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This article will not fix Nintendo.
But the Japanese gaming giant has a big, obvious problem on its hands: The GamePad controller bundled with the Wii U. The GamePad was supposed to be a second-screen experience that would extend game play beyond the TV and, through its “Off-TV Play” feature, make it possible for Wii U owners to keep gaming even when someone else needed the first screen. The hybrid tablet-controller was supposed to sell the Wii U the way motion controls and Wii Sports sold the Wii.
The gimmick failed, with only 2.41 million Wii Us sold worldwide in the past nine months. Meanwhile, Microsoft and Sony sold three million Xbox Ones and four million PlayStation 4s, just in the last quarter.
On top of that, Nintendo has failed to find compelling uses for its own hardware. One of Nintendo’s upcoming flagship titles, Donkey Kong Country: Tropical Freeze, reportedly abandons it altogether.
And yet the company refuses to back down from its support of the GamePad. In an investor briefing last week, president Satoru Iwata hailed the GamePad as the Wii U’s “most significant feature.”
In a follow-up Q&A with investors, Iwata shed some light on why Off-TV Play was deemed to be so crucial, rather than a feature for a console accessory.
“We developed Wii U in an attempt to change the way people play with a video game system on TV,” Iwata said. “Traditionally, the players needed to be in front of a TV in order to play a home console, meaning that it was impossible to play when others were watching TV. Under these conditions, especially in Japan, handheld game devices increased their share and the home console market became smaller.”
“The type of competition that exists in most industries requires one to respond to known needs of the consumers that consumers themselves are aware of, which, however is not the case in the entertainment industry,” Iwata later added. “Entertainment flourishes when consumers are faced with something that they did not know that they wanted.”
That was certainly true of the first Wii, a trend-defying (and later trend-setting) console that has sold more than 100 million units worldwide. IHS analyst Piers Harding-Rolls said Nintendo wants to be seen as a constant innovator, even at the expense of safer bets that could improve its outlook.
“Unfortunately, this reliance on innovation — following its own path — is risky and doesn’t always work out, but it also lays the potential for Nintendo to produce something that really transforms its business with fantastic upside,” Harding-Rolls said. “Hence, Nintendo’s decision to double down on its current path for the Wii U and concentrate on communicating the innovation of the GamePad, with purpose-built Nintendo software.”
Ironically, one of the brightest glimmers of hope for the GamePad comes from the past, not the future. Nintendo is planning to bring touchscreen games from its more successful line of DS handhelds to the Wii U’s digital games store, to be played on the GamePad screen.
In the investor Q&A, Iwata said the development teams for its consoles and handhelds, previously separate, are now together under senior managing director Genyo Takeda. The things Nintendo has learned from the integration, he added, will ease the transition to the company’s next console after the Wii U.
“It of course does not mean that we are going to use exactly the same architecture as Wii U, but we are going to create a system that can absorb the Wii U architecture adequately,” Iwata said. “When this happens, home consoles and handheld devices will no longer be completely different, and they will become like brothers in a family of systems.”
Update: An earlier version of this article misstated the time frame for Nintendo’s most recent Wii U sales. That has now been fixed.
This article originally appeared on Recode.net.
