Marketing Analysis for Nintendo Wii

Nintendo’s strategy for pricing of consoles and games was to lock-in the network effects consoles offered by pricing them at- or below- cost and reaping profits by pricing video games at significant margin. Nintendo took these actions because it knew that if consumers used the NES/ Famicom console, they would be a captive audience for its higher-margin video games which were necessarily more perishable from a consumer taste perspective. This affected the value created by

The Wii is developed on the same principle as of an Xbox and other gaming consoles. A form of interactive media that has extended to the point where it now has virtual exercise and sporting games you can play in your living room. With means of a wireless “power plate” and hand held cordless remote, Nintendo has virtually compiled almost every sport or physical activity one can do. So what does it extend? The Wii and its programs have been developed to stimulate its users physically and mentally, therefore it extends the entire body. Nintendo also have Learning

After Sega went out of business with their last console, the Sega Dreamcast, there were only two developers creating consoles which was Nintendo and Sony. Microsoft saw an opportunity to make money and they had already had some experience in the video game industry with their help at Sega.

The Nintendo brand has changed over the years, starting out as a simple card company that has expanded into the massive electronic giant we know today. They have had their ups and downs through their time as a gaming company but they always have the gamer’s interest in mind. As the late CEO of Nintendo, Satoru Iwata said, "On my business card, I am a corporate president. In my mind, I am a game developer. But in my heart, I am a gamer" (Yu, E., & Chan, W.

However, as the Wii’s target market is slightly different from that of either the Xbox 360 or the PS3, it is of less concern in the short-term. Nintendo’s dominance of female console gamers, however, is of serious concern. In 2008, the Wii outsold the PS3 and Xbox combined, indicating Nintendo’s strength in the market, as well as the growing eminence of female gamers as a target for game and console developers.

Several years had passed and a Japanese company by the name of Nintendo decided it wanted to enter the market. Nintendo’s Family Computer, or Famicom, was doing well in Japan and Nintendo wanted to try and find success in North America. This proved to be difficult because America was still wary on the idea of game consoles after the crash. To try and avoid the skepticism that came with items labeled as a game console, Nintendo rebranded the Famicom as the Nintendo Entertainment System and marketed it as a toy. Believe it or not, this actually worked and Nintendo became a household name. In order to keep their success going Nintendo took steps to avoid another market crash. Nintendo would put developers under a contract that kept them on their console and would keep them from developing games for developers. Developers also had a limited amount of games they could release in a year as

Sony, Microsoft and Nintendo have been competing for a decade with Sony dominating the market throughout most of the years because of their superior technological products. The video games industry faces an entirely new rivalry situation. In 2008, Sony lost its strong position on the market, because of Nintendo’s success with their dynamic Wii over Sony’s high-tech PlayStation 3 and Windows’ Xbox 360. Although the Wii was technologically much less advanced than PS3 and Xbox 360, the Wii's cheaper price, ease of use, innovative motion-sensitive controller, and simple but fun games, made the console a hit all demographics from 9 to 65 years old, male and female. All these factors resulted in Nintendo’s Wii dominating sales and surpassing Sony’s by an impressive ratio of 2:1.

The product life cycle concept derives from the phases through which a product undergoes, from its introduction, to its growth in the market, to the maturity it attains in that market, to the very last stage of declination. The

Both Sony and Microsoft focused their efforts on hard-core gamers and offering processing power and cutting-edge features to attract them. On the other hand, Nintendo has been trying to attract new customers that traditionally are non-gamers. The

Product life cycle refers to the stages that a product. Changes in demand for the product is the factor that delineates the changes from one cycle to another (Daft & Sanders, 2012). The typical product life cycle has four identifiable stages;

The fifth and final force is that of the intensity of rivalry. This is the strongest force in the video game industry. Nintendo was very strategic in targeting an audience that Microsoft and Sony neglected. While Microsoft and Sony focused on the typical gamers, males ages 18-34, Nintendo focused on a broader audience “everyone” when creating their Wii. In the video game industry rivalry Microsoft and Sony are battling for the same market, while Nintendo has much of its audience all to itself. This is why

The key facet responsible for the Wii’s popularity lies in the innovative design, which “calls to action” the player with physical movement. The writer views the wireless motion sensitive game console as a new, simple and fun method of gaming for all age groups. As a result, it may appeal not only to the traditional expert video game player like the PS3, but other individuals outside that segment. It thus

The role of technology is vital in this industry as it focuses on technological efforts for competitive advantage. Every new development uses new technology. Though there are restricted innovations in the gaming industry, the speed of technological transfer is very high. Nintendo’s role from playing cards to toys to video games and then with each console introduced, included many technological changes. Technological up gradation increased hardware costs and discouraged innovation. The online capability of Nintendo Wii was a major change in the technology of the video game industry though they were not able to do as well as their competitors (Sony, Microsoft).

Nintendo however is not present in this new market and therefore it is very important to take in consideration to enter this new area because at the moment the company does not have products that satisfy those new needs resulting in the loose of sales and consequently revenues.

The main obstacle facing a start-up video game console company from entering the industry is saturation of the market from the larger video game console makers or the “big three” Nintendo, Microsoft, and Sony. The big three tend to release new game consoles around the same time frame and compete head to head for sales. During the time frame it is impossible for a new entry to jump into the fray. 2010 was a banner year for video console sales Sony’s PS3 sold 14 million units followed by Microsoft’s Xbox 360 13 million and surprisingly Nintendo’s Wii led the big three selling 17 million units. After the 2010 release of all three consoles sales started to decline for each company. Nintendo took the largest sales loss at 72% in 2013 only 747,000 were sold compared