The Basic version of the Wii U.

SEPT. 13, 2012 • Nintendo Co. Ltd. announced official prices and release dates for two Wii U launch SKUs. The Basic version features a white 8GB Wii U while the Deluxe package sports a black unit, boosts memory to 32GB and bundles in a copy of Nintendo Land. North America will be first to get the Wii U on Nov. 18 with MSRPs of $299 and $349 for the Basic and Deluxe models. The console arrives in Europe on Nov. 30, but Nintendo would not release overall European pricing due to the vagaries of retailing in nations throughout the region. Japan will see its Wii U launch on Dec. 8 priced at ¥26,250 ($339) and ¥31,500 ($406). The Wii U is launching with nine titles including New Super Mario Bros. U, the first Mario game to launch with a Nintendo home console in 16 years. Nintendo estimates that 50 Wii U first-party and third-party titles will be released between November and the end of the company’s fiscal year in March.

Impact: Having forecasted $300 as a launch price for the Wii U with possible bonus bundles, Nintendo’s announcement falls in line with what we expected.  The biggest issue is that the $299 entry price point does not include a game and thus is effectively $350. Naturally, all existing Wii games will play on the Wii U, so shipping with no game at $299 is not as bad as it sounds. Nintendo is also launching with New Super Mario Bros. U, and likely wants to boost as many sales of its premier franchise as possible. However we think there are enough early adopters that it will not be too much of an issue as Nintendo can lower the price of the bundle with software next year. For now, those early adopters who will line up for the Wii U are not as price sensitive.

Nintendo has a strong fan base of core gamers but also they have appealed to more casual gamers with the Wii and DS. With a big push around mobile and tablet devices it is much harder to appeal to the casual base but we think they are at least doing their best at trying. The new gamepad is getting all of the attention, but what is sometimes lost is that the Wiimote is not being eliminated or replaced. Nintendo fully intends that consumers that already own Wiimotes will use them with the Wii U. There is no replacement controller. So by Nintendo’s calculation, they are not diminishing motion gameplay, but enhancing it with the new gamepad. The Wii U still has the motion input going for it but now is also going after the appeal of tablets while offering more iTV functionality. 

In our view, Nintendo is not drifting away from what made the Wii a success. It is just that more casual consumers are fickle and there is a lot more competition so it is harder to stand out.  All in all we think it is unlikely that the Wii U will be as successful as the Wii for those reasons, but less success doesn’t necessarily translate into a complete failure either. It is just hard to match something as successful as the Wii which set the bar at an extremely high level.