It seems that it was just yesterday that everyone was either dying to get a Wii or had just purchased one and was talking about how wonderful it was. Now, sales are way off and Nintendo is in pain.
The rise of the Wii was truly meteoric. Literally every demographic from preschoolers to seniors was queueing up to buy the Wii console and the games that went with it. It seemed as if it might be a bottomless well of sales. Today, it’s a different story, and Wii manufacturer Nintendo is truly feeling the pain, according to a CNET article. Quarterly revenues for the Japanese gaming giant have dropped as much as 40 percent from last year and it is starting to look like they will not be coming back any time soon.
Nintendo executive Satoru Iwata thinks he knows the reason for the decline in sales. He has told analysts and investors that there is no longer enough software to keep sales high. Iwata said “The Wii has stalled. Games of high demand could not be continuously released and the good mood has chilled.” He also said that he thought that a recovery from the decline in sales would be very difficult, although he is sure that the Wii will continue to sell well in the future.
Nintendo’s problems with the Wii may be indicative of the rapid changes in consumer demand for their high-tech toys. In many ways, electronic gadgets are part of a fad-driven marketplace, where consumers are always on the lookout for the Next Big Thing. The Wii and Nintendo may be in the unenviable position of be the Last Big Thing, with sales and revenues sliding instead of snowballing. Staying ahead of the consumer desire curve is difficult and resting on previous laurels is a critical mistake. When your customers are likely as not to be fickle, gadget manufacturers need to look well into the future to keep ahead of the game. Nintendo may have broken that rule.