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Does Nintendo Have The Right Holiday Strategy?

Now that the cat’s out of the bag regarding everything you can expect from the Wii U this year, we’re starting to get a clearer idea of what Nintendo’s strategy is going to be this holiday season, and how it affects the future of the company as well. What does Nintendo have up their sleeves, and are they making all the right decisions? Read on for my analysis.

The first thing to note is that Nintendo is only predicting combined sales of Wii and Wii U consoles between the Wii U’s launch and the end of the fiscal year in March to be about 5 million units. This is not a prediction of a slow start, but a conscious decision to limit the system’s availability. The list of stores that haven’t sold out of Wii U pre-orders is getting smaller and smaller, and GameStop managers are being told that they are not to tell customers to expect a second wave soon. This shortage is intentional, and it’s not going away anytime soon.

The Wii U, as a system that’s trying to appeal to both hardcore and casual gamers, needs to prove some things to gamers before it becomes a must have item. The fans lining up in droves to place their pre-orders in are the customers who have been anticipating the system’s launch for some time, and had made up their minds to buy it a long time ago. While it may seem like a bad idea to have to turn some of them away, Nintendo knows what they are doing. As with its predecessor, the Wii, the Wii U will draw a lot of hype from this strategy, bringing the system to the attention of the larger audience who isn’t yet sure if they want the system.

This Christmas isn’t going to be all about the Wii U. Nintendo is make sure they hit on a few key points, such as gathering some third party exclusive titles like ZombiU and Bayonetta 2, but overall they are not going to be pushing this system hard for some time. For the Wii U, this Christmas is all about generating interest in the system and support from developers. Nintendo’s money maker is going to be the 3DS come November and December.

Heading into its second holiday season, the 3DS has a lot of momentum, a new model, and a 2D Mario game. As I previously detailed, the 3DS has a chance to break 30 million units sold by the end of the year. Most families are not likely to buy two video game systems in the same year, so for a lot of people it’s going to come down to the 3DS versus the Wii U. With a larger install base, more games, greater availability, and a much cheaper price tag than the Wii U, the 3DS is the better option this Christmas season, and it’s the option that Nintendo is going to want to focus on.

I believe Nintendo is making the right call by keeping the Wii U on a tight leash while the 3DS runs free. In the long run, it will likely lead to greater success for both systems. The problem here is that the 3DS needs a little something more. It got a major boost in the fall from the launch of the 3DS XL and New Super Mario Bros 2, but the only major holiday title for the 3DS this year is Paper Mario: Sticker Star. With games like Monster Hunter Ultimate, Luigi’s Mansion: Dark Moon, and Animal Crossing: Jump Out all slated for release early next year, I can’t help but think Nintendo should have made a better effort to have at least one more big-selling game available come Christmas time this year.

Regardless of a lackluster lineup for the end of the year, the 3DS is going to see big numbers this holiday season. By now it has proven it has distinguished itself from last generation’s DS and proven that it is itself a worthy buy. The smart choices Nintendo made in the fall will carry over into the holiday season, with or without a second big title to compliment Sticker Star. Even after the bloated numbers from Christmas time start to take a dip, the stellar lineup for early 2013 should keep the system selling respectably.

So while it may seem like Nintendo is being conservative this year, with both the limited supply of the Wii U and the lack of a second must have 3DS title, their overall strategy is pretty sound. The important thing is that Nintendo continue to capitalize on this in the future. By next holiday the Wii U needs to be a much more accessible item. This means Nintendo needs to stop the shortage, hit heavy with marketing, continue to gather exclusive titles, and possibly reduce the system’s price. The Wii U will consistently be sold out in its early life due to the shortage and a dedicated fanbase, but eventually Nintendo’s going to have to open the floodgates and get the system out to the people who are still on the fence.