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Nintendo Announced A New Console For 2012 -- Are They Making Up Lost Profit, Or Leading The Gaming Industry?

Nikole
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Posted April 25, 2011 - By Nikole Zivalich

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Nintendo announced they will launch a new console as soon as next year the same day it was confirmed they hit their seven-year low in profits. The lull in earnings has been credited to stiff video game competition from Sony and Microsoft. The tragic earthquakes that have recently hit Japan can also be credited to the dip in profits. Nintendo has denied that the earthquakes plaguing Japan would not directly affect production but there would be "an indirect impact from individual consumption patterns." Was Nintendo's current financial state the reason they decided to announce their next console?

In a financial report released by Nintendo it was revealed their net profit for 2010 dropped 66% from 2009. Nintendo's current console, the Wii, enjoyed the top spot in the console war for the majority of the past four years. Since its launch in 2006 Nintendo has sold 86.01 million Wiis. Sales have been on a steady decline since 2009 when it sold 20 million units. In 2010 it was down an additional 5 million at 15.1 million units sold.

Sales for the Nintendo 3DS have topped 3.61 million units sold world-wide. This was Nintendo's latest handheld console which allowed gamers to play games in 3D without wearing special glasses. The console was released in America on March 27 of this year, and in Japan on February 26. In a statement Nintendo called the 3DS' release a "smooth start," despite not meeting their goals. For 2012 (the fiscal year) Nintendo projects they will sell 16 million units. The DS console, their previous handheld model, sold 27.1 million units in 2009.

Nintendo hopes to make-up for lost sales and declining profit with a new console. Before today's announcement rumors of a HD console or the "Wii 2" captivated the internet. The rumored console was codenamed "Project Cafe," and while the new console is no longer a rumor, what it will end up being is a mystery. Despite not being confirmed, many agree this console will be able to display HD graphics, a feature the Wii lacked and was often mocked for. Another feature the Wii lacked was online gaming. The Wii does allow connection to the internet but the lack on an online hub and the use of friend codes often detoured gamers from exploring what the Wii offered. Of course, these are all speculative at this time.

There has been about six years in between each major Nintendo console since the 80s and about a year in between handheld models, so Nintendo's new console is right on schedule: The Wii came out in the fall of 2006, and assuming the next console comes out in fall 2012, it will be six years in between consoles. The Nintendo Entertainment System was released in 1983, in 1989 they released the Game Boy handheld console. The first Nintendo console cycle took place when the SNES was released in Japan in 1990. It was released in America the following year. The handheld console cycle began as Nintendo released the Game Boy Pocket in 1996. The years progressed, as did the amount of consoles. After the SNES (1990), there was the N64 (1996), the Game Cube (2001) and the Wii (2006). Once the Game Boy Pocket (1996) was released, there was the Game Boy Light (1998), which was only released in Japan, then the Game Boy Color (1998), the Game Boy Advance (2001), Game Boy Advance SP (2003), the Nintendo DS (2004), Game Boy Micro (2005), Nintendo DS Lite (2006), Nintendo DSi (2008), Nintendo DSi XL (2009), and lastly the Nintendo 3DS (2011).

While a late 2012 release date may be within Nintendo's console cycle it is not in the projected cycle for the current generation of video games. Industry analysts, like Michael Patcher, believe this current console cycle will last into 2013. Just this past week "an inside source" told Kotaku both Sony and Microsoft were preparing to launch their next console in 2014.  They are even allegedly communicating with each other about delaying the next generations as long as possible. If this proves to be true Nintendo will launch their console two years before the competition. Nintendo will be free to promote their new console and shop it around to third-party developers years before Sony and Microsoft will be able to do the same.

The many questions we have about Nintendo's next console will be answered when it is playable at this year's E3, which takes place in Los Angeles on June 7-9. Nintendo didn't clarify if the console would be playable to the public or if there would be game available for it. Even if the console is only playable behind closed doors it must be well into development. G4 will be covering every second of E3 so stay tuned for all the details. 

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