How Nintendo is taking advantage of the lull before the PS4/Xbox One storm

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After a rough couple of years, Nintendo should be patting itself on the back. The latest sales report by NPD on gaming industry sales for the month of September, picked up by Joystiq, shows that not only is the Nintendo 3DS the top-selling device (both handheld and console) for the fifth month in a row, but the Wii U has seen its sales triple thanks to a new price cut and the release of Legend of Zelda: Wind Waker HD.

It may be short-lived, due to the impending releases of new consoles from Sony and Microsoft for the holidays, but NPD’s sales history shows just how different Nintendo’s sales patterns are compared to those two companies. Instead of the high-impact splash and “Day One” madness that Xbox and Playstation releases tend to generate, both the 3DS and Wii U have benefited from the long game, gaining sales over time through the release of high-profile exclusive software titles and strategic price cuts.

animal-crossing-3ds-screenshotThis is largely due to Nintendo’s old-school commitment to producing its own games. At the time they launch Nintendo consoles are generally lacking a roster of playable software, save for the proof-of-concept party game (think Wii Sports) and the flagship Mario title. Nintendo has focused on creating its own software in house, and that, unfortunately, takes time. Compounded with the need to support a current console while a next-gen model is under development, it means that Nintendo doesn’t have the bandwidth to create a dozen-strong launch title list like Sony or Microsoft.

Right now, the company is really getting going. For example, the 3DS’s sales have been largely affected by the release of two blockbuster game titles, Animal Crossing: New Leaf (which drove sales upon release in June and July) and the newly-released Pokemon X and Y (which sold 4 million titles at launch alone). While these look like small feats compared to the sale of something like Grand Theft Auto V, it’s worth stressing that the former titles are exclusive to the 3DS only, which means that consumers will buy the handheld to play the game. Nintendo plans on continuing this strategy through the holidays with Mario Party: Island Tour and Zelda: A Link Between Worlds.

The Wii U, which has had a shaky (at best) 11 months on the market, has benefited from both an exclusive title and a price adjustment enacted on September 20. A premium Wii U console with Wind Waker is now $299, and the “basic model” has been phased out — to the company’s benefit, as there was very little reason to take the cheaper console. The boost in sales, which Nintendo has declined to give exact numbers on, also comprises just 15 days on the monthly tally.

While it seems like common logic for the Wii U to see a rise in sales, especially now that the Xbox 360 and Playstation 3 are becoming phased out, it’s important to note that both consoles’ sales still vastly outpace the Wii U, which was third on NPD’s consoles list. In fact, according to VG Chartz, Microsoft hit its 80 million unit milestone this month with the sale of 1.6 million consoles. That monthly gain comprises nearly half of the Wii U’s overall total sales.

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In a lot of ways, Nintendo’s far-sighted strategy is best suited to be off-cycle with direct competitors, rather than synced up like Microsoft and Sony. That’s because Sony and Microsoft have very much squared off against each other: with so many overlapping titles and features, budget-minded consumers will choose either the PS4 or the Xbox One, not both. The Wii U has very much entrenched itself as a niche console, with its alternative design aesthetics and a focus on in-house titles. It’s a console that can be a complement to either Sony or Microsoft’s offerings (dependent on taste), and can be even more attractive now that it’s hundreds of dollars cheaper that any other big-name console.

But Nintendo’s strategy is also high-risk. It relies on continued loyalty and allegiance to decades-long franchises like Mario, and rarely does it vary from that trajectory. Nintendo has been famously difficult at working with third-party titles, most notably losing its Rayman Legends exclusivity with Ubisoft. It also risks requiring a price slash to get sales — a strategy that neither Microsoft or Sony need to embrace, especially only a year into a console’s existence. Nintendo relies on software to turn observers into owners, rather than letting the hardware’s quality speak for itself.

Despite its age and the influx of competition on the horizon, the Wii U is shaping up to have a promising 2014. The long awaited Wii U titles (including the latest Super Smash Brothers) will be released, along with third party titles (most notably Assassins Creed IV: Black Flag and Watchdogs). There is the value brewing in the Wii U that is already apparent in the 3DS, but it will take some more time. That is, if the holiday consoles don’t wash the hype away.

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