Not even a (belated) price cut can help Nintendo's Wii U

Posted by Trent Nouveau

Nintendo may have released it's next-gen console almost a year ahead of Microsoft and Sony, but it is quite clear that most core gamers are waiting for the Xbox 720 (Next) and the Playstation 4 (PS4).

Indeed, Wedbush Securities analyst Michael Pachter says he expects the Japanese-based corporation to post yet another weak month of Wii U sales, perhaps in the neighborhood of 55,000 units, which would represent a 17 percent decline month-over-month.

Not even a (belated) price cut can help Nintendo's Wii U

Worse, Pachter predicts the slide will continue for Nintendo's flagship console, even if a price cut is belatedly implemented.

"The only key hardware device to underperform our expectations was the Wii U 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," Pachter opined in an industry note.

"We think 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 PS4 and Xbox 720 weigh in at a reasonable price point, the two consoles would make life even more difficult for the already flailing Wii U.

"We also think 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)," said Pachter.

"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."