The Nintendo Wii: Hitting its way into the Hall of Fame.
It’s hard to believe, but nearly two years after its release, the Wii phenomenon is still building. Just yesterday I was talking to a colleague who’s had real trouble running down a Wii to purchase, and then comes this story in the morning’s news:
Nintendo Forecasts Profit Will Rise 26% This Year
April 24 (Bloomberg) — Nintendo Co., the world’s biggest maker of handheld game players, forecast profit will rise 26 percent this year as its Wii console outsells rival machines. [...]
“Wii console sales are still on an upward trend,” Koki Shiraishi, an analyst with Daiwa Institute, said before results were released. “I don’t expect them to peak this fiscal year.”
I love how the mighty-mite Wii is kicking the butts of Microsoft’s Xbox360 and Sony’s Play Station 3. Why? Because the Wii is just . . . plain . . . BETTER.
Now, all the hard-core gamers in the audience will immediately say, “Nuh-uh!” — because the Xbox and the PS3 have demonstrably higher-tech components. More “horsepower,” in other words.
But pesky little Nintendo thought differently and figured out that they were trying to sell a more competitive gaming system — one that more people like better, instead of one that’s “better” in terms of component specs. The result has been a monster hit — surely one of the greatest products in the history of consumer electronics.
We’ve talked about this before:
- The best thing I’ve read about Nintendo’s Wii. (Links to a great article from Fortune.)
- Company of the Day, current edition: Nintendo. (Back when we were doing Company of the Day.)
- The Wii little dragon-slayer of the video game industry. (Most detailed entry; Chris Huston nailed the appeal of the Wii on the first take.)
As I was writing this entry, I talked about the Wii phenomenon with a different colleague. As he and I were talking, we came to the idea that the Wii might be something like the original Model T. Henry Ford’s great insight was that his company could use then-cutting-edge manufacturing processes to lower the price — and increase the ease of use — of automobiles to the point that they would appeal to a mass audience.
In comparison to Sony and Microsoft, Nintendo has done the same thing for the gaming-console business. History in the making, at least for this one niche.
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(Photo via Wikipedia.)
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Although the sales of Wii continue to outshine those of both XBOX360 and PS3, one of the other dynamics that needs to be considered is how MUCH a gaming system is used by the purchaser. Wii has seized upon a whole new demographic, the casual gamer. While this has been a historically untapped territory for gaming companies and represents vast profits to be mined, it also has its own set of drawbacks, namely that the casual gamer MAY purchase fewer games, purchase games less often, and use their systems less frequently. These behaviors will potentially have an impact not only on the game makers, makers of game peripherals, and ultimately the game systems makers themselves as the casual gamer make look at his/her Wii gathering dust a year later and decide that the novelty has worn off. Off to eBay Wii go!
Good points, Andre – but keep this in mind: Nintendo has made a clear profit on every single Wii they’ve sold. So while they’d surely benefit from having the deep life penetration of the Xbox or PS3, the fact is, they don’t need it. Sony and M’soft NEED for users to geek out heavily on their systems; the companies will never make money on the systems otherwise.
So when sales DO inevitably tail off for the Wii, ehh, Nintendo will still be smiling, is my guess.
Yeah, Andre, definitely an interesting point I hadn’t consciously considered, but mostly because I made the assumption — and still do, even after thinking about it consciously — that the novelty WON’T wear off ENOUGH, if much at all.
Just a couple of (the few) reasons why I’m keeping my assumption for now:
1. As you suggest, Andre, no one’s really done this before, so there isn’t much historical evidence to suggest one way or the other on this specifically. What there IS evidence of, though, is Nintendo’s success in expanding the sphere of gaming and keeping people playing (e.g. their DS handheld). Taking gaming beyond “gamers” is clearly just as much a passion for Nintendo as a business strategy. It does smack of Ford’s early genius. They aren’t strategizing for a novelty.
2. The addiction isn’t, I don’t think, so much the novelty of the interactive-visual experience, but a sense of “social” gaming, which I think tends to feed itself. These will be the “Monopoly” and “Chutes and Ladders” of the next generation or so. Sony and Microsoft are duking it out to bring the next best visual, realistic, immersive experience. Nintendo has (wisely) stepped out of that ring, and in so doing, has actually taken a LESS “novelty” kind of approach, and concentrated LESS, ironically, on the games and more on the gamer, or rather THEIR vision of the *new* gamer.
In contrast to Sony and Microsoft and most game developers, Nintendo’s focus is more on doing what it takes to get and keep people playing rather than making the next world-stunning game. It’s counterintuitive to the “gamer’s” mindset (mine being one), but I think it is the right approach for Nintendo to achieve what they want.
It’s unlikely that they won’t encounter challenges, but I like their long-term odds.
[...] The Nintendo Wii: Hitting its way into the Hall of Fame. [...]
Why shouldn’t it be hitting its way to the hall of fame? This is the first gaming system that is so interactive. When I was a kid we dreamed that one day things like this would be invented. Also, I love the way the nintendo wii gets the whole family to spend time together.
[...] The Nintendo Wii: Hitting its way into the Hall of Fame. [...]