Wii U Sales : Will Nintendo Have to Suspend Production?

[Hamister]

First of all, we don't know Nintendo's weekly or even monthly sales estimate in terms of volumes. Perhaps their revised annual forecast actually already takes sub-30.000 weekly sales into consideration at this time of the year? It can not come as a complete surprise to the company management that sales in May could be very low, due to the current software situation.

If sub-30.000 weekly sales are within estimates, then I doubt we will see a slowdown in production. According to their forecast for this fiscal year, a re-bounce is in any case expected after the summer. Taking that into consideration, Nintendo actually needs to build stock over the summer.

However, if sub-30.000 weekly sales is much lower than revised estimates, Nintendo is in serious trouble. A temporary halt in production of Wii U's is still probably not an option. There are costly risks involved in doing so. For instance it would seriously harm relations with companies manufacturing hardware components for Wii U. It's also an easier process to just increase production from low numbers, than to start all over again from zero.

For the time being Nintendo can afford to take the risk of stockpiling Wii U's for the holiday season. Don't forget that they have a window of opportunity to turn things around before the release of PlayStation 4 and Xbox One. However unlikely such a turn around might look today, don't forget what two little games managed to do in March. With the release of Monster Hunter Tri Ultimate and Lego City Undercover in March Wii U hardware sales bounced back to quite healthy levels. Then imagine what Mario Kart U, Smash Bros U, 3D Mario, Wii Fit U and Pokémon could do to drive sales. Especially if most those games are released before Sony and Microsoft have a chance to gain momentum.

There are three main reasons for low Wii U sales:

1. Lack of AAA games
2. Uncertain market as people generally seem to have a "wait-and-see" attitude (at least until we know more about PlayStation 4 and Xbox One)
3. Lack of true support of the unique features with Wii U

None of the above is impossible to overcome. Certainly not for a company of Nintendo's magnitude.