Nintendo says they’re working on new hardware, and that they are actually already working on new hardware in most cases immediately after they’ve released the most current version. There appears to be no let up in Nintendo’s aspirations to release new hardware, which seems a bit surprising considering how disastrous their Wii U sales have been. Back in January, Nintendo was forced to cut their full year projections for the Nintendo Wii U by over 70%, which made a lot of investors lose faith in Nintendo’s business plan. However, Nintendo continues to move forward even though they posted a loss of $225 million for the full fiscal year of 2013 (ended March 2014).
The problem with this is that it overlooks Nintendo’s fundamental weakness that some of their competitors have overcome. They refuse to allow their vast library of characters and properties to be licensed out to platforms outside of Nintendo’s own hardware platforms. After all, if Nintendo is so convinced that the game experience is superior on their hardware they should have no issue allowing their games to move to other platforms. But that simply isn’t the case, as indicated by Nintendo’s recent request to pull a Nintendo Gameboy emulator from Apple’s appstore. If you look at one of Nintendo’s historic competitors, Sega, they had posted a profit of $300 million and they don’t even have any hardware business to sell to consumers.
Nintendo can and should update their console to be competitive (or better than) the Xbox One and PlayStation 4 and they should find ways to keep their portable consoles relevant in the era of smartphones and tablets. But at the same time, they need to embrace iPhone and Android users that are going to want to play their games on their phones and tablets. Nintendo quite literally has a potential market of almost billions of people if they actually open their eyes to the possibilities. Nintendo did really well with the Wii, but they fell flat on their faces with the Wii U and anyone watching from afar could have (and probably did) call it. Nintendo is not a bad company, and they’re not poorly run, but they really need to remember what their core business is, and it isn’t selling hardware. I’m a huge hardware geek, and I actually hate to see companies go software only but the truth is that Nintendo doesn’t need to get rid of their own hardware, they just have to support other platforms.