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3DSWiiU

With Wii U's Failures, Nintendo Lacks a Fail-Safe

by Neal Ronaghan - January 17, 2014, 3:58 pm EST
Total comments: 48

Slashing projections and talking up changing business structures add up rough days ahead.

The idea of 9 million Wii Us being sold in the current fiscal year, which began back in April 2013 and ends March 31, 2014, was a joke back when Nintendo stuck by it after the Wii U didn't touch 500,000 units worldwide in the first half of the year. Well, it's no laughing matter for damn sure right now.

Early this morning, Satoru Iwata announced that the projected amount of Wii Us sold worldwide is being trimmed to just 31% of the original projection. That's a disparity of 6.2 million systems. Nintendo expects to sell 2.8 million Wii Us in the current fiscal year ending this March.

Hoo boy, that's rather poor. To compare, the PlayStation 4 sold 4.2 million units in 6 weeks and the Xbox One sold 3 million units in 5 weeks. The Wii U, according to estimates, sold somewhere between 800,000 and 900,000 units from October to December in North America, and likely somewhere in the ball park of 1.25 and 2 million units worldwide over that three-month period. If all of this continues at the same pace, PS4 and Xbox One will outsell the Wii U by the end of the March at the latest.

Nintendo isn't doomed. They're not going to close up shop. The Wii U, though, is flopping hard. December 2013 was its best sales month to date, but it's still small potatoes to basically every game system except the Vita. Who knows what the future will hold. At the press conference today, Iwata said "We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It's not as simple as enabling Mario to move on a smartphone."

The cape feather in Nintendo's cap, the 3DS was the best-selling console in North America in 2013. High five, right? Not quite. While the 3DS is doing well, take note of something else in Nintendo's recent adjusted projections. The 3DS' sales expectations were taken down from 18 million to 13.5 million, which is sizable reduction. Who knows why the forecast was cut, but I think there's a few reasons.

The 2DS didn't do as well as they hoped. If you notice, we haven't heard anything about how XX% of 3DS sales were 2DS systems like we did when the 3DS XL was a smashing success. Obviously 3DS systems are still selling well, but the 2DS looks like it didn't give the platform the shot in the arm it was expected to do.

Or maybe it's a little bit darker than that. Maybe Nintendo's expectations for the console and handheld space are unrealistic. Maybe there is some truth to the console industry as we know it declining.

Yes, the PS4 and Xbox One had fantastic launches, proving that the doom and gloom surrounding disappointing new console sales was only limited to the Wii U. However, Sony and Microsoft's actions show a different side of the story. Sony just announced PlayStation Now, a way to play PS1, PS2, and PS3 games on, eventually, nearly any TV, tablet, or mobile device. PlayStation Mobile, a platform for integrating mobile development with the PlayStation Network. Microsoft is, to a little less success than Sony, cultivating the Xbox One to have a similar interface as the one in Windows 8, Surfaces, and Windows Phones.

Nintendo doesn't have a platform like this. If Nintendo's consoles were to fail, which the Wii U is in the act of doing, then they don't have a publicly known fail-safe plan. They haven't cultivated any future-proofing concept that allows their work to easily carry on in another form.

I'm not saying Nintendo should port everything to mobile or tablets. I do think they need to have some back-up plan, which for all we know, they already do. If the Wii U were to go, what are their options? Make another system? Focus solely on handhelds? Go third party? Sony and Microsoft have other options. Sony could have their games exist through PlayStation Now. Microsoft could turn to focus on their grander media aspirations. Nintendo doesn't have that possibility, no matter what novel updates they added to Nintendo TVii since launch.

Whatever the company has up its sleeve, we'll likely see it this year. As he stated, Iwata isn't resigning and if he's true to his word, big changes could be on the horizon. Nintendo and its president will have to be agile this year and do things most Nintendo fans thought weren't possible five years ago. All we can do is watch their execution and hope it works out.

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Talkback

"All we can do is watch their execution"

Are you referring to the Nintendo executive team?

StealthJanuary 17, 2014

I think Nintendo will be fine. This article is a tad dramatic lol

BlackNMild2k1January 17, 2014

Quote from: Stealth

I think Nintendo will be fine. This article is a tad dramatic lol

I agree, besides, Nintendo always has the playing cards.

Quote from: Stealth

I think Nintendo will be fine. This article is a tad dramatic lol

When you're cutting expectations for your main product by a quarter and your other one by 70%, a little drama is called for.

Evan_BJanuary 17, 2014

I highly doubt that Sony and Microsoft's consoles will do much better in the coming year, honestly. They're more popular systems, but they're lacking games just as much as the Wii U was.

This is it, folks. This is the last Console generation. What Nintendo needs to do is stand firm and most certainly NOT go the way of tablets and phones, because they're the only ones still devoting their efforts to making dedicated gaming consoles.

I'm a bit surprised by the 3DS markdown, but let's be honest- they gambled on the 2DS and it didn't work. Serves them right. However, they still did fantastically in the handheld market and I think that's proof enough that handhelds still have life to them. However, I believe the 8th Generation of consoles will be the last. The new Sony and Microsoft consoles are built like PCs so they can handle multiplats, and the Wii U has no third party support because it's nothing like a PC. Even though that's how consoles should be.

jg233January 17, 2014

They should have never named it the WiiU.  Half of the people I talk to who loved the Wii have no clue there is even a new console and the other half are just confused about if it is a new system or some expensive tablet for the original Wii.

As Shaymin said, there's a reason for drama. The problem is real. Iwata's admitting it. The company's admitting it.


You can totally go and ignore sales talk (Honestly? I would if I wasn't writing for this site), but denying the issue's severity is delusional.

AdrockJanuary 18, 2014

I still think Wii U will be fine. Nothing fancy but enough that a successor will launch in late 2016 at the earliest. Nintendo knows Wii U's shortcomings. Start building a better tomorrow now. It would benefit them greatly to open some new studios from the ground up across different regions. Additionally, if any company wants the security of being a second party, go for it.

tendoboy1984January 18, 2014

I just bought a Wii U. I guess I made a bad purchase if Nintendo really is thinking about abandoning the platform...

In all seriousness, all Nintendo needs to do is ramp up game developement and court more 3rd-party publishers. They're doing a good job with the indie teams, but something needs to be done to gain support from the big companies like EA, Bethesda, Rockstar, etc.

I'm loving my Wii U. Switching from the TV to the GamePad is the coolest thing I've ever seen; it's like that console / handheld hybrid that we've all been dreaming of. I guarantee Nintendo's next console will be an actual portable handheld that syncs to the TV.

AdrockJanuary 18, 2014

The coolest thing I've ever seen is this:
http://i.imgur.com/8EnFOA5.jpg

NeifirstJanuary 18, 2014

The 3DS slowdown could be seen as troubling, but doesn't its sales rate simply match the GBA's?  It appears the Nintendo DS and Wii were not the norm - they were the outliers from the usual trends.

AdrockJanuary 18, 2014

Is anyone especially surprised that Wii U underperformed when the console's biggest title didn't hit until the middle to end of November? The Wonderful 101, Pikmin 3, and The Wind Waker HD are nice titles to have, but they're supplementary and released in the latter half of the year.

People are acting like this is news when the appropriate reaction is, "Oh, right, right. Nintendo had no business launching a console in 2012 with what they had." I'm not justifying that or the poor overall sales; I simply don't understand the confusion. When Nintendo announced their sales projections, I don't think a single person thought they would come close to it. I suppose dropping projections so drastically is what people are gasping at. Even then, are we really surprised? When you have extremely lofty projections to begin with, of course the drop would be larger.

Again, I still think Wii U will move past this. 2014 will fare better. Nintendo already has a big title coming out next month. Who knows when the next one comes? Maybe Mario Kart 8 in May? They have a more evenly distributed release schedule and more major titles. Personally, I'm pretty happy with Wii U. Despite its general lack of titles, it still had more games that interested me than both Xbox One and Playstation 4 have combined. I realize I'm not in the majority here.

tendoboy1984January 18, 2014

Nintendo should just focus on handhelds, because that's where there strength currently is. I doubt they would ever develop games for PlayStation or Xbox. Exiting the home console market to focus on handhelds and mobile devices is their best bet.

tendoboy1984January 18, 2014

I forgot to add, this whole situation is exactly like what Sony went through with the PS3. Sony managed to turn things around for the PS3, so why does no one think that Nintendo can do the same with the Wii U?

broodwarsJanuary 18, 2014

Quote from: tendoboy1984

I forgot to add, this whole situation is exactly like what Sony went through with the PS3. Sony managed to turn things around for the PS3, so why does no one think that Nintendo can do the same with the Wii U?

Because Sony had more going for them with the PS3 than Nintendo does the Wii U. The situations are only superficially similar.

nickmitchJanuary 18, 2014

Nintendo can bounce back, but it's going to be rough.

They'll either need to abandon ship and develop a new console that people actually want to buy and developers actually want to make games for AND release it at the perfect time, or figure out a way to make people want the Wii U.

I'm sure the 2DS is the main reason for the 3DS projections dropping.  Nintendo didn't count on people not wanting that.  That's an honest mistake.  I think we still need to see if Xbox One and PS4 sales fall off before we can say if it's the market or the Wii U, but Nintendo needs to act like it's the Wii U because that's looking more likely.

Lindy made a good point on twitter about Nintendo missing out on the West's impact on gaming culture.  Nintendo, who increasingly can't rely on 3rd parties, needs to buy up some studios who can put those types of games (e.g., open world, FPS, etc) that the western market loves on the Wii U.  It's a costly, long term plan, but nobody's buying the Wii U for games not made by Nintendo anyway.  You buy those afterwards.

tendoboy1984January 18, 2014

You know, Nintendo's inevitable move to mobile gaming would work out well for them. They could just make a minigame collection. Kirby games are full of minigames that would translate well to mobile devices, especially the Scope Shot and Dojo games from 'Kirby Returns to Dreamland'. Super Mario 64 DS also has tons of minigames that could be ported to mobile devices, because they all relied on the touchscreen.

nickmitchJanuary 18, 2014

Show me a company with Nintendo's revenues that only produces mobile games.

tendoboy1984January 18, 2014

Did I say 'only mobile games'? No. I'm talking about them pursuing mobile gaming as a side project while they mainly focus on the 3DS and Wii U. Nintendo can make minigame collections for mobile devices as a way to entice players who love Nintendo's classic franchises. Plus it would be a great revenue stream for them while they get the Wii U situation sorted out.

AdrockJanuary 18, 2014

Nintendo doesn't need to abandon Wii U and rush a new console to market. They just need to make Wii U not suck enough to get them to where they can comfortably release a successor (meaning not rushed in any way) then they can drop Wii U like Gameboy Advance. I think that's doable. Release some first party games and that's already more than half the battle.

Also, releasing Nintendo franchises on anything but Nintendo hardware is a disaster. That's sending the message that their first party games are available on other hardware. That's the last thing they should do.

tendoboy1984January 18, 2014

OK I think you're missing my point. I'm talking about making MINIGAME collections for mobile devices, not full games. The minigames would allow Nintendo to reach out to a broader audience while keeping their main games exclusive to their consoles.

Look at all the minigames that were in Super Mario 64 DS and the various Kirby games. Those would be perfect for mobile devices because they are simple and easy to play. Even the Game & Watch games would be perfect on mobile devices.

Nintendo could release these minigame collections as a side project while they still focus on their 3DS and Wii U consoles.

Mop it upJanuary 18, 2014

The Wii U may be floundering, but I don't think Nintendo as a whole is in any trouble. Nintendo may do something like pursue smart devices just for some quick profit on the side, but I don't think they're going to abandon the Wii U or alter the course of the 3DS. Doing either would just make the situation worse. Hopefully, Nintendo haven't forgotten that one reason Sega left the console business is because they released too many systems in too short a time.

OblivionJanuary 18, 2014

Quote from: nickmitch

Show me a company with Nintendo's revenues that only produces mobile games.

Rovio.

nickmitchJanuary 18, 2014

Quote from: Oblivion

Quote from: nickmitch

Show me a company with Nintendo's revenues that only produces mobile games.

Rovio.

Rovio FY2012 revenue 152.2M Euros, roughly 206 million USD.
Nintendo FY2013 Revenue 635.6B Yen, roughly 6 billion USD.

UncleBobRichard Cook, Guest ContributorJanuary 18, 2014

Quote from: nickmitch

Quote from: Oblivion

Quote from: nickmitch

Show me a company with Nintendo's revenues that only produces mobile games.

Rovio.

Rovio FY2012 revenue 152.2M Euros, roughly 206 million USD.
Nintendo FY2013 Revenue 635.6B Yen, roughly 6 billion USD.

But now that the Wii U is failing, they only make about seven dollars!!!

smallsharkbigbiteJanuary 18, 2014

Revenue isn't necessarily a good stat.  Nintendo is projecting a loss of $336M which is much less than $7 profit.  Does Rovio make a profit?  And comparing them to a company that only makes mobile games is probably a bad comparison.  Probably Take Two or EA would be a better comparison since if they left hardware they would be a third party and could support a variety of formats in addition to mobile. 

nickmitchJanuary 18, 2014

My point of asking about a company with only mobile games was to point out how small of a revenue stream that provides.  Rovio probably has the most successful mobile game franchise with Angry Birds, and that's the best they can do.  The money just isn't there, no matter how much people pretend it is.

Revenue is better "stat" than you think.  We could look at Net Income, but Rovio didn't make a profit in 2012 for different reasons than Nintendo in 2013.

smallsharkbigbiteJanuary 18, 2014

I don't think anyone (even Nintendo) is implying that mobile only is their future.  I believe EA is a better target because they are diversified with franchises like Nintendo.  EA made $4B in revenue from their software last year.


The problem I have with Revenue for Nintendo is most of the revenue comes from hardware is not profitable so that is not necessarily "good" revenue.  Yes, if they could sell their hardware (at a profit) it would be good, but they haven't proven they can. 


Also, in 2008 they had almost $17B in revenue.  They are on a pretty sharp downward trend so it would seem they have to do something because they are in danger of becoming irrelevant and being unable to support their corporate structure which has grown as their revenue grew. 

smallsharkbigbiteJanuary 18, 2014

2009 Revenue for Nintendo was almost $19B.  Wow, they've fallen a long way in a short time. 


I looked into the Rovio situation a little bit.  Seems they don't get the freemium model.  Their games are high on the download chart, but low on revenue as few consumers feel the need to buy.  The article I read implied downloads are not equal to revenue in the mobile market.  So highest revenue games are not necessarily the highest downloaded games.


There is certainly alot of room for growth in the mobile/tablet market which is why many companies are bullish on it.  What I could find is mobile ap revenue was $26B in 2013 projected to grow to $100B by 2017. 

BlackNMild2k1January 18, 2014

You guys don't have the whole story. Nintendo isn't going mobile. That's not gonna happen.

From the rest of what I just read, it sounds more like NOA & NOE may be able to run a little more independent in the near future. Big meeting happens Jan 30th.

Link to news story in this post:
http://www.nintendoworldreport.com/forums/index.php?topic=37892.msg821831#msg821831


Nintendo President Satoru Iwata admitted he had misread the markets

"The way people use their time, their lifestyles, who they are—have changed," Mr. Iwata said. "If we stay in one place, we will become outdated."

Still, Mr. Iwata noted that Nintendo's sales in Japan were better than they were in the U.S. and Europe, and said the company needed a better way of keeping in touch with trends abroad.

"In Japan, I can be my own antenna, but abroad, that doesn't work," he said.

tendoboy1984January 18, 2014

I really think many games will benefit from the GamePad acting as a 'second screen' device. Games like Zelda have the map displayed at all times, and it's great for quick inventory management.

Ubisoft is a big supporter of Nintendo (which is ironic because they were one of the first publishers to drop support during the GameCube era). I guess they really are platform agnostic these days. Watch_Dogs is looking amazing, it will be a great replacement for the GTA game Nintendo fans will likely never get.

WB Games deserves a shout out as well. I'm a huge fan of the recent Batman Arkham series, so it's good to see those games on the Wii U. And of course those adorable LEGO games will be on everything under the sun.

We also can't forget about Activision. Call of Duty and Skylanders are never going away, and Activision knows those games have fans on Nintendo consoles (Skylanders especially).

As long as these companies (WB, Activision, Ubisoft) keep supporting Nintendo systems I will be fine with the lack of other third-party support. I don't care about Bethesda after paying the boring and tedious Skyrim. And frankly Rockstar is the only one I'll miss.

ThePermJanuary 20, 2014

we'll all change our mind when zelda comes out, unless Zelda is an overhead 2d zelda game

tendoboy1984January 20, 2014

As long as the Wii U gets games like Assassins Creed, Batman, and Call of duty, then I don't care about the other third-party companies supporting it.

Ubisoft, WB Games, and Activision have all supported the Wii U to a variable extent. I'm positive it will always get Ass Creed and Call of Duty simply because those games are released on everything to bring in the most profit.

CericJanuary 20, 2014

Best case scenario I'm hoping that Nintendo allows their two big Divisions, NoA and NoE, to have a couple true in house development studios that are based in those regions and mainly managed by people in those regions.

nickmitchJanuary 21, 2014

Forking over more control to NOA and NOE is a good thing, probably a great thing.  I'm hoping  both are given the budget to, like Ceric said, run studios based in those regions to develop the games that appeal to those players.  Everybody talks about how Nintendo needs to follow certain trends and "get with the times", well here's one that's a bit forgotten: western gamers LOVE FPSes.  Nintendo has no FPS franchise in the umbrella currently; Sony and MS both do.  Miyamoto once said he could make Halo.  Well, maybe he should or someone at Nintendo.

No matter at what angle you approach it, Nintendo's recent woes come out as egg on their face, if not worse, because it's one, if not a compilation of the following:


Miserable misreading of the market by the way they forecasted their projected sales through the fiscal year.


Horrible mistakes in conveying why you as a consumer need a Wii U.


Provide services through their consoles that are antiquated compared to their competition.


They're clearly living in a Wii-Success mindset, and I don't expect any significant improvements until I see more than admissions by Iwata that there's a problem.

Cue the "Everything's Fine! Nobody Panic!" episode of Nintendo Direct.

tendoboy1984January 22, 2014

Quote from: nickmitch

Forking over more control to NOA and NOE is a good thing, probably a great thing.  I'm hoping  both are given the budget to, like Ceric said, run studios based in those regions to develop the games that appeal to those players.  Everybody talks about how Nintendo needs to follow certain trends and "get with the times", well here's one that's a bit forgotten: western gamers LOVE FPSes.  Nintendo has no FPS franchise in the umbrella currently; Sony and MS both do.  Miyamoto once said he could make Halo.  Well, maybe he should or someone at Nintendo.

Miyamoto talks out of his ass a lot of the time because he has a huge ego and thinks he can do better than almost every other developer.

"You guys like Halo? Well I could make that too! I'll show you!"

OblivionJanuary 22, 2014

Oh, so you know Miyamoto personally enough to make this assumption? How did you two meet?

smallsharkbigbiteJanuary 22, 2014

Quote from: tendoboy1984

Miyamoto talks out of his ass a lot of the time because he has a huge ego and thinks he can do better than almost every other developer.

"You guys like Halo? Well I could make that too! I'll show you!"

Actually Miyamoto comes off as one of the most personable people in interviews.  He is probably the most influential people in video games so I would say that his games do better in the market than most almost every other developer.  You are taking the Halo comment out of context.  The comment was in question to other games push realistic visuals and the FPS revolution.  He said he could design a game like Halo (since that was the question) but he didn't want to.  He continued that he doesn't try to copy other games on the market but he pushes to find new game-play elements or controls that people will find fun in the future.  Like it or not, his games are some of the highest selling games (such as Wii Sports) and we wouldn't have many of them if he spent his time copying others ideas.  I would like it if Nintendo did come to market with a FPS, but I wouldn't put Miyamoto on it.  I'd let him do his own projects and supplement these types of games with other developers. 

KhushrenadaJanuary 22, 2014

Quote from: tendoboy1984

Quote from: nickmitch

Forking over more control to NOA and NOE is a good thing, probably a great thing.  I'm hoping  both are given the budget to, like Ceric said, run studios based in those regions to develop the games that appeal to those players.  Everybody talks about how Nintendo needs to follow certain trends and "get with the times", well here's one that's a bit forgotten: western gamers LOVE FPSes.  Nintendo has no FPS franchise in the umbrella currently; Sony and MS both do.  Miyamoto once said he could make Halo.  Well, maybe he should or someone at Nintendo.

Miyamoto talks out of his ass a lot of the time because he has a huge ego and thinks he can do better than almost every other developer.

"You guys like Halo? Well I could make that too! I'll show you!"

Hokey doodle! I don't get you tendoboy1984. You are bemoaning the fact so many people are negative about Nintendo and the Wii U but the one thing most people are still jazzed about, games from Miyamoto, you suddenly crap all over him. The guy has been behind at least 6 of all-time greatest, influential games ever made and is actually quite humble in pretty much all interviews he has given. But because he thinks he can make a first-person shooter even though he hasn't done it before, you want to trash him and think he is not very talented.

Everyone complains about the amount of FPS games flooding the market. There are plenty of game designers making FPS games and most do not have the skill or creativity of a Miyamoto. Yet, many of those FPS games still have moderate to great success. Thus, when Miyamoto says it is something that he could make also, I think he's right considering how many other people are able to do it. And thank goodness he doesn't because, even though people may moan about the Wii U not having many, the whole market itself is glutted with them that I'd rather see him create a different kind of game. Even if it is a Wii Music at least it is an attempt at something new.

Mop it upJanuary 22, 2014

Nintendo have a fail-safe: huge sacks of cash.

Ian SaneJanuary 22, 2014

Since Nintendo has been effectively FPS-less since they sold Rare it would be cool to see Miyamoto make one.  I'll get he would make a great one, at least in single player as I suspect Nintendo's typical online weirdness would goober up the multiplayer in some way.  But Miyamoto is a creative guy with a distinct style and he realistically should be allowed to cut loose and make what interests him.

But that doesn't mean that OTHER Nintendo teams can't fill in the genres that Nintendo fails to provide their userbase with.  Not just FPS games but Western RPGs and sandbox games are absent.  Surely Nintendo could create some more variety by having their other teams work in such genres.  Instead they've got them largely working on the same types of games Miyamoto and the EAD team already make.  That's why it drive me nuts when they have like four teams working on 2D platformers at the same time.  Dammit, that genre is already well represented while entire other genres are completely absent.  Put those teams on those absent genres and provide some variety!  Fill in the genre gaps and effectively stop handing the competition killer apps.

The term "Halo killer" gets thrown around.  You know why Nintendo has needed such a thing for over ten years?  Because if you want to play a game like that you DON'T buy a Nintendo console because that type of gameplay experience is effectively exclusive to the other consoles.  By refusing to fill the genre gap Nintendo allows the competition to gain an advantage on them.

BlackNMild2k1January 22, 2014

I don't think Nintendo needs to necessarily change what their existing dev houses are working on, but more likely get more dev houses in different regions staffed with people that not only have an interest in making those different genres but experience in doing so.

I don't need EAD to shift focus from Mario and start work on Halo/Gears fusion clone.
But they could get their new US Studio A and Yurop Studio B to get to work on that right away

Ian SaneJanuary 22, 2014

More or less Nintendo needs good games of all popular genres on their console.  Who works on it doesn't really matter as long as these games exist and turn out well.  Third parties can fill the gap if the support is there but it isn't so Nintendo needs to fill the gap themselves until the support improves.

nickmitchJanuary 23, 2014

Nintendo's ace has and always will be its ability to make the best damn games period.  There's no doubt in my mind that Nintendo could do something with the FPS genre that isn't iterative like COD or Halo and feels fresh and unique.  The same goes for open world type games.  The problem is, they just don't seem to want to.

The first half of that post looks like it'll get me in the Fanboy Euthanization Station over in the Funhouse section of our community forums.  Check it out, if you're visiting the site for the first time. ;)

KhushrenadaJanuary 23, 2014

Quote from: nickmitch

The first half of that post looks like it'll get me in the Fanboy Euthanization Station over in the Funhouse section of our community forums.  Check it out, if you're visiting the site for the first time. ;)

Ha ha ha ha. Oh man, you realize that many new users to this site who comment on these articles are often people who will say positive things about Nintendo and try and fight back against doom and gloom posts. Showing them a thread where other forum users post such positive thinking as a thing to be mocked is just about the worst example you could give to make them interested in the funhouse. You gots ta know your target audience.

Still, I like your recruitment drive attitude and it gives me an idea for something that might be more appealing. I wonder if I can follow through on it.

ShyGuyJanuary 23, 2014

Nintendo's Fail Safe is to buy Sony.

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