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OceanJackson (80.11)

Wii U Sales Data - Some Good News For Nintendo

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December 22, 2012 – Comments (10) | RELATED TICKERS: NTDOY , MSFT , SNE

In my last Nintendo (PINK:NTDOY) post I highlighted recent lowlights for the Japanese gaming giant. Nintendo shares hit a fresh 52 Week low yesterday in the U.S., just a month into the launch of their brand-new Wii U gaming console.  It appears investors are convinced Nintendo's future looks bleak. 

But recent sales data says otherwise.  Let's take a look at the Wii U's sales figures to date, and to give them context, we'll compare them to the last console generation's launch figures.  

Wii U sales compared to the last console generation's launch figures Microsoft's (NASDAQ:MSFT) XBox 360, Sony's (NYSE:SNE) Playstation 3, and Nintendo's Wii:


4 Weeks Wii U USA Sales, launch date Nov. 18: 
 - WiiU: 849,068
 - Wii: 864,647
 - PS3: 378,603
 - X360: 477,303

So, the WiiU did 98% of the Wii, 224% of the PS3 and 178% of the X360. Looks excellent.

3 Weeks Wii U Europe Sales, launch date Nov. 30:
 - WiiU: 340,310
 - Wii: 618,450
 - PS3: 691,843
 - X360: 403,037

So the WiiU in Europe did 55% of the Wii, 49% PS3 and 84% X360. Bad here.

2 Weeks Wii U Japan Sales, launch date Dec 8th:
 - Wii U: 437,390
 - Wii: 460,235
 - PS3: 130,335
 - X360: 65,430

In japan we have 95% Wii, 335% PS3 and 668% X360.

4 Weeks Worldwide Comparison:
Keep in mind, the consoles didn't launch worldwide at the same time, so this is skewed. The comparison works against the Wii though, it was also launched in different regions in sequential weeks.

 - WiiU: 1,817,166
 - Wii: 2,071,242
 - PS3: 524,687
 - X360: 948,162

That's  88% Wii, 346% PS3, 192% X360.  Pretty decent.

The takeaway is despite negative publicity, the Wii U launch is off to a good, if not great start.  The Wii was a phenomenon.  For the Wii U to do 88% of the Wii's numbers, despite costing $100 more, is nothing short of impressive. 

I won't post Nintendo's 3DS console sales numbers here, but it is outpacing the sales numbers of the best selling console in history currently - the DS. 

Now consider that Nintendo's two current machines both have revamped E-Shops, and they are now selling far more games digitally as downloads than they do physical discs at retail.  Those digital sales don't get reported as analysts don't have access to them - there's no retailer middle-man.  

Given this it's hard to see NTDOY shares as anything but severely undervalued.  But the world at large is convinced the Video-Game industry is in decline, Nintendo is a "show-me" stock.  Nintendo reports on January 21st, the above is a preview of what I think they'll show the world in a few weeks.

Nintendo looks to be a strong buy. 

10 Comments – Post Your Own

#1) On December 23, 2012 at 6:20 PM, OceanJackson (80.11) wrote:

An update to the above:

Nintendo's newest hand-held console, the 3DS, was launched week ending Feb 26, 2011.  There are 95 weeks of sales data available.  To date, it's sold 25,243,576 units, or 265,722 per week.

It's predecessor - the DS, which is now the best selling dedicated gaming console in history, over its first 95 weeks, sold - 25,108,337 units or 264,298 per week.

These are the facts to back up my above claim that the mobile, handheld 3DS after nearly 2 years, is still outpacing the sales of its predecessor.

Now - tell me, how can you explain this, how can this be true, if the widespread assumption that iOS and Android mobile devices (which there are orders of magnitude more of than dedicated handheld gaming consoles), are slowly but surely killing the gaming console market?

The simple truth is - it's not at all.  It's all just a big illusion, in our short-sighted obsession with iPhones, Apple, and Google.

Now - consider this last fact.  The Nintendo DS was released week ending November 27th, 2004.  Do you know what there weren't any of in 2004:  Smart Phones or Tablets.

And the 3DS is still outpacing the DS in sales.  The comparison is fair - especially now, since we can now say that the 3DS has had 2 Christmas Holiday sales seasons under its belt, as the DS did over its first 95 weeks. 

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#2) On December 27, 2012 at 7:31 AM, brykeswick (< 20) wrote:

Nintendo will be reporting a negative profit for the first time in its history since flotation, according to the Japanese media. Of course they have the cash surplus to handle it perfectly fine, but I suspect the gloom in the market is reasoned (but still oversold). They have confirmed that each 3DS too loses them money at the current price point (as Wii U does). Perfectly recoverable long term, but you know how the market is.

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#3) On December 27, 2012 at 12:02 PM, OceanJackson (80.11) wrote:

Thanks for the reply: 

I'm a bit confused as to your point of the 3DS being sold at a loss - here are (just) 3 reports I found noting it began turning a profit around September 2012 

1 

2 

3 

But yes, the Wii U is being sold for a loss.  

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#4) On December 27, 2012 at 3:16 PM, BioBat (30.50) wrote:

The sales number comparisons are misleading. the demand for Wii U is low. I can go into any local Target or Walmart and get a Wii U today, heck I can get one below MRSP on eBay. Neither was true for the Wii or Xbox 360 anytime in the first year of release. 

I expect 6 months from now nobody ( not actually zero sales but a very sharp drop off) will be buying Wii U and that will result in more doom and gloom for Nintendos stock. 

The 3DS may be selling for a profit now but it sold below cost for months. It's been pretty well documented in the financial space. 

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#5) On December 27, 2012 at 6:13 PM, OceanJackson (80.11) wrote:

I agree supply is greater than demand.  But that doesn't mean demand is low.  

Nintendo has gone on record to say that more Wii U's would be available than Wii's, and since the Wii U is not as popular as the Wii, this explains the surplus on shelves.

But 1.8 million consoles in 4 weeks is very strong, is it not? 

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#6) On December 28, 2012 at 2:20 AM, Shiranai85 (< 20) wrote:

Ok so first off I won't claim to be a stock or financial whiz as I am anything but. I have no experience in the field. I just signed up to offer a different type of perspective here. I have followed the industry inside and out since I was in elementary school I currently work in retail videogame retail specifically. At least for the individual store I work in there have been what can only be explained as roller coaster high's and lows for the systems sales. From the date of Nintendo announcing the Wii U We sold out of all of our preorders within about 48 hours. What isn't mentioned however is how many we had available to begin with. We are given a cap to our preorder count as we were unsure how many Wii U would be available at launch until Nintendo provided the numbers. Something they were incredibly hesitant to do until mere days before release. Though we "sold out" quite quickly long before the system even released. The pre order limit was extremely small I think it was something like 15 preorders for the deluxe and 20 for the standard. Then the gaming press and community got a hold of it. Mere days before release quite a few of the initial preorders were cancelled.

On launch day we didn't even run out of Wii U's. We did the next day and maybe once or twice after that. For I would say the first week and a half it sold pretty well. Then out of nowhere it barely sold at all. Fast forward to the day after Christmas. I probably personally helped about 300 or so people. 2 of them bought a Wii U. 5 of them returned it. None of the returns were because of a duplicate gift purchase.

Again I won't pretend to be a financial expert but as someone who immerses himself in anything to do with the industry on a daily basis. I do feel in my gut that Nintendo is in some serious trouble (in the console department) They still sale more handhelds than the PSP and PS Vita combined. I will admit my racehorse is definitely that of the Playstation brand but unfortunately I would have to say that speaking from first, 2nd and 3rd person experience. ALL OF THE BIG 3 Are in trouble. Though the news may change on a specific day as to who screwed over who or what studio closed they really need to stop worrying about the next system and start focusing on keeping their customers. I love the gaming industry but I don't know that at least in my lifetime (27 now) I have EVER seen it in as much trouble as it is now. Nintendo is providing vaguely worded sometimes downright false information, Sony insists on insanely unorthodox security measures punishing the majority of their players because of what a few people did, and Microsoft STILL can't make proper videogame hardware.  

The Wii U is in trouble it sold like crazy in its first week and now I would say I see a 3:1 ratio in returns vs sales. Again though I am not a financial expert of any kind.

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#7) On December 28, 2012 at 2:26 AM, Shiranai85 (< 20) wrote:

a correction when I say that Microsoft cannot make proper videogame hardware I am talking about its durability. I see more broken 360's than all of the other systems combined. Though I do see less broken slims than the older systems it isn't enough to call it a real improvement of any kind.

Add to this the fact that I kind of forgot to mention my main point in all of that >< All sales data any analyst has on these Wii U numbers. Does this take returns into account? Because I have seen the same Wii U's be sold and returned over and over again. Does this count as one sale? Or is each individual Wii U being sold added to the tally. I know its the same box because I recognize like a dent or crease or fold on a specific side of it or something like that or the serial number looks familiar.

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#8) On December 28, 2012 at 10:35 PM, OceanJackson (80.11) wrote:

Interesting first-hand account of a retail sales experience with the Wii U. Thanks for posting. What in your experience is the main reason buyers are returning the console?

I don't know how returns are factored into the sales numbers, good question.  I would assume they do get factored in.

 

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#9) On January 02, 2013 at 12:19 PM, BioBat (30.50) wrote:

Sales data suggesting the "nobody will be buying a Wii U in 6 months" point is a valid one.

 http://www.minyanville.com/sectors/technology/articles/Is-the-Wii-U2527s-Weak-Holiday/1/2/2013/id/47046 

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#10) On January 03, 2013 at 9:44 PM, OceanJackson (80.11) wrote:

I have to say that the doom and gloom predictions for the Wii U are just noise.

How are handheld 3DS consoles outpacing DS sales in this age of iOS Smartphone & Tablet casual gaming, after 95 weeks, if that's a real threat to dedicated gaming consoles?  

No one has provided an answer to that.  And that is THE single question and fact that must be accounted for.

Second, it's a little boggling to me to claim weak Wii U sales, when you see it's drastically outperformed the launches of both the XBox 360 & PS3, and is currently selling about 80% of Wii's numbers.

2.2 Million Wii U's sold in 5 weeks - is good.

Just because you see consoles on shelves doesn't mean demand is low. Nintendo is providing ample supply, and perhaps more than even a pretty high-demand.

Has that possibility been considered?  Look at the bottom-line sales and put them in the correct context. 

 

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