Pachter: Nintendo Should “Consider Getting Out of the Wii U Business”

Analyst Michael Pachter believes Nintendo should go back to the drawing board and takes its games multiplatform “until they release a new console.”

Nintendo had to admit to some rough truths today, substantially reducing its sales projections for both the Wii U and 3DS for fiscal year 2013. In light of this development many came out with opinions regarding Nintendo’s course forward and the steps it needs to take to salvage what increasingly appears to be a hopeless Wii U. Among them was analyst Michael Pachter who suggested that Nintendo’s software might do better if it were released from the constraints of its poorly selling hardware. “Nintendo software is still great,” he said in a Tweet. “However, if [software] remains proprietary, sales are limited when they sell fewer [hardware] units.”

While it would be easy to take this as Pachter suggesting Nintendo abandon hardware altogether, he would suggest a more moderate approach for the company. “I don’t think Nintendo should exit the hardware business at all,” he said. “Rather, I think they should consider getting out of the Wii U business, and consider going back to the drawing board on consoles. They have a console in the marketplace that isn’t working, and if they continue to tilt at windmills, their software sales will suffer.”

That being the case, he does believe some short-term multiplatform actions might be a prudent move on the company’s part. “Obviously, If they discontinue the Wii U, they will sell no console software,” he said. “I think they should reconsider going multiplatform until they release a new console, then they can pull all of their software from the PS4 and Xbox One, and go back to being a proprietary software maker.”

In the case of the 3DS’s failure to meet expectations, things are “more complicated.” According to Pachter, the rise of mobile and tablet games has damaged Nintendo’s dominance of portable gaming in a way “they will have trouble getting back.” In turn, he thinks the company should embrace the new mobile market by “Placing GBA games on those platforms for paid download ($4.99 – 9.99) and developing a broader audience.” Newly hooked Nintendo fans could, in turn, be convinced to “buy a 3DS and more expensive games.”

In the least, Nintendo’s recent bad news is making it clearer and clearer that the company can’t continue on in the fashion it has been. While the rampant success of the Wii has given it some definite leeway, it’s still a business and can’t enjoy these sorts of failures. What remains to be seen is where it tries to go from here and, in turn, where it winds up as a result. Maybe it will follow suggestions from people like Michael Pachter. Looking at Nintendo’s recent history though, we can see it trying a solution all its own.