Wii U less powerful than Xbox360 and PS3?

Nintendo’s next generation console, the Wii U, may not even be on par with the hardware power of the company’s current-gen competitors, the Xbox360 and the PS3, according to some developers. In the meantime, president of Gearbox Software, Randy Pitchford, has praised the Wii U as “a really nice bridge to the next generation.” The four anonymous developers critical of the system are said to have access to development kits and have spoken anonymously to GamesIndustry.

"No, it's not up to the same level as the PS3 or the 360. (…) The graphics are just not as powerful."(…) "Yeah, that's true. It doesn't produce graphics as well as the PS3 or the 360. (…) There aren't as many shaders, it's not as capable. Sure, some things are better, mostly as a result of it being a more modern design. But overall the Wii U just can't quite keep up."

Two other sources questioned whether the Wii U’s tablet controller would be the big innovation Nintendo is hoping it will be and whether a combination of PS3 and PlayStation Vita may not be the better choice, offering a similar hardware setup.

"You can do everything with that combo that you can with the Wii U, and more." (…) "The whole thing about the tablet controller is that you only get one of them, and you can only use one and it's not completely independent. (…) The base console has to be on, and you have to be in range. (…) Other controllers are just Wiimotes, or other Wii controllers. They may change the form factor or looks a bit, but it's the same controller."

Randy Pitchford, president of Gearbox Software, praised the platform in an interview with Joystiq. After all, his studio is developing ´Aliens: Colonial Marines´ for the Wii U.

"I think it's a great platform and I'm really excited about it, particularly with this game, there's a lot of exciting opportunities like, 'Wow, my motion tracker is there, and I can move it like this!' (…) There's just so much cool stuff. (…) There's a lot that we can do with that screen (…) It's a really cool system -- it's pretty powerful. I want to be careful, because I don't want to risk any sensitive information that Nintendo's not ready to share yet, but in our experience it's a great system. I think it's a really nice bridge to the next generation.”

It is interesting to note that he refused to call the Wii U a next generation system. This may tie in with the anonymous comments above. However, Pitchford seemed to suggest that Nintendo had yet to announce what the Wii U is capable of and repeated that point.

"Nintendo still has a lot to announce with their platform, and it's not up to us to go ahead of them. (…) I think people will be surprised. I don't know off the top of my head how many of the specs they've released, so I want to be very careful not to jump the gun, but we're very pleased with the hardware. And even since they gave us our first alpha kit, our very first 'pre-prototype' development hardware that they kind of let us play around with, they've done so many things to make the platform better. So it's getting better for us as developers."

These comments are reminiscent of the Wii’s long-rumoured last secret, a surprising feature the Wii was supposed to possess. However, no such secret ever materialised. The rumours were either wrong or the last secret was canned at the last minute, similarly to the Gamecube’s proprietary 3D-screen.

So, will the Wii U outshine Xbox360 and PS3 or not? Remember that I was able to bring you the exclusive news that the Wii would be significantly underpowered compared to the competition. And already with the Gamecube from the previous hardware generation, Nintendo seemed to have withdrawn from the race for hardware power, leaving the most powerful console to Microsoft and its Xbox. But, in my mind, no console has ever offered less power than the previous generation and such a scenario is hardly likely. Xbox360 and PS3 are six years old and the bill of materials for their hardware components must have come down to less than $100. So can we not assume that the Wii U must be a more powerful machine? Is it not obvious? The first Wii U hands-on impressions seemed to suggest so.

The answer may lie in the console’s tablet controller and pricing. The tablet controller may turn out to be the most expensive component and Nintendo may again aim for a low price point. In fact, I was able to reveal that Nintendo considered selling the Wii for a mere $100, a fact that was later confirmed by Miyamoto himself. Should Nintendo really want to implement such a strategy with the Wii U, the hardware could only be a small step up from the Wii. Technologies like cloud gaming may become a threat in the future and other devices such as smartphones and tablets are said to be already eating into the market share of traditional consoles. Overstated as this point may be, the GamesIndustry article points out that the retail market for console hardware and software has fallen by eight percent last year in both the US and Japan. So Nintendo may be well advised to launch the Wii U at a bargain price.

Or does Nintendo simply believe that Microsoft and Sony will not be able to release new consoles before 2014 at the earliest? This strategy appears riskier, but there is certainly reason to believe that the competition will want to drag out the lifecycle of their current hardware. After all, both companies have poured billions into their console divisions and, in the absence of recent numbers, both consoles still cannot be anywhere near profitability. This is a point usually ignored by gamers and industry observers alike. The key factors to a console’s success are hardware sales, the software to hardware tie ratio and the profitability of the hardware. In the last generation, for example, Nintendo is widely believed to have been the big loser. But the Gamecube brought in money from day one. It sold almost as many units as the Xbox, which at least initially was heavily subsidized. So Nintendo made money while the original Xbox left Microsoft a few billion Dollars short.

So, while industry analysts see ”increasingly problematic structural problems” for the Wii U, it is important to bear in mind that Nintendo have relatively little to worry about. They have almost always been able to push their consoles into profitable territory. And they own the biggest gaming franchises in the world. The Wii U may not become the hardware beast the next PlayStation and Xbox may become, but will that matter? After all, the Wii is clearly the runaway success and winner of this generation. And, in my mind, should the Wii U really not be capable of outperforming both Xbox360 and PS3, a price point of between $100 and $150 will have to make up for that.

EDIT Website Forget The Box has added details to the Wii U Hardware, citing anonymous Nintendo sources. The bill of materials is said to come to around $180 in total, $50 of which make up the tablet controller. Nintendo is apparently considering a launch price of "no less than $300."

According to our sources: “Cutting production costs to maximize profits is Nintendo’s main concern with the Wii U. They are cutting costs in the Wii U’s hardware to build back confidence in investors. Nintendo wants investors to view Wii U as a less risky proposition. ”

The new NFC capabilities for each new Wii U controller costs no more than $5 to implement, and the prices of NFC implementation in mobile devices is expected to fall below $1 in the near future. Our source explained: “NFC capabilities are a drop in the bucket for Nintendo. As NFC becomes more mainstream in mobile devices, the price for NFC implementation will rapidly decline. Nintendo is jumping on NFC because of a projected cost decline in the technology.”

When we asked about the controller’s other manufacturing costs:

“The cameras in the Wii U controller are an estimated manufacturing cost of $6. They are slightly better quality than the 3DS and DSi cameras. The touch screen has a manufacturing cost estimated at $14.” (...)

“Nintendo chose an economical GPU and CPU that could keep up with the performance of today’s current consoles, but keep hardware costs down to maximize profits. Nintendo got a bargain price on the custom GPU and CPU that the Wii U uses. There is a bigger focus on downloadable content, applications, video content, digital distribution, and services to create a stream of revenue. Investors will be ecstatic with the news.”

While the website is unknown to me, they do report about the videogame industry regularly. Only in January, Forget The Box reported about the Wii U's alleged eReader functionality. This does not necessarily make the website more credible, but may be an indication of the authors having genuine inside sources. The rumours certainly tie in with the above statements about the console. If true, a bill of materials around $130 for the console by itself would suggest modest hardware power. But it would certainly suggest that the console is more powerful than the Xbox360 and the PS3.

EDIT Tech video blogger Richard Masucci from ReviewTechUSA has posted an elaborate run-down of the known Wii U tech specs, comparing them with the Xbox360 and PS3 (thanks, Anonymous). In it, he concludes that the above rumours by anonymous developers are "a big pile of crap", pointing among other things to the Wii U's multithreading ability and generous L3 cache. The Wii U CPU will be able to "handle 16 threads of code simultaneously", while the Xbox360 and PS3 can only handle six. Masucci concludes:

"Even if the Wii U only uses the entry level quad-core Power 7 processor, its capabilities destroy the Cell processor hands-down. (...) It would be a moronic business move and almost impossible for Nintendo to make the Wii U less powerful than the current generation consoles. I mean, hell, if Nintendo went to nVidia and asked them to use the 8800 GT which is now a five year old GPU, it would still blow away the graphics processors that are in the Xbox360 and PlayStation3 - and it's five years old and costs next to nothing now."

In another video, Masucci compares the Wii U tech specs with what is known about the PlayStation4. Even here, the Wii U measures up, provided that Sony puts something along the lines of an AMD Radeon HD 7670 in the console, Masucci says. Should Sony go all out on the PS4 and use an AMD Radeon HD 7950 with Nintendo choosing a 4850 or 4770 as the Wii U's GPU, Nintendo will be left behind in terms of graphics power pretty much the way they are in the current generation. However, bear in mind that the Vita has not been a great step up from the PSP and that Sony is in dire financial trouble right now. They might not have the muscle to put out another PlayStation3. And remember the lessons learned from releasing such a costly hardware beast.