Nintendo to target emerging markets with new consolesBy Robert Baird May 08, 2014 6:03PM UTC
Super Mario creator Nintendo is to break with its existing model by selling game machines specially designed for emerging markets, amid flagging sales.
Starting next year, the Japanese manufacturer will develop completely new game machines for emerging markets, shifting from its current strategy of selling the same units worldwide.
In an interview with Bloomberg, company president Satoru Iwata said this was instead of repurposing existing hardware such as the Wii U.
“We want to make new things, with new thinking rather than a cheaper version of what we currently have,” Iwata said.
“The product and price balance must be made from scratch.”
Speaking in Tokyo, Iwata outlined plans to launch a smartphone web app for its soon-to-be released Wii U game Mario Kart 8, that will allow users to track progress and watch videos of games played by friends.
Nintendo will also be offering near field communications-enabled figurines that will allow the transfer of game information between devices.
The Kyoto-based company announced yesterday it recorded a 23.2 billion yen ($229 million) loss for the last fiscal year, a reversal from the slim 7 billion yen profit it made the previous year.
In January, it slashed Wii U sale estimates for the 12 months to March from 9 million to just 2.8 million units, amid a shift of some users to smartphone apps and others to the more popular Playstation 4 and Xbox One consoles. Launched in November 2012, the Wii U has been swiftly outsold by the six-month-old PS4 – sales of Sony’s console passed 7 million units last month.
Nintendo has also struggled to compete with the explosive recent growth in smartphone and other mobile devices. Tellingly, games played on iOS and Android devices generated more sales than handheld devices like the Nintendo 3Ds for the first time last year.
Despite this, Iwata has resisted releasing Nintendo’s popular franchises on smartphones, as he doesn’t see sustainable profits in such a volatile market.
“We have had a console business for 30 years, and I don’t think we can just transfer that over onto a smartphone model,” he said.
It’s unclear which countries the Japanese gaming giant will target first, though China will certainly be among them. China recently lifted a 13-year ban on gaming consoles, and rival Microsoft has already announced it will begin selling its Xbox One console there in September.
Getting the formula right could be very lucrative: PricewaterhouseCoopers estimates China’s video-game industry will generate about $10 billion in sales next year.
Nintendo expects Wii U sales will recover to 3.6 million units, and sales of its game titles to 20 million units, this financial year.
More details on the new consoles and figurines are expected at the Electronic Entertainment Expo in June.