--EDIT--
This article is not meant to attack Nintendo or the Wii U, nor is it meant to defend them or the Wii U. The purpose is simply to inform the reader and provoke us to thought about their newest system and their current market condition.
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Nintendo.

While it certainly means different things to all of us --Zelda and Mario to me, and Metroid or Pokemon to others-- these days that name evokes reactions that fall into one of two very passionate categories: extremly positive, or extremely negative, there is little --if any-- middle ground. The reasons are numerous, but their approach to game console design is the main reason.

Love it or hate it, there's no denying that the Wii U's design is a bold step in console design. Bear in mind however that "bold" isn't synonymous with "good", and what is good is a matter of personal opinion when it comes to entertainment. However, determining whether the Wii U (or Wii for that matter) is a good system is not the intention of this article, it's purpose is to determine where Nintendo stands in the Game industry, or more specifically, the console/handheld business, and why they are there, as well as what their next move should be, because like it or not Nintendo is struggling in a very very bad way.

So to get to the bottom of this I decided to not only research professional and amateur articles as well as press releases from Nintendo's recent investor conference and sales reports, but also to interview some people I know personally who have great insight into the game industry, programming, and/or business and obtain feedback from them as individuals whose opinions bear more credibility than the average gamer, be they fans or haters of Nintendo.


And so without further ado, we shall now dig into the available details of Nintendo's current situation and see what we can conclude.



Starting With News Straight From The Horse...err...CEO's Mouth

As already stated in a recent article I wrote, Satoru Iwata said not too long ago that Nintendo realized and admitted that they had made a mistake with the Wii U, that they failed to realize what the gamer community wanted and that they had fallen behind the times. He also stated that Nintendo was working on a new console, seeming to imply that they would learn from their mistakes in the next round of consoles. Finally, it was reported that Iwata also claimed that the next Nintendo console would be more "on par" with the other modern consoles in both power and design, however to my knowledge this quote was never officially credited, thus leaving it's credibility in question.

Iwata say what?
This was likely the reaction of everyone who follows Nintendo related news after a recent meeting with investors where Iwata went on record as saying that the Wii U's failure to sell was not because Nintendo failed to make a quality product, as they received positive reports from gamers and critics alike.

Now the confusion this causes isn't so much a result of disagreeing with Iwata on whether the Wii U is a quality system or not, as it is the stark contrast between what he said not even a month ago, and what he's saying now. Last month the Wii U was a mistake (or they had made some mistakes with it, depending on how it's understood) and this month it's a great product and failure to make a proper product isn't the problem, you just don't know exactly what is?

Holy confusion, Batman! Who's more confused here, us, or Iwata? At this point, it isn't clear whether Iwata himself could answer that question. We'll keep you posted as this story unfolds...or not.


Initially however, Iwata stated that Nintendo's marketing was the reason the Wii U was failing, but he seems to have rethought the matter now given his statements referenced in the first paragraph of this subsection of the article; or did he rethink rethinking it in the statements mentioned in the second paragraph?

Asprin, anyone?


What The Media Is Saying

The Wii U sales fiasco has been discussed in so many different ways that this article will likely end up feeling like a repeat of several articles you've already seen on various websites, but it still bears repeating and rehashing if you're a big Nintendo fan or strong critic.

It's confusing
It is the argument of some that while Nintendo was obviously trying to piggyback off the Wii's success, they failed to realize that they went two very different directions with the sibling systems: while the Wii had an incredibly simple controller concept, the Wii U was confusing to gamers and developers alike. These claims further state that Nintendo themselves initially seemed unsure of how to utilize the hardware, and that given the array of controllerrs that were available for the system many new customers were unsure which ones they would even need in order to play their games.

When you need online articles to explain which controller you need, there is a problem.


It doesn't support the core gamer base
These arguments claim that while the Wii U has enjoyed a few "Mature" titles, those titles are too scarce to support the core gamers when they can get their games consistently on the PS4 or XBox One.


It's underpowered
Those arguing the lack of power note that even third party developers are saying that --despite being more powerful than the PS3 and XBox 360 in some ways-- the Wii U is indeed weaker than even their competitors' consoles from the previous generation overall. As a result, many third party developers are saying that the Wii U simply cannot handle current gen games, so releasing exclusives is not an option for many of them, much less porting.

And in the end, this has been a major problem for Nintendo since the N64 days: weaker systems. The Wii sold incredibly well, but only because of it's concept (the first entirely "motion controlled" console), it's specs were also weaker than it's competitors by far. It remains that Nintendo is making their systems too weak to keep up with modern games in each generation, and the Wii U has finally brought it to a point that it's no longer tolerable for most third party developers as their vision for gaming has grown considerably, and well beyond the system limitations of the Wii U.


What Third Party Developers Are Saying

In an interview that (to my knowledge) allowed annonimity, a "big name" thid party developer employee spoke up about the Wii U. According to him, the Wii U's main focus from the beginning seemed to be a small system size and low noise level, he even went as far as quoting Nintendo directly in a statement that declared low noise was what they were shooting for with the Wii U.

According to this particular person, the Gamepad was not to blame; in fact he stated that developers were initially quite excited about the idea of the gamepad, and were eager to try their hand at developing for it. The general idea seems to have been that the gamepad opened up a lot of possibilities, and even critics declared that Nintendo had the right idea with it, in enabling gaming remotely. However the programmer in this interview did criticize the gamepad's low specs, and bemoaned how lacking the entire system's functionality was for them.

This particular developer recounted the story of their one and only endeavor into developing for the Wii U, and stressed repeatedly how limited the system was. Their depiction was indeed a grim one, telling tales of how much content and detail had to be removed from the game before it could run, all the while blaming it on the system's intention of remaining silent while operating (minimal fan noise = minimal CPU exertion, and minimized game content and quality).

Further problems noted were Nintendo's lack of support for third party developers, and an extremely poor dev kit and inferior tools. The development proccess was reportedly an unecessarily long task that cost them too much time, and in turn, too much money. These factors all combined with poor system sales to end up causing them to lose money on their title, despite it's success.

for the full article, see http://www.eurogamer.net/articles/digitalfoundry-2014-secret-developers-wii-u-the-inside-story


What My Personal Contacts Are Saying

According to the people I contacted personally (no big names here, just people with some good insight given their experience in various aspects of the industry) who shall remain annonymous, the Wii U is lacking in a few big ways.

It's difficult to develop for
The complaint that first surfaced certainly echoed that of the annonymous developer mentioned earlier, and stated that the system was too limited and too unconventional. These statements suggested that porting from another system to the Wii U was too much of a pain to be worth the time and money, further noted was the fact that poor sales result in a lack of profits, and in some cases would result in losses.


Nintendo is out of touch with gaming
This seems to be the biggest complaint that I received when considering the opinions of a few different programmers and designers. Namely that Nintendo had become blinded by the glory that their name carries to see that their marketing, console design, and intenet capabilities are too far behind the times to turn it around for the Wii U.


Nintendo missed their own sales trends
This source specialized in marketing, and suggested that while the Wii sold like crazy, it moved far fewer games per owner than did the PS3. Their view on this was simple: the Wii sold because it sounded like a cool idea to people initially, but after getting it, the majority of customers only got one or two games and realized that the system wasn't what they had expected.

Another view this individual offered me was that the Wii moved so few games because the "non-gamers" were the ones who bought it because it was some seemingly new technology. This suggestion stated that since non-gamers bought into it so wildly, it posted extremely deceiving numbers, and lead Nintendo to believe they had amassed far more followers than they had, and that the Wii train was the way to go from now on. Indeed new tech always has a boom and then quickly dies down in popularity. Afterward only the core following remains. Bubbles are disasterous for business when not seen through.

The latter view seems to be something that Iwata has at the very least considered, given his comments earlier this year.


What Eirinn Is Saying

In the end I can't help but feel that all of these theories hold some amount of truth to them, barring Iwata's statement that it wasn't a fault with design. I shall now offer a bit of a breakdown in order to clarify my personal stance on it.


Iwata is trying to play it smart
I feel that Iwata meant his statement about the Wii U and Nintendo's failures, as well as learning from them. Lending credibility to this is Shigeru Miyamoto's statements that Nintendo plans to pave the way into a new era next generation, and that they plan to radically alter some of their characters to fit this change in technology for Nintendo.

As such I am of the opinion that Iwata was simply trying to appease disgruntled investors, claiming that Nintendo had not produced bad hardware or bad software as a desperate attempt to keep them from withdrawing their investments in stocks and sending Nintendo into even more of a downward spiral financially.


It isn't too confusing
Come on guys, stop discrediting us and assuming we're unintelligent. And most of all, Nintendo, please stop blaming the name Wii U for poor sales. Yes, it confused a lot of us at launch, but it's been nearly three years now: we know it's a new console, we're not stupid.

As for the controller mess, it is a bit offputting. Nintendo should have learned from the controller fiascos of the Atari systems, Genesis, and SNES: we don't want systems that make us switch between several controllers. Give us one controller that fits all games on the system. Additional controllers need to be scarce and optional.

Still that isn't enough to make the system sell this badly. It simply does not spark the interest of most modern gamers. We all love Nintendo's whimsical worlds and games, but we need more than just first party titles to convince us to buy early and for full price.


It really is underpowered
Graphics aren't nearly the big deal everyone is making them, but graphics aren't the issue here really, the issue is that the system simply cannot handle modern games made by most AAA companies. Nintendo has produced a machine that only they (and perhaps a few others) can really develop well for. That's where they're really suffering: third party support. If Nintendo could ever score third party support for the Wii U, it would go a long way toward helping salvage what's left of this generation. Sadly this won't be possibile without a complete overhaul, and then owners of the current Wii U model would have to buy the new one. Essentially that would be a new console, and a Wii U 2 would definitely be a flop at this point.


Nintendo is indeed out of touch with the market and gaming trends
Huge fad sales with the Wii made Nintendo think they had stumbled onto something huge and were again the king of the market. They failed to watch the real trends as well as the way that the gaming world was evolving. They even went as far as to say that they didn't play any other systems. That may sound like loyalty or confidence at first, but underneath lies the truth:

it's ignorance.

Now please note that I'm using the term "ignorance" in the strictest sense. Literally what I'm saying is that if Nintendo is not following their competitors, they have no idea what other companies are doing, nor do they have any idea what the market is doing or what the gamers want or expect. A company that's too blind to do their research is a company that will die, and they will die very soon.

Seriously, who runs a race with their eyes closed?


Long overdue praise
I've spent the last few years busting Nintendo constantly for poor design and even worse business management (seriously, it feels like Iwata throws darts at a board to determine what Nintendo should do next), but in the end I have to admit that Nintendo knows things about making games that no other company seems to know, and even someone with a watch on gaming and design like I try to have cannot dissect it. I can only conclude that these people are idiots about console design (just kidding) while being absolute geniuses with their software.

Seriously, Nintendo simply cannot be beaten at what they do game wise. So while other companies may put out games that are better than some Nintendo games, nobody in the industry can beat Nintendo on their own turf. Nobody.

And in recent months I've begun to realize that Nintendo may have actually had a good idea with that annoying little gamepad, though it's executed poorly. And it's entirely possible that Nintendo has stumbled onto a wave of the future of gaming with the gamepad, but if so it's ahead of it's time, and that isn't a good thing. Things that are ahead of their time die because the people don't want or understand it yet (Iwata himself stated that people didn't understand the true value of the Wii U's design). There's a fine line to tread with innovation, and developers must know what is a good idea and will be accepted at this point in time.


Conclusion
Is the Wii U a good or bad idea? I can't say yet. Allow me some hands on time with one and I'll decide then. For now I can only say that Nintendo needs to ditch the gamepad idea and embrace more normality and far more powerful specs in this upcoming generation. Indeed I can say with certainty that the Wii U's specs are it's downfall more than any other thing, and if that isn't addressed, Nintendo will be history in the console business very soon.



A final note that may show us something of importance for Nintendo is that --barring the Wii-- Nintendo consoles have been on the decline in populaity since day one...or two rather. Here are some startling statistics I found:
NES - 60,000,000 (sixty million) sold
SNES - 50,000,000 (fifty million) sold
N64 - 30,000,000 (thirty million) sold
GameCube - 20,000,000 (twenty million) sold
This is a deadly trend for Nintendo and seems to suggest that this has been a long time coming. Can they kick out of this death spiral that's been over twenty years in the making? I for one hope so. I don't want to think of a console industry without Nintendo producing their own systems.


So who and what really is to blame for the Wii U's failure so far? Will it ever turn around? What should Nintendo do with it's next console (key changes)? Will Nintendo have to bow out of the console (not handheld) business over the next couple of generations? Please, post your thoughts below.

Good article.

Here is why I haven't bought a Wii U, despite owning most Nintendo consoles.

1. Money. There was a time you could get two systems with 400 dollars. Now, to get two, you need 600 or 700 depending on sales. The Wii U is the cheapest of the consoles, but...

2. Doesn't appeal to core gamers. The PS4 gives me not only the core games I want, but had the third party games Nintendo can't provide on an underpowered machine. I love Nintendo, but if the voice was a PS3 or Wii U, I'd still be having trouble choosing one.

3. Too much reliance on couch multiplayer. Almost all the top games that Nintendo has released lately, like Smash, Mario Kart, etc, can be played alone, but are most fun when you have friends. I do not, so I miss out on their games at their best.

In short, Nintendo doesn't appeal to my demographic. And my demographic is very common now. 15-30 year old males.

legacyme3 : Thank you. Also, I agree with all of your points. The biggest to me are money (as I will indeed get one eventually, once I can afford it), and the multiplayer aspect. I love multiplayer and I think it's great that Nintendo can appreciate the value of it, but I literally have no one to local multiplay with, so when that's the main factor in a game I miss out on the fun.

Also the fact that the prices are so high leaves me waiting even longer because I will be buying a PS4 first. The Wii U has no means of contending for my first purchase when it offers so few games for hardcore gamers, and no third party support.



endings : Agreed. The third party support is a huge factor for me as well, much like I said to legacyme3. Nintendo makes some of the best games around, no doubt; still they're the only ones making games for the Wii U really, so I have little incentive to pay a high price for it when I'll miss out on most of the games meant for the "core gamers" like me. For that reason I won't be getting one until after I get a PS4 and a few games for it.

Eirinn : If you have not realized this already, then realize it now. Nintendo has been in the gaming life for decades. Ever since sony started releasing games, it slowly is killing nintendo, the game development that started many great games and video games that exceeded the limits of Atari. Think of nintendo as julius caesar and that every system from sony or another game making company are the daggers that stab into nintendo that will eventually kill nintendo. The company wishes to live, they are trying their best to keep going.

bananaeater99 : Well I can't disagree with you at all, but I don't think Nintendo is destined for failure. They can save themselves if they get their head in the game and quit pretending they don't need to change their outdated approaches.

What they need to do is either replace their hardware designers or hire in a GOOD outside company to help develop the next one. If they make a system that's actually powerful for it's time and appealed to the gamers in it's design, they could easily get back in the game as a serious contender. They seem to value small system size above power, and that's a shame. Power = Third party support = more games for all gamers = more sales. Sadly I'm not sure Nintendo will ever realize this. They think Mario, Smash, and Zelda are enough to support them. Nintendo seems to want mostly first party titles on their systems, and that just won't do it for them.