Business Blog: Hoover’s Business Insight Zone

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.)