Archive for the ‘Nintendo’ Category

A “Sense & Respond” Retailer Would Have Bet Early On the Wii

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I just bought a Wii.  They are still hard to find, but I happened upon a pallet of them in my local Costco last week (right place, right time).  Although I have been blogging about the Wii Experience for months, I had never experienced it personally.  After the first swing of the virtual tennis racquet, I felt it.  I was really “playing” tennis.  I was not “pressing A to swing”.  With just that brief experience, I completely understand why the Wii has taken off like it has.   ‘It’s the experience, stupid!’,  and it’s quite a success story.

Nintendo has long been the underdog in the video game market.  Sony and Microsoft flew past them in terms of titles and realistic graphics during the last cycle.  Nintendo titles have historically been more “family oriented” (no cop killing or hidden sex scenes), and their stock performance has historically been lackluster.  When the third generation  (3G) console war started heating up last year, the PS3 was supposed to be the big cheese (with the big price tag).   XBox 360 had gotten a head start on the 3G market a year ago and had over 150 titles so they were expected to hold on to the number 2 position. 

Retailers, while covering all the bases, believed that PS3 would be the big winner.  As a result, they all fought for the same scarce pre-christmas inventory.  Fast forward three  months and we are now seeing headlines like: “Nintendo’s Wii Leaves Sony’s PS3 In the Dust and Nintendo Wii Sales Quadruple PlayStation 3 and Analyst: PS3 Readily Available, Wii Still Sold Out?

Faisal Laljee  over at StocksandBlogs.com made this observation:

I visited no less than 6 stores on Monday night – EB Games, GameStop (NYSE: GMENews), Best Buy (NYSE: BBYNews) and Target (NYSE: TGTNews). None of them had the Wii in stock. I spoke to one of the employees at GameStop and he told me that they get Wii shipments from time to time, but the units sell within minutes. Talk about demand.  He did volunteer that they had plenty of PS3’s stacked up in the back.

Were there early indicators that the PS3 would fail so miserably against the Wii?  If you recognized those indicators, could you have profited by changing your retail strategy and focusing more on the Wii?  Did any retailer see opportunity?  Perhaps Gamestop did as they secured an exclusive agreement to have Wii demonstration kiosks in their stores.  Did they “Sense & Respond” or was it accidental?  Here are some early indicators that could have pointed the way:

1. PS3 is too expensive for the average household

Lots of discussion about this from analysts following the E3 debut.  An analyst with ABI Research was quoted as saying “Asking consumers to pay $500 to $600 for a game console, when most have yet to purchase an HDTV, will give many current PlayStation 2 owners reason to consider the competition.”

2. E3 Performance: Poor PS3 showing; Big Nintendo buzz

From IGN.com:

“We went into E3 2006 unconvinced of the Wii name or the machine’s potential and walked away from the Convention Center knowing for certain that Nintendo has another hit on its hands…. The Big N’s new platform may lack the graphic horsepower of competitor PlayStation 3, but its innovative controller stole the show right out from underneath Sony’s collective feet.”

3. Continuous stream of bad news and missed expectations from Sony

Originally slated to debut in May, 2006; pushed to August, and then to November, Sony just could not deliver.  Industry observers were warning as early as February, 2006 that the PS3 could be a flop due to the high cost of the technology-bloated console.  Sony’s strategy was to use the PS3 as a Trojan horse to get Blu-Ray into your family room, but limited availability of key components which were reported as far back as July ’06 caused Sony to scale back the number of units available in North America delayed European availability until 2007.

4. Nintendo’s disruptive shift that focuses on the experience of the gamer

I think this was the biggest indicator that Nintendo would be the clear winner.  Nintendo’s decision to approach the business from the players perspective and make a product that truly engages the player (at half the cost of a PS3) was disruptive. 

Did you see it coming?

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How Nintendo Disrupted Sony

It’s been a while since I last discussed the recent videogame console war. It was long my belief that Nintendo’s Wii, with its focus on the player’s experience, would be the real winner. Although there is plenty of time for these two to battle it out, the early results are a clear indication that Nintendo’s approach has disrupted Sony. Michael Urlocker’s OnDisruption blog has a great post that lays out the case and offers six concepts about Disruption that are applicable to any business:

  • Nintendo’s market disruption is not about better technology;
  • Disruption is not about incremental improvements;
  • Disruption is about understanding where the customer experience is not good enough;
  • Disruption is about making a product more accessible;
  • Disruption is about changing the basis of competition;
  • Disruption is about a new business model.

Wii-markable!!!

Here’s some gamer trivia….  November, 2006 was the first time all three new home systems would be available to consumers, along with three established portable game devices.  And which company wont the month hands down????  I’m not gloating, but you can’t say I didn’t say so….

The month belonged to……..wait for it…….Nintendo!!!

According to NPD, who keeps track of this kind of stuff, Nintendo sold 55 percent of all video game systems in November, led by the launch of the Wii(TM) home system and the incredible continuing success of the Nintendo DS(TM) portable.  While the Wii sold an average of 70,000 per day during the first 7 days,  the biggest sellers for the month were the Nintendo DS, at almost 920,000 units, and Game Boy® Advance, with nearly 642,000 portables sold.  With Wii and Nintendo GameCube(TM) totals included, Nintendo sold through more than 2.1 million of the 3.9 million systems purchased for the month.

The data also reveals that the Wii title The Legend of Zelda®: Twilight Princess achieved sales of 412,000, representing 87 percent of all Wii purchasers, the highest industry rate of sale for any launch title since introduction of Super Mario® 64 with the Nintendo® 64 a decade ago.

In addition, despite the inclusion of Wii Sports software with every system sale, Wii buyers also purchased an average of two additional games, compared to approximately one game per system for the installed bases of either competing new home system.

Now tell me again what’s so great about the PS3???

Source: Nintendo

Sense & Respond: Yahoo Launches Big Brand Universe

Yahoo! may have a lack of focus with regard to many of their properties, but they seem to be focused like a laser in launching a new strategy to engage media’s biggest brands online, with or without their participation.  Using their “sensing” muscle, Yahoo! has identified more than 100 properties that are the most popular, or fastest-growing, with its users.   Yahoo!’s “response” action is to begin building what it calls a “brand universe” Web site around each one.  Set to launch throughout 2007, they will bring content from throughout Yahoo!’s network into one destination for fans.

This is a really smart move for Yahoo!.  The inclusion of two social media heavyhitters (Flickr & Delicious) make the site much more authentic with users.  It’s co-creation without having to ask the customer to create anything.  Finally, it’s a destination that will satisfy most any search request.

The first “universe” is live and it’s for Nintendo’s new Wii console.  The site is a fantastic mash-up of Yahoo! properties including:

  • Flickr for fan photos
  • Yahoo! Games for articles, reviews, forums, and user videos
  • Yahoo! Shopping for purchase options including an in-stock tracker for web stores
  • Yahoo! Answers for user Q&A
  • Del.icio.us & MyWeb for links to outside articles

They hope to partner with the companies behind the properties it selects to obtain extra content and potentially send some traffic their way, but the “brand universe” pages won’t hinge on their cooperation.

Yahoo! isn’t revealing the properties it has selected beyond the Wii, due to the sensitivity of ongoing talks, but names like “American Idol” and “The Lord of the Rings” are almost certain to be among them.

Source: Variety

Go to the Yahoo! Wii site here.

The Success of Wii

Seth Godin has a nice post on his blog about the Wii.

“Sony is losing hundreds of dollars on every one they sell, supply is limited and …people are getting shot in the frenzy to buy the game.”

“And yet Nintendo hums along, with great reviews, plenty of supply and a long-term hit on their hands.”

“What’s up?”

While Sony postures itself like an aging rockstar, promoting it’s overpriced, proprietary scheme for dominating your living room, Nintendo continues to focus on the gamer’s experience.  In the end, it’s the experience, not the technology that will win the devotion (and dollars) of gamers.

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