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Analyst: Wii U a stalled platform, Christmas sales will determine fate

Can the Wii U turn it around this holiday?
Can the Wii U turn it around this holiday?
Nintendo

Nintendo announced the first quarter results for its 2014 fiscal year on Tuesday which revealed dismal sales of the Wii U. IHS Electronics and Media senior analyst Piers Harding-Rolls described the console as a stalled platform in an investor's note whose future will revolve around the coming holiday sales period.

"Wii U remained a 'stalled' platform during April to June with only 160,000 shipments," Harding wrote. "Even with this weak performance, IHS believes that Q4 performance of the Wii U will reveal much more about the long-term outlook for the platform compared to its most recent disappointing sales. That's because Wii U games set to be released in the second half of the year look far more robust and we expect Nintendo to spend much more heavily on marketing its new content for the platform over the coming months. Nintendo also experiences heavy seasonality in demand for its products - until we experience a strongly backed holiday sales season for the Wii U, long-term outlook is less clear."

The analyst goes on to predict that the Wii U will suffer a "significantly shorter sales cycle" compared to the PS4 and Xbox One if sales of the console and its games do not impress during the critical holiday sales period.

Nintendo currently has The Wonderful 101, Super Mario 3D World, The Legend of Zelda: The Wind Waker, Sonic: Lost World, Mario & Sonic Sochi 2014 Olympics, Donkey Kong Country Tropical Freeze, Wii Party U and Wii Fit U on the docket between September and December of this year. Pikmin 3 will release in August and will also be critical to the success of the Wii U.

Harding also adds that Nintendo is focusing on more R&D investment for the Wii U in order to produce more games for the platform.

As for digital sales, Harding acknowledges Nintendo's progress in the area but notes that it still has a long way to go to catch up to Sony and Microsoft. While the PS3 and Xbox 360 are taking in billions of dollar in revenue via digital content sales, he estimates that Nintendo did a little under $250 million in 2012.

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