With Black Friday weekend on the books, Nintendo just announced that its new Wii U console is sold out at retail. According to the company, it has sold approximately 400,000 units over the past week.
North American President Reggie Fils-Aime had this to say:
“Wii U is essentially sold out of retail and we are doing our best to continually replenish stock. Retailers are also doing their best to get the product to store shelves. But as soon as product hits retail, they’re selling out immediately.”
Anyone who follows gaming knows that managed scarcity can play a roll in shaping perceptions about how a piece of hardware is doing in the market, particularly in the first few weeks of a device’s life. While I can’t say for sure if Nintendo is actually restricting inventory with the Wii U, I do know the iconic gaming company absolutely must have a successful launch with its new console. And in order to do so it needs to show strong demand now.
To be clear, I think there is real demand for the Wii U, particularly since there has not been a new console in six years. But my sense is that the bulk of the initial demand for the Wii U is from core gamers pining for a new console and not necessarily a broader consumer base.
Let’s not forget how the Wii U’s predecessor, the Wii, truly crossed over into the mainstream consciousness as a must-have device. It was for good reason too, as the motion-sensing controllers and focus on simple gaming was a huge breath of fresh air in a market overly focused on impressing core gamers with first-person shooter games like Halo.
But as Nick Wingfield writes in the New York Times, the gaming market today is vastly different than it was in 2006. We live in a world filled with iOS and app stores, and some of the gaming dollars that used to go to Nintendo now fill the coffers of Apple, Amazon, and others.
I wrote about Nintendo’s challenges in this new era in 2010, and while the 3DS is actually selling better than some had expected, it isn’t hitting what the DS did in the same span, even after the company cut the price on the handheld soon after launch.
The price drop proved that Nintendo watches performance closely early in a cycle, and it will do what it can to spur sales, including tweaking pricing as well as managing availability. While the Wii U will no doubt do well this Christmas, longer term Nintendo (as well as Microsoft and Sony) have to be worried about the changing nature of the gaming market. In other words, the consoles now share the living room – and gaming dollars – with tablets, smartphones, and even smart TVs.
As Atari founder Nolan Bushnell said in the New York Times on Monday, Nintendo’s new console “feels like the end of an era to me.”