A year ago, Nintendo was on the brink. Now it’s back, and here’s why
Nintendo has reported operating losses for three consecutive fiscal years, and the Wii U is considered the least successful Nintendo console ever, going all the way back to the original NES. But Nintendo’s toys-to-life amiibo figures could be the key to revitalizing the company.
The toy figurines, which contain near field communication (NFC) technology that unlocks special characters and abilities across multiple Wii U and new Nintendo 3DS XL games, have been selling out since launching in November 2014. Nintendo sold over 5.7 million amiibo worldwide in just two months last year. And the company has sold over 3.5 million of the video game figurines in the U.S. alone.
Nintendo has sold just over 9.2 million Wii Us globally since its launch in 2012 through January 2015, and the console still lags a distant third to Sony’s 21 million PlayStation 4 and Microsoft’s 13 million Xbox One sales. Nintendo’s previous console, the Wii, sold over 101 million units between 2006 and 2014, which earned the company first place during that console cycle.
But since releasing the amiibo figures last November, Nintendo has seen an uptick in Wii U console sales in the U.S., including a 10 percent rise in Wii U hardware sales last November and a 29 percent increase for 2014 as a whole, compared to 2013. That trend has continued into 2015 with a 20 percent increase through the first quarter, according to the NPD Group.
Wedbush Securities analyst Michael Pachter believes sales of amiibo toys could add $200 to $300 million in annual revenue to Nintendo’s bottom line. Right now, the toys are more collectible than a hardware driver. But Pachter says that as more games incorporate the technology, the appeal will grow, especially with the younger gamers who have driven sales of the similar toys toys-to-life franchises of Disney’s Disney Infinity and Activision’s Skylanders.
“People already have an affinity for our characters, and they love seeing them come to life in different ways in different Nintendo games,” Scott Moffitt, EVP of Sales and Marketing for Nintendo of America, says. “And parents like that amiibo can be used in different ways across multiple games, so they get strong enduring value for their investment.”
Nintendo has rolled out three waves of amiibo figures so far, a total of 29 characters from Mario to Donkey Kong to Sonic the Hedgehog. A shortage of amiibo figures has resulted in some fans paying hundreds of dollars for the hard-to-find collectibles, which retail for $13.
Nintendo has also opened up this technology to developers. Moffitt sees amiibo figures as another creative option in the development toolbox, just like motion controls, off-TV play, or 3D visuals.
Nintendo has already announced its next console, the Nintendo NX device, which EEDAR video game analyst Kyle Lemmon believes is a tacit admission that the Wii U continues to underperform and won’t have the long shelf life that the Wii had last generation. But Nintendo does have new waves of amiibo figures coming out throughout this year, and for now, that’s enough to keep fans excited about the company once again.