Nintendo's Stock Takes a Nose Dive

By Dustin WilsonKhadgar. Wednesday, June 8, 2011 5:08:02 PM

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Nintendo's stock dropped dramatically today, presently at the time of this writing 6.12% down -- a five year low for the venerable Japanese company. This is a troubling turn of events, and isn't a good sign at all after they've just announced a new console at Electronic Entertainment Expo 2011.


Many things can factor into this, but it's my opinion that it's because of the entire way they've handled this new console and a backlash caused from misinformation. The presentation was especially bad. Nintendo's able to put off a good show, but this presentation yesterday was perhaps one of their worst I can think of in terms of delivery. It was delivered awkwardly, and truthfully I think it was delivered too early as all Nintendo had to show at the presentation was a new controller.

The first mistake they made started when they decided to call the new console Wii U. Wii was a horrible name in the first place, especially for English speaking people. Every time you use Wii and play in the same sentence you're creating an unintentional euphemism. This console should have by name alone be differentiated from its predecessor. On top of that mistake they made another one by making the console itself (stupidly not shown during the presentation) and the new controller use the same design aesthetics as the Wii. Visually it looks like a Wii, and by name it is a Wii -- just a newer generation. However, the fact that the controller came with a new console wasn't made abundantly clear at all during the presentation.

It is amazing that Nintendo could actually make a presentation on just a console's controller. I can't think of another console you could really do that with, but they made a huge mistake in not actually showing the console itself. They didn't even mention the console at all. This led people to believe the controller's being shown off was just yet another accessory for the Wii. Why not believe that? It's being called on stage the Wii U; it's got Wii in its name; it's white plastic like the Wii is. Investors saw that and panicked. They saw Nintendo as being incapable of producing a next generation console, focusing instead on creating more accessories for their existing one. If I thought that I would have bailed on my stock as well.

The picture used in this article is a photograph of Nintendo's President and CEO, Satoru Iwata, showing American Nintendo fans on Twitter that there indeed is hardware to go with the controller. This shouldn't have been necessary, and is quite embarrassing to have to do. Even after this image was posted people still believed it was just an accessory for the Wii simply because the new Wii U console looks like the Wii we currently use. If you just glance at the photo without analyzing it's quite easy to mistake the Wii U for a Wii.

With all this said, what do I think about the console itself? I think it's brilliant, and if people want to invest in Nintendo this might be a decent time to buy up some stock. Nintendo's competition laughed at the Wii, and today and at this year's E3 in fact Microsoft was making casual games utilizing its Kinect accessory -- copying exactly what Nintendo was doing a few years ago. I really like the new controller, and the uses for a second screen are already obvious to anyone who's played DS games. Nintendo seems to have third party developers on board with this console with full-fledged hardcore titles announced for the new console, something it hasn't had since the SNES. Whether or not many of them will be available at launch is a different story. Just having big time third party developers on board is immensely great news. While in my opinion Nintendo is by far the best game developer out there its console can't survive on infrequent Nintendo-produced game releases. My only worry with it is whether it packs enough punch under the hood to survive the next generation of consoles. Leaked specs for the tiny box shows that it might.

E3 2011: Wii U Demo3D Pokedex: Victini Freebie

Comments

Manny CalaveraMannyCalavera Wednesday, June 8, 2011 10:26:45 PM

I think the reason why they prefer to keep the name Wii on the new console is to make the "casual" consumers also interested on the system.

Think about it, suppose that the new console was called Cafe. We that follow the industry know that that's the new Nintendo console, we know that in order to get our hands on the new Zelda, Mario, Metroid, etc. we need that hardware.

Whoever, the other consumers, the "casuals" or wherever you want to call it, will look at the Cafe and, although it's a Nintendo product, be suspicious because they don't know what a Cafe is, what it can do, what experiences will be there, etc.

Now, if they see "WiiU" written on the product they know what to expect because they are familiarized with the Wii. The name indicates it's an advance over the Wii, so the "casual" consumer will link their experience with the Wii with this new product and be more interested in it.

I think the name was chosen with this in mind, so that everybody on the game-spectrum can recognize the product. Hell, think about the NES and then SNES. That single "S" told me (when I was a kid) that this console was something better then the NES because it had Super on the name. The "WiiU" affect will be the same on the people that aren't so interested in videogames as we are.

And concerning the console, of course I'm excited, but besides that I think this move it's, economically speaking, a genius move. Instead of presenting a console with a life time cycle of 10 years (like PS3 of Xbox360) they introduced something with less power but with exclusives experiences. That alone justified the interested for gamers and non-gamers. Yes, we lost a lot of 3rd party titles but got something exclusive. Now that the motion controls novelty is wearing off they introduce a new console that conserves the same motion controls but is on pair (hopefully more than) with the competition. When the competition is ready to present a new console, so will Nintendo because it will be the end of the 5 year cycle for WiiU. Plus, this new console is much more easy and cheaper to manufacture then 5 years ago. Sony was loosing money selling the technology of the PS3, even if Nintendo delivers a console that is on pair in terms of graphic power, it won't loose any money because the technology is now more accessible. Greddy bastards...

At least that's what I think wink

Masonwaffletower Thursday, June 9, 2011 12:49:16 AM

I could say many things, but thinking about it I can realize that it all comes down to "I like Nintendo's decisions".



.....though they COULD have come up with a name more original than WiiU :/

That's as dumb as saying Xbox360.

Dustin WilsonKhadgar Thursday, June 9, 2011 2:39:24 AM

Wii U and Wii aren't really comparable to the NES and SNES because the NES wasn't a stupid name that conjured up sexual euphemisms. You didn't hold a remote in the shape of the sexual reference and perform actions with it that mimic other sexual activities. Nintendo didn't make the SNES stylistically exactly like the NES. Nothing was the same. The boxes for the consoles weren't the same. The boxes for the games weren't the same. The logos for the consoles weren't the same. Nothing was the same. There were clear differences between the two. To a layman's eye there's nothing visually different between what they see with the Wii U and the original Wii. It's created widespread confusion and therefore investor panic. They're still trying to convince people it's a separate console. Most people aren't tech minded like we are, and what Mr. Iwata is holding there in that photograph up top looks just like the Wii in their living room to them.

It's a big mistake. They'll recover; they look to have a lot of third party support for this thing. People during the presentation didn't look to be too excited about it, but excitement for the Wii U went up as soon as they started being able to use the controller. They'll hopefully sell gobs of the things.

Masonwaffletower Thursday, June 9, 2011 2:58:07 AM

Hm, I guess I really never thought of the tech-minded barrier as a problem :/

Nintendo may have overestimated the market they opened up. To be honest, it seems to me like they're pulling an E3 2005 and only giving us scarce details until the Tokyo Game Show, or at least letting the hype build from E3 before explaining themselves further.



Needless to say, if i wasn't completely broke, I'd try and invest in at least a few shares of Ninty stock right now bigsmile

AntonCaptainSeagull Friday, June 10, 2011 1:52:35 AM

Yeah, I think that the design is too similar, and I never thought that the machine would be called "Wii 'anything'" - though I think that by now everyone but Dustin is over and forgotten about the Wii name being synonymous with a certain part of a mans physical anatomy. And the movements the remote mimics with it. Really, I havent heard any jokes about it for ages.

It really presents itself as a half step though. But maybe thats the whole idea? maybe its trying to come of as the equivilant of a PSmove or Kinect? I don't like that idea but maybe thats what it is.

It's crazy to think that too, since the only reason the DSi looked so much different than the DSLite was so that it was easy to see it was a different system. The same with the change of 3DS visual design from the DSi.

Dustin WilsonKhadgar Friday, June 10, 2011 6:33:56 AM

It's not really something you forget. You just don't make a big deal out of how stupid the name "Wii" is for a product to be sold to English speaking people after half a decade. They've just repeated the same mistake. On stage during the presentation the other day Reggie acknowledged the name was made fun of and then continued to essentially BS his way through describing the reasoning behind the name "Wii U". The joke is relevant again because they brought it back up themselves.

I don't think it's a half step. They're trying to sell affordable good performing hardware to people for profit from the onset while the competition is trying to sell overpowered volatile machines at a loss from the onset. We don't know what Microsoft or Sony will do for their next consoles, and I don't think Nintendo really cares. This controller here offers something new, but it retains the roots of console gaming and the motion control the Wii brought at the same time. I think name and design aesthetics aside it's a good step forward, personally.

The thing is technically consoles don't need as much power under the hood as desktop computers do because they're not running remotely as many processes at one time as a PC does. You're programming to the hardware so there's clear advantages there as well, especially when not having to use APIs designed for multiple hardware. The Wii has a 729 Mhz processor in it. Imagine even remotely trying to run Super Mario Galaxy on a 729 Mhz PC. Unthinkable.

I think the controller is really what you see there. They're merging classic console gaming with what they did with the Wii. The innovative part is the screen in the controller itself, and I think it'll be really cool to see what developers think of to use that extra screen for. That's the biggest news from this presentation really... Nintendo's got some big time developers excited about it. Seeing these developers make their big titles for a Nintendo console again would be great. I'd have much less need for a second console.

AntonCaptainSeagull Friday, June 10, 2011 4:06:33 PM

I didn't mean that it actually is a half-step, just the presentation felt like it, the poor presentation you were talking about. I too agree that it is a good full step forward, and I personally like the similar Wii look.

Cutting Spoonhellspork Friday, June 10, 2011 6:58:58 PM

I think the investors wanted a clearer declaration that the new hardware should be more powerful than PS3/360, otherwise they'll figure much of the Wii U's potential will only be discounted ports of games that never landed on original Wii.

There should have been more commitment on internet gaming. This touch controller could have a nice virtual keyboard but the screen position makes typing very awkward. In fact, it would be almost impossible to blend touch mechanic with button controlls. See also the original Xbox controller for more size jokes.

It would be shockingly cool if Virtual Console allowed you to play different classic games on the screens of different controllers (simultaneously), but I doubt they planned for that.

Dustin WilsonKhadgar Friday, June 10, 2011 7:52:29 PM

I don't mind the Wii look, but I think they should have thought what continuing the same look would mean.

Well touch controls can work fine with the buttons as long as you're not expected to do both at once... unless you only use one side of the controller's buttons. It's similar to how the Wii remote is used in games. You can't really expect to hold it in every combination at once. The buttons are close enough to the edge to where people with average sized hands wouldn't have trouble reaching the buttons. That's what was wrong with the original Xbox's controller. Unless you had gargantuan hands you simply couldn't reach all the buttons you needed to. That's not really the case here. Weight's the factor in something built like the Wii U controller is, but word's coming back that the weight of the thing isn't that much of a problem.

billsofat Tuesday, August 30, 2011 5:49:45 PM

wiiu still looks cool zip

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