A day that SEGA fans thought would never come has arrived: SEGA has entered into a deal with Nintendo where Nintendo consoles will get the next three Sonic the Hedgehog titles as platform exclusives. The once bitter rivals are calling this a “worldwide partnership,” which despite being a bit short on details apparently leads us to believe that SEGA will be developing additional new software for the Wii U and 3DS consoles going forward.
The next three Sonic titles will include Sonic: Lost World, Mario & Sonic at the Sochi 2014 Winter Olympic Games, and a third unannounced title that the company is expected to officially announce at E3. The reason for the Sonic exclusive deal has to do with the past performance of Sonic titles on Nintendo consoles, and since they have proven to be good sellers, the deal does seem to make a lot of sense for both companies.
What is more interesting, however, is the other aspects of the partnership that will see additional titles developed for the Wii U. Nintendo needs all of the software support it can get for the Wii U, and just getting SEGA to continue to release new titles for the Wii U is a good thing. Sources tell us that SEGA has some new Wii U titles planned for announcement at E3, but it isn’t known exactly what SEGA might be cooking up.
While a big deal with Activision or Take-Two is really what Wii U owners might want, at least getting SEGA to continue producing Wii U titles is a positive news thing. It does remain to be seen, however, if SEGA can deliver the kinds of titles that will be successful sellers on the Wii U when so many owners are looking for the big titles from some of the other publishers.
Electronic Arts may be through with the Wii U. According to a Kotaku report, EA has confirmed that it is no longer working on Nintendo’s new console.
“We have no games in development for the Wii U currently,” EA’s Jeff Brown is quoted as saying. Brown did not indicate if EA would resume development on the system in the future
Earlier this month, EA confirmed it would not be bringing this year’s Madden NFL 25 to the Wii U. At the time, a representative said, “We have a strong partnership with Nintendo and will continue to evaluate opportunities for delivering additional Madden NFL products for Nintendo fans in the future.”
EA has released four games for the Wii U to date. The first three (Mass Effect 3, Madden NFL 13, and FIFA Soccer 13) were system-launch-day ports of titles that had shipped earlier on other platforms. The fourth game, Need for Speed Most Wanted, hit stores in March, months after that game debuted for Xbox 360, PlayStation 3, and PC.
The brief duration of support for the Wii U is surprising given EA’s vocal endorsement of the system at Nintendo’s 2011 Electronic Entertainment Expo media briefing. To cap off the event, then-EA CEO John Riccitiello promised the publisher’s support for the system. Brown told Kotaku that the quartet of titles already released represented EA making good on that promise.
Nintendo representatives did not immediately return requests for comment.
The NPD Group will report its US video game retail data this Thursday, and in a preview note Wedbush Securities analyst Michael Pachter commented that he’s expecting Nintendo to post yet another weak month of Wii U sales. For the Wii U’s fifth month on the market, he’s forecasting that Nintendo sold just 55,000 units, which would represent a 17 percent decline month-over-month. Moreover, Pachter’s expecting this slide to continue for Wii U, even if Nintendo chooses to implement a price cut.
“The only key hardware device to under-perform our expectations was the Wii U,” Pachter said of last month’s numbers, “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. 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.”
And if the pricing on the PS4 and next Xbox is reasonable, it could really put Wii U in a bind, Pachter added: “Should the new consoles from Sony and Microsoft be price competitive, we think that Wii U sales may continue to stagnate.” In fact, Pachter believes that next-gen consoles are likely to be subsidized and will therefore look even more affordable to consumers.
“We think that the next-generation consoles will perform a wide range of multimedia functions. We should learn more in the coming months, but we expect the next Xbox to have an IPTV tuner that will allow an MSO to deliver services over the Internet outside of the MSO’s regulated geographic boundaries. 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). 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,” he said.
As for March retail game sales overall, Pachter expects the numbers to be up slightly (just one percent) thanks to big AAA releases like Gears of War: Judgment, Tomb Raider and BioShock Infinite.
The game, based in a building at a center for the blind in Newton, Massachusetts, uses audio cues to help blind players find hidden jewels and remove them from the building without being spotted by roving monsters.
After competing in the game, researchers found the players were able to find their way around the building in real-life, suggesting video games could help blind people navigate places they frequent regularly.
“It is a tool to build a map of a place you have never been to before,” said Dr Lotfi Merabet, a neuroscientist at the Massachusetts Eye and Ear Infirmary and Harvard Medical School, whose team developed the software used in the game.
Merabet hopes the video game could be a first step in improving assisted technology for the blind, particularly teenagers who are very media and technology driven.
The World Health Organization estimates there are 285 million visually impaired people worldwide.
Merabet said the video game players were also better at finding alternate paths in the building than other blind people who had been taught the layout by walking through it.
“The video game not only allows you to build a map in your mind, it allows you to interact with it mentally in a way that you wouldn’t be able to if you were taught explicitly (by walking through it,” Merabet explained.
The researchers tested the game on congenitally blind people and those who had lost their sight. The players ranged in age from their teens to 45 years old.
Merabet and his team, who wrote about the video game in the Journal of Visualized Experiments, want to include large-scale mapping in the next version of the game and to use tactile cues and items developed for the video game industry.
But first he said they will have to demonstrate how long it takes to build the mental map, how complex they can make it, and the people best suited to learn this way.
They do not see it as a replacement for how blind people learn but as a supplement to enhance a skill they need, and to build self confidence.
“Somehow you become a better problem solver and you seem to somehow take in the information in a more robust fashion in this gaming scenario than if you sat down and we told you,” said Merabet.
“Video games are not just for sighted people. Blind people can not only play them but interact with them and enjoy them, and they can also be used to do constructive things.”
Warhammer 40K owner Games Workshop has confirmed a new licensing deal with Roadhouse Interactive to develop new titles for mobile space based on the franchise. The developer, who is based in Vancouver, describes the new Warhammer title as a side screening action game.
While Roadhouse confirms that the game is in development, the end mobile platforms that will see the released version of the game are still up in the air at the moment; but more information is sure to be coming in the months ahead, according to the studio.
The Warhammer 40K has had others attempts to capture the tabletop war game in video form before. These Warhammer offerings have met with mixed reviews, but this new title from Roadhouse will be a first for Warhammer 40K in the mobile space.
Nevada has become the first U.S. state to interstate online poker legal and allow state-to-state gaming agreements, beating New Jersey to the punch and putting in place a potential nationwide framework for Internet wagering.
Republican Governor Brian Sandoval signed the landmark bipartisan bill into law last Thursday, authorizing his office to enter into agreements with other states that will in effect allow Nevada-based companies to host interactive gambling for residents of other states.
A number of companies have already been granted Nevada licenses for online poker, but were prepared to be limited to serving Nevada residents. Applicants include social gaming leader Zynga Inc. Shares in Zynga leapt as much as 7.4 percent on Friday.
With the bill, Nevada – home to Las Vegas, the world’s second-largest gambling hub – wants to pave the way for national Internet wagering even though efforts at federal regulation have stalled. Established companies including MGM Resorts and Wynn Resorts hope they can add new customers and pitch online players to come to Vegas.
“This bill is critical to our state’s economy and ensures that we will continue to be the gold standard for gaming regulation,” Sandoval said in a statement after signing the bill on Thursday.
The bill removes a provision requiring federal legislation or Department of Justice approval before online gaming licenses are made active, according to Nevada’s statement.
Nevada’s legislation comes as New Jersey – home to Atlantic City – considers a similar move to legalize online gambling. Republican Governor Chris Christie rejected a measure earlier this month that would have allowed Internet gambling, but has said he would consider approving such a law if it was framed properly.
Sources that we have spoken with from several studios have indicated that their publishing partners are pulling back a bit for the time being on the development of additional Wii U titles. The reason is simply the lack of sales on the Wii U console.
Despite coming out of the blocks fast, sales have not been that strong; and both the Xbox 360 and PlayStation 3 had sales numbers in January that topped the Wii U. This, of course, has not gone unnoticed by publishers and developers alike.
As one source told us, “While planning for the platforms that our next titles would be released on, it was obvious that our titles for this year and at least the first half of next year would be primarily focused on the Xbox 360 and PlayStation 3, with several titles for the next-generation systems. Talk of Wii U ports for any these projects was met with a negative reaction, saying there just was not enough sales to warrant the development cost associated with it.”
Another source said to us, “We are only planning the couple of Wii U releases that we are already committed to doing and we might do one or two ports, but right now there just does not seem to be a demand. Our thinking is that the safe bet is to focus on the 2013 releases for Xbox 360 and PlayStation 3, and a couple of those will be converted to the new next-gen systems. In 2014, however, we expect our titles that come out after mid-year to be focused on the next-gen consoles, with only a few those being released for the Xbox 360 and PlayStation 3, as well, unless sales of the next-gen consoles don’t go well. The Wii U would have to make very significant gains to figure into our 2014 and 2015 planning at this point.”
Nintendo needs something to happen to help get the Wii U flying off the shelf again; but many are now waiting to see what the Next-Generation Microsoft and Sony systems are going to offer and at what price before trying to choose which one to buy or if they will ride it out. If cost is the main factor, we could see a lot of gamers waiting, as long as they continue to get ample software flowing to their current systems, which is no real help to sales of the Wii U.
Is this another nail in the coffin of the dedicated games consoles? Nintendo’s Dreamcast had it’s moment. The vultures were out in force to greet Nintendo’s latest revision of its sales forecasts, circling the Kyoto-based company with a naked and unseemly hunger. Wii U has missed Nintendo’s own sales targets; the clouds are gathering, the doom-mongers are checking their funeral outfits.
The headline figure that drew absolutely everyone’s attention was this – by the end of March, Nintendo will have sold 4 million units of the Wii U, which is significantly down from the 5.5 million it had originally expected to sell. 3DS sales are also down somewhat on projections, at 15 million rather than 17.5 million for the full financial year, though less attention has been paid to that stat, largely because 3DS is already solidly established in the market, with a 30 million installed base.
So here’s the bleak scenario – the Wii U, with only 4 million installed at the end of what might reasonably be considered its “launch window”, has failed to capture consumer imagination and isn’t a viable platform for third parties. Software projects get cancelled, publishers draw back their support, sales slow down even further and the platform enters a death spiral. Within a few years, Nintendo is forced out of the hardware business and follows Sega into third-party publishing – on tablets and mobiles, most likely.
I have quite a lot of problems with that scenario (and with some of the more moderate versions of it which have also been floating around). For a start, it may not match Nintendo’s targets, but 4 million units sold after a few months on the market isn’t actually that bad for a new console. It’s very significantly better than either the PS3 or the Xbox 360 managed; in fact, the only home console that has outperformed the Wii U’s launch window, in terms of units sold, is the Wii itself.
“Nintendo’s new home console is always going to be stacked up against its old home console, and that’s a tough thing to measure up against.”
That’s what you might call a tough comparison, even if there’s a harsh fairness to it. Nintendo’s new home console is always going to be stacked up against its old home console, and that’s a tough thing to measure up against given that its old home console was the fastest selling and most profitable home console in history. Old hands at Sony might wince sympathetically; the PS3, despite matching the Xbox 360′s worldwide sales curve at almost every step on the way, has often been portrayed as a bit of a failure due to comparisons with the all-conquering PS2. The 360, by contrast, is enshrined in conventional wisdom as a triumph, because it built so strongly on the not-terribly-successful original Xbox business.
Comparisons like those are useful for building narratives – especially bull-and-bear market narratives, in which a company’s actual performance is vastly less important than its trajectory. They’re not, however, very useful for building an accurate picture of a product’s viability. Wii U has missed its targets (Nintendo’s own, so the company can’t even accuse analysts of over-egging the pudding in this case) and hasn’t performed as well as the Wii did; there’s a bearish narrative about decline in there. On a practical level, though, Wii U has sold more units than Xbox 360 or PS3 did at launch, it’s lost far less money (in fact, Nintendo will record a full-year profit, compared to multi-billion dollar losses for Microsoft and Sony’s games divisions in their launch periods) and, crucially, it can’t lose the support of its largest developer and publisher, because its largest developer and publisher is Nintendo itself.
Is this to say, then, that all is rosy in the Wii U garden? No, of course not. The console clearly hasn’t captured consumer imagination to the extent to which Nintendo expected, and a major push will now be needed both in terms of software and in terms of marketing and communication. The biggest risk Nintendo faces is that of failing to address the huge audience of casual consumers who bought in to the Wii, which would confine the firm to its core audience – but that core audience is itself quite significant, on the sale of 20 to 30 million consumers worldwide. Capturing additional casual consumers (or core consumers who fall more readily into the Sony and Microsoft camps, but may be swayed by certain software titles) would drive the console past those levels; even if it achieves only half the success of its predecessor at this task, it’s hard to see the Wii U ending up with an installed base much south of 50 million.
The stock market won’t like that, and that’s fair enough. Nintendo was ludicrously overvalued in the previous generation – at one point becoming Japan’s most valuable company, ahead of the world’s top car-maker, Toyota – and if the Wii U and 3DS don’t match up to the sales trajectory of their predecessors, the next generation will see an undervaluation that may be equally ludicrous. There will undoubtedly be grumbling at this from shareholders, but Nintendo is more insulated from shareholder discontent than many other firms, thanks to the large shareholdings of former president Hiroshi Yamauchi (who owns the single largest voting bloc in the firm) and of Japanese banks and institutions, who are generally less activist as shareholders than their western counterparts.
Share price decline, however, does not equate to product non-viability, nor does it precipitate a collapse in a company’s own market – or even its profits. The viability of a product needs to be considered in more solid and less sentiment-driven terms. Does it make a profit? Does it have a large enough installed base to justify continued development?
These are, of course, moving targets. Profitability rises as a console’s lifespan continues, with production costs generally dropping off faster than hardware price cuts reduce revenue (although there are exceptions, the 3DS being an obvious one). Rising software sales also increase profitability – note that the Wii U, despite being Nintendo’s first console to launch as a subsidised piece of hardware, is comfortably in the black after its launch, having sold 3.8 units of software for every console so far. That can be expected to rise significantly; the Wii, often decried as the console that sat unloved and gathered dust, actually has an attach rate of 8.7 software units for every console sold. Finally, foreign exchange movements also influence profitability, and after a few very tough years, the Yen is finally nudging in a positive direction for Nintendo (and Sony). After trading at under 80 Yen to the dollar for most of 2011 and 2012, it’s now over 90 Yen to the dollar, a level it hasn’t reached since mid-2012. It’s still a long way from the pre-financial crisis levels, which rarely dipped below 100 Yen to the dollar, but it’s enough to win Japanese manufacturers some breathing room in their profit figures.
Installed base viability is also a moving target. Bigger is better, but it’s not as simple as that; you can’t simply say “well, there are half a billion iOS devices out there and even more Android devices, so games consoles are irrelevant now”, even though some commentators try to do exactly that. For many types of software, a machine with a 30 million installed base made up entirely of active gamers who are willing to spend $40 on software every few months is more viable than a system with a 150 million installed base whose users aren’t hugely engaged with game software and only spend sporadically, in smaller amounts. Conversely, there are many types of software which absolutely thrive in the latter environment, and would fail utterly in the former. Development costs are also a big factor, because if your development budget soars, you must be able to address a bigger market (or somehow charge them more money) in order to counterbalance that.
In other words, when it comes to Nintendo, stop trying to bring everything back to bull and bear market perspectives. Those have their place, but they’re not terribly useful in attempting to predict the shape of the games industry as we proceed towards an uncertain future. They tend to give us extremes and ignore subtlety; where any individual with a shred of intelligence and insight can look at the news that “Wii U isn’t doing as well as Wii” and interpret that in context as a decline but not necessarily a catastrophe or a herald of collapse, a market-led approach allows for little if any of that subtlety.
Nintendo has a lot of work to do on Wii U, but we’ve been here before – it had a lot of work to do on the 3DS as well. While 3DS’ price cut helped a great deal, much of the real work was done through significantly improving and bulking out the console’s software line-up, and a similar process is underway with Wii U. One need only look to the rapt response which the recent Nintendo Direct broadcast received from media and Nintendo fans alike to see the truth of Nintendo’s situation. This is a software company at heart. Its consoles are enabling hardware for its software, and as such, they sell in parallel with major software launches. Of course, this is a valid argument in favour of Nintendo’s ultimate destiny outside the hardware market entirely, but for now, the company isn’t willing to give up that level of control – and for now, it doesn’t look like it needs to. I don’t expect Wii U to match the success of Wii, in the medium or long term – but equally, I don’t count myself among those who expect it to be Nintendo’s last console. Sentiment is negative right now, but fundamentals aren’t, and for a business like Nintendo, it’s the latter that counts.
Nintendo has cut forecasts for its consoles, expecting to sell 4 million Wii U units by the end of March – down from a prediction of 5.5 million units.
It also said it projected 3DS sales to hit 15 million rather than 17.5 million and dropped DS expectations from 2.5 million to 2.3 million.
“Wii U hardware sales have a negative impact on Nintendo’s profits”
The company has raised its full-year profits expectations to ¥14 billion ($153.8m) following the launch of the Wii U console. The system sold just over 3 million units from November to the end of December.
That’s up from the ¥6 billion it predicted back in October following slow sales of the 3DS handheld.
For the nine months ended December 31, the company recorded net profits of ¥14.5 billion ($159m) compared to a loss of ¥48 billion the previous year, with sales of ¥543 billion ($5.9bn). Nintendo noted that “owing to the fact that the Wii U hardware sales have a negative impact on Nintendo’s profits, the operating loss was ¥5.8 billion.”
The Wii U has sold 3.06 million units since launching in November and December last year, with 11.69 million game sales for the system.
New Super Mario Bros U had sold 2.01 million units and Nintendo Land 2.33 million.
The original Wii is still outselling the Wii U, with 3.53 million hardware sales and 45.08 million software sales.
During the nine months Nintendo sold 12.71 million 3DS consoles and 39.56 million games for the systems. The company noted success with the 3DS console cut in to sales of the regular DS, with only 2.15 million sales of hardware and 30.24 games.
Dropbox said the deeper integration includes several new Samsung devices, such as the upcoming Samsung Galaxy Grand smartphone and smart cameras. Samsung cameras will automatically push the photos to Dropbox’s cloud storage service.
Dropbox is available natively on the Samsung Galaxy III, Samsung Galaxy Note II, and Samsung Galaxy Camera. Users configuring the devices will be offered free 50GB of capacity when they activate Dropbox, according to Lars Fjeldsoe-Nielsen, head of mobile business development.
Dropbox’s new file-sharing capabilities leave a thumbnail of the original photo or video content on secondary device that are also Dropbox enabled. The actual content will not download until a user clicks on the thumbnail.
“That way we don’t eat everyone’s data plan,” Nielsen said. “It gives you the same access to everything, whether it’s on your smartphone, laptop or in the cloud.”
Additionally, Dropbox file sharing will be available on Samsung’s new smart televisions via its AllShare Play application.
With AllShare play, users can bring up photos or video from Dropbox and view them on their Samsung Smart TV.
Nielsen also said Verizon has become a partner of Dropbox, meaning Verizon devices can use Dropbox’s file-sharing service.
“Using LTE…we’d love to broadcast the Super Bowl in the 2014 time frame,” McAdam said in an onstage interview with NFL Commissioner Roger Goodell.
Goodell noted that a partnership with Verizon has enabled an NFL Mobile channel, atop of other NFL TV and Internet offerings that bring pro football to audiences year-round.
“There’s never been a better time to be a fan,” Goodell said.
Whenever the NFL offers fans another way to learn about players or stats or games, the content has been a success, he said. “Once they find content, they want more,” including the news from the draft season after the regular season.
McAdam said that 4G LTE wireless from Verizon now reaches 89% of the U.S. population, offering fast speeds and capacity. LTE is generally rated at 10 Mbps on downlinks. But LTE also has the capacity to allow streaming of live video over the same channel to millions of users, McAdam said.
“Our goal is to break down barriers between home and the globe,” he said.
McAdam’s keynote also looked at other ways Verizon is using wireless networking to improve in-car technology and healthcare.
Many insiders are reporting that despite no official word yet from EA nor developer Criterion, the release of the Wii version of Need for Speed: Most Wanted looks to be set for mid-March for North America and Europe, with a Japanese release expected for March 14th.
The Japanese release seems to be backed by an EA press release in Japan, but the North American and European releases have yet to be confirmed. Sources believe that we could see the North America release on March 12th, with the European release to arrive on March 15th. Whispers suggest that we will see an official announcement from EA confirming the North American and European releases soon.
The Wii U version is said to support Off-TV Play, which translates into the entire gaming experience able to be played on the Wii U GamePad screen in addition to the regular TV on screen play. Special Wii U features beyond that remain unknown at this time.
Still no news about the expected release date for the PlayStation Vita version, but our sources tell us that it is still in development; and despite rumors, it has not been cancelled.
IGN is going up for auction, according to a Wall Street Journal report. After a year of fruitless talks with potential bidders, parent company News Corp. is working with investment bank Allen & Co. to auction off the group of entertainment and video game websites.
News Corp purchased IGN in 2005 for $650 million. Last year, the company also acquired online gaming network UGO and folded its properties (including 1Up.com) into its one-time rival. IGN has also sold a handful of businesses in recent years, including Rotten Tomatoes, Direct2Drive, and GameSpy Technologies. The Wall Street Journal (another News Corp. publication) reports that IGN is expected to sell for about $100 million now.
The paper reports that a number of companies have expressed “at least some interest” in picking up IGN, including Break Media and SAY Media. Recent turnover in IGN management, including president Roy Bahat and News Corp. chief digital officer Jon Miller, was said to have hampered the sales process.
Sources have whispered to us that Nintendo is going to be spending heavily this holiday season to promote both the Wii U and 3DS XL. The advertising push will not be limited to just North America, but Europe and Japan will see a very significant spend as the company will heavily promote using TV, social media and print.
It is believed that Nintendo’s plan is to promote the 3DS XL very hard, with a bit of the Wii U sprinkled in. Nintendo is expected to be targeting both first time buyers as well as upgraders this holiday season. It is believed that Nintendo is looking to place a lot of focus on the 3DS XL because inventories for the unit are good; whereas the Wii U does seem to be much tighter than anyone expected it to be. The Wii U inventory shortage is already leading to wait lists, and some retailers are telling customers that they honestly don’t know if they are going to be able to fill all the requests they have for Wii U hardware.
Nintendo, of course, has a lot riding on this holiday season and the company is hopeful that they will be able to see significant sales increases over what they have seen the last couple of years; which will show that Nintendo had the right strategy all along. We just don’t know how well the Wii U and 3DS XL will do this holiday season, but Nintendo seems poised for it to be a successful holiday selling season if they can deliver enough product.
For now, the game, Clucks, can only be played by iPhone users. The Android version of the app will be released by the end of the year, according to Sol Lipman, vice president of AOL’s Mobile First unit which identifies new market opportunities in the mobile space.
The once-dominant internet service provider, envisions its release of Clucks last Thursday as just a first step into the mobile marketplace which it sees as key to revive its brand.
Clucks players use smartphones to record a 12-second video of themselves describing a word, for instance “tree.” Their opponent then receives the video and must guess the word.
“You’re trying to send clues without using the word ‘tree’, or associated words like ‘wood’ or ‘leaves’ or branches,’” Lipman said.
To ensure that none of the banned words are used by players, the Clucks app incorporates voice recognition technology.
“If you use one of those words accidentally or intentionally, it will catch you cheating and take points away,” Lipman said.
Lipman said Clucks was inspired by two trends in mobile apps: social video, with apps such as Viddy now having over 40 million users, and turn-based games such as Draw Something.
The company plans to monetize the game through its sponsors. Rather than ads, they aim to incorporate promotional content within the app, such as the ability to play a pre-recorded round of Clucks with an actor or film director providing the clues.
Lipman said the company has other offerings it plans to build on top of the platform.