I originally sat down to write one post about the launch of Nintendo’s new system this upcoming week, looking at how the company’s strategy of differentiation and viral PR marketing may have them poised for an surprising success with the Wii. I ended up with something far too long and unwieldy for one post. As such, this will be a three-part series that will take up the rest of the work week here at the blog. I think there’s a lot to be learned from what Nintendo is trying to do here, be we students of public relations, business or video games.
This first installment looks at the current videogame market through my own experience as a gamer, ending with the success of the Nintendo DS that perhaps foreshadows things to come…
I, my friends, am I recovering videogamer. And I think I might be getting back in the game.
How it began: I must have been only five or six years old, and I was sick – ‘lying on the couch with blankets and stuffed animals and a juice box’ kind of sick. My parents thought that since I was going to be stuck inside for a few days, it might be a good idea to head down to the local video store (Funky Fred’s, whose store closed a few years later as, rumour goes, his tax returns were kind of funky too) and pick up one of those newfangled Nintendos for rent. So, off they went, returning with the Nintendo Entertainment System Action Set that included Super Mario Bros. and Duck Hunt. One night, and I was hooked. I became a videogamer.
I held onto that title for over a decade, sticking with videogames long after my parents presumed I would give it up. In fact, my story is typical of my generation: a thing once thought of as a child’s toy became something that we grew up with. As the audience grew older, the games grew to match: think of the early uproar over Mortal Kombat to the more recent hoopla over Grand Theft Auto. Nowadays, video games are hardly child’s play.
Me, however, I thought I was out of it. After owning at least one videogame system throughout much of my short life, I did not invest in the last generation (consisting of Sony’s Playstation 2, Microsoft’s Xbox and Nintendo’s Gamecube). I don’t quite know why I began to lose interest, but I think a large part of it might have been time commitments. I was heading off to university, and while I always had time for a good multiplayer game of No Mercy, Goldeneye or Halo, I really didn’t have the time to commit to the long, epic single-player games that by-and-large I tend to favour. Yes, when my brother and I were both home for the summer I had the time to play through The Legend of Zelda: The Wind Waker or Super Mario Sunshine, but not when I had classes, papers and exams in the way.
The Fall of the Nintendo Empire (?)
Plus, the horse that I had always backed had seen better days. Yes, every system that I have ever owned was made by Nintendo, from the NES to the SNES to the N64 and even a Gameboy. I simply couldn’t go without playing the games that, for me, epitomized what gaming was all about: Mario, Zelda, Metroid, Mario Kart, etc. But by the late 1990s, most of my peers who still played games gravitated towards new systems by Sony and Microsoft.
Nintendo lost its market share, in my opinion, for two reasons. The first is that by making the Nintendo 64 a cartridge system instead of a CD one, Nintendo alienated many third-party developers who faced increased production costs to make N64 games. As such, Sony became the system with the most games (which usually leads to the most market share – it’s a bit of a ‘Catch 22’ situation). The other reason is that they proved unable to shake their image as a “kiddy” company as the videogame market moved from a broad, children-and-family focus to a teenager-dominated audience. They simply lost their cool, and Nintendo systems – especially the Gamecube – were seen as for Nintendo fanboys and kids only.
But a funny thing happened on Nintendo’s trip to the dustbin of videogame history. For one, while its console market share has dropped dramatically in recent years, its console division still turns a healthy profit (which is more than one can say for Microsoft, which has never made a profit on the Xbox line). But more importantly, Nintendo still continues to dominate the handheld market with first its Game Boy series (the latest of which is the Game Boy Advance) and more recently with the Nintendo DS, a unique dual-screen system that allows the player to use a stylus pen on the lower screen.
Testing a Trojan Horse
I want to talk about the DS for a bit, because I think it’s really indicative of how what looks silly and risky ends up being an incredibly smart business endeavor. When the DS was first showed off to the media and videogame fans, no one quite knew what to make of it. Playing videogames with a pen? What did this mean for Nintendo’s Game Boy line? How would it compete against Sony’s upcoming Playstation Portable, which would have far more processing power AND Sony’s marketing muscle behind it?
To answer the last one: better than anyone could have predicted. The DS has now sold over 26 million units around the world in just two years, and sales figures are ahead of the PSP both in North America and in Japan (in fact, the old Game Boy Advance is actually beating the PSP in North American sales). The PSP fit the Playstation model of doing business to a T: high-quality graphics and sound, multimedia capabilities and games tailored to the current mainstream videogame audience (racing, sports, Grand Theft Auto-type games, etc.).
And yet the DS is winning, and winning big with a strategy that doesn’t involve doing what its competition is doing. Nintendo has thrown a cog into the traditional model of how the videogame industry works through two important strategies.
One is downplaying graphical abilities in favour of innovation and entertainment. The DS’s graphics exist somewhere in between the SNES and the N64 – hardly even close to that of the PSP, which rivals the current-gen PS2 in its graphics. But the DS games are unique and different, with companies coming up with innovative ways of using the dual-screens and the stylus pen. Some of these include a video game that replicates heart surgery, one that uses the touch-point to make characters dance, and a lawyer simulation game. Games like these recall the pre-Sony era, where a videogame was something novel, unique and creative – and a heck of a lot of fun. Yes, there are DS games that are deep, complex and immersive, but there are also a lot that are great just to pick up and play for the heck of it.
Which brings me to the other strategy: expanding the videogame audience. Despite all the attention and press that Sony’s successes have brought the industry, the fact is that for many people, they are simply too complicated, too time-consuming, and too expensive. The videogame market is argubly LESS mainstream than it was during the late 80s, early 90s – we just hear more about it because the videogame market of 18-30 year old males happens to be the target demographic for most advertisers.
But with the DS, Nintendo has succeeded in expanding that market not only to younger players, but to older ones as well, along with videogaming’s most neglected market: women. Games like Nintendogs, a dog-simulator, and the Brain Age series that feature brain exercises, have become huge hits both in North America and Japan. Need proof that they work? My MOTHER plays Brain Age. If my mom can play a videogame, then there’s something larger going on here.
In fact, I would argue that the Nintendo DS was more than just a “third pillar” to stand alongside Nntendo’s console and Game Boy series, as the company claimed. I see it as something halfway between a Trojan horse and a test drive, to see if a competitive strategy of differentiation and disruption could lead to success in today’s videogame market.
In short, it was a trial run for the Wii, Nintendo’s new console system that’s set to launch this Sunday, two days after Sony launches its Playstation 3. The Wii is both the most interesting system and the most daringly competitive strategy to hit the videogame market in quite some time…
Tomorrow, I’ll look at how the Nintendo Wii builds upon the strategies that Nintendo established with the DS and why it may be poised for a big breakthrough in the console wars…