the very least its handheld business flourished thanks to the 3DS crossing a sales Milestone of 44

[22:26] million devices sold while the hand held which launched 18 months ahead of Wii U similarly endured an of Forgotten tumultuous launch the product once known as project Cafe wouldn't embark on a Redemption Arc of its own the Wii U

[22:40] received a few last gasps throughout 2015 and 2016 courtesy of key releases including Splatoon Super Mario Maker Twilight Princess HD and Star Fox Zero

[22:53] production on the console amid the slow trickle of major titles however manufacturing of the basic Wii U model was discontinued in Japan in 2015 replaced by a premium bundle packaged with a white 32 GB device and Wii remote

[23:08] plus such an announcement hit Airwaves on the eve of splatoon's Debut and Wii U production as a whole ended globally in January 2017 on the eve of Nintendo switch's arrival but the years preceding Nintendo's unpredictable comeback with

[23:23] regarding whether the legendary gaming outfit should stop making con s and instead focus on publishing luckily Nintendo's handheld hybrid gamble paid off with switch yet the blemish left behind by Wii U won't soon fade

[23:38] especially since its vast library of digital games has been removed from the eShop Nintendo terminated the 3DS and Wii U eops on March 27th 2023 making it

[23:50] impossible for owners of those platforms to purchase from a repository of nearly 1,800 downloadable titles understandably the controversial decision raised video game preservation concerns to which the publisher responded by directing

[24:03] customers towards the divisive Nintendo switch online membership service the backlash on social media culminated in Nintendo deleting the switch online recommendation from his ESOP discontinuation page but the company

[24:16] wouldn't reverse course on the store shutdown thereby relegating Wii U's many unique experiences to high priced physical purchases on the reseller Market as such the poorly received console represents much more than an

[24:28] ostensible test bed for switch it also doubles as a harsh reminder that nothing lasts forever on my business card I am a corporate president in my mind I am a game developer but in my heart I am a gamer

[24:46] developer but in my heart I am a gamer [Applause]

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