Brand Performance of Nintendos Wii - Case Study Example

Executive Summary This report focuses on the brand performance of Nintendo’s Wii as compared to its competitors in the United s market. For thisreport, various marketing reviews were researched upon. Scholarly articles and text books were researched for concepts of Brand Positioning, Product Design, Building Brand Equity and Nintendo’s strategies of Wii were analyzed in the light of the latter. Wii’s product design is both its strengths and weaknesses. Its unique and user friendly controls made it a hit among the mass markets when Wii repositioned itself. But at the same time, when Wii brought the mass markets on the same platform of the gamers’ market, Play Station and Xbox soon moved-in in the same markets with more market offerings such as Blu-Ray and DVD playback options. The report recommends what Wii must do in order to sustain its current market share of 45% with Sony and Microsoft catching up. Table of Contents Table of Contents 2 2 Introduction 3 Nintendo Wii: Marketing Analysis 3 Conclusion and Recommendations 7 References 7 Introduction Nintendo’s Wii was once the market leader in the gaming industry of the United States. Positioned as a sole gaming console for the whole family, Wii held a market share of massive 75% (Matthews 2011). Unlike its competitors Sony’s Play Station and Microsoft’s Xbox which were positioned as a game console for only hardcore gamers aged from 19 to 35 predominantly males; Nintendo went down in the mass markets of families and realized that there was no such thing as a casual gamer. It brought the ex-gamers and casual gamers on the same platform of Wii with low prices and a tagline of “Wii like to play!” (OGorman, 2008; Anthony, 2008). In the short-run, Wii did experience a boost in its sales. So much that it outsold its competitors with huge margins. Especially during Christmas, where more importance was placed to family values, Wii managed to attract families and hence, won the 75% market share of the industry (Matthews, 2011). Nintendo Wii: Marketing Analysis In order to analyze the branding strategies of Wii, it is compulsory to understand the concept of the ‘Blue Ocean Strategy”. This concept entails the brand to keep a pulse check on the market as to where in the market are the competitors positioned as. This concept rightly depicts that it is not advisable for a brand to be in direct and head on competition with other players but a better option would be to search for space and gaps in the market and position the brand in that space which is untargeted by the competitors (Anthony, 2008). Likewise, when all the players in the market (Xbox and Play Station including Wii) were focusing on the hardcore gamers’ market, Wii repositioned itself to the wider market of families. With this move, Wii was able to build a sounder customer base as compared to its competitors as Xbox and Play Station were still stuck on the hardcore gamers’ market. Now, even those who did not give preference to game consoles as such, were buying Wii consoles either because at their own pleasure or as a gift for the family (O’Gorman, 2008). Provided that Nintendo kept Wii’s design user friendly and simpler to use, its unique make was found to be easily used and controlled by both beginners and expert and adept players (Nintendo, Inc. 2007). Other brands namely Sony Play Station and Xbox have complex controls with non-intuitive or illogical buttons that are shapes and require time for the players to get used to them. Nintendo’s Wii on the other hand is uniquely designed to cater to the needs of non-gamers and soft-core players who find it more user-friendly (Nintendo, Inc. 2007). As far as the pricing is concerned, Wii was targeted to the wider household markets in the game console industry. This meant that Nintendo had to push the prices down in order to attract more consumers. Its advertising and promotional strategies helped Wii to become the most selling brand during Christmas time and especially amongst families who preferred to own only one of all the consoles in the market which lead them to purchase Nintendo’s Wii (Anthony, 2008). In the short-run, Nintendo did capture the market with its unique design, price and positioning strategy but in the medium-run, this decision led Nintendo to go in direct competition with other players in the long-run (OGorman, 2008; Malstrom, 2009). Besides this, for the long-run, Nintendo also decided on the contrary of its unique positioning to move in the main stream hardcore gamer market to penetrate in the latter. Now, the mass households who owned a Nintendo could already enjoy the experience of games of Play Station’s kind with more adult content and grown up and conventional games like Twilight Princess, Mario Kart Wii, Super Mario Galaxy etc; with the result, that it started to lose its share in both the markets as Sony moved its Play Station 3 in the mass markets with its Blu-Ray technology (Veldre, 2003). By moving on to the hardcore gamers’ markets where the Play Station and Xbox already had wide acceptance, Nintendo threatened its own customer base. Those families and non-gamers who were first indifferent to gaming consoles, received the exposure to the gaming experience and therefore, have now been brought to the common platform of gamers where Play Station and Xbox were exclusively positioned as hardcore gamers’ choice (Matthews, 2008; Veldre, 2003). This left Nintendo’s Wii’s markets vulnerable to Play Station’s and Xbox’s marketing efforts as Nintendo has automatically brought more consumers for them to target (Matthews, 2011). The only strength which Nintendo’s Wii has over hardcore game consoles is its unique design which is easy to use and its affordable price range (Nintendo. Inc, 2007). Not to forget, it was Nintendo who converted these non-gamers to gamers and hence, established strong brand equity. But then again, no customer is loyal. If Nintendo does not innovate and introduce high standard games and software in line with those produced by its competitors’ vendors, it will continue to face serious consequences as it will further lose its already deteriorating existing customer base to its competitors. The decision of moving to the hardcore gamers’ market with its games of somewhat adult content similar to its competitors (Twilight Princess, Mario Kart Wii, Super Mario Galaxy etc) has lead Nintendo’s Wii to a head-on competition with Play Station and Xbox in the up-market and has back fired on the performance of Wii as there are more superior brands available in the markets which feature better graphics and more complex gaming techniques which is just what gamers look for (Matthews, 2011). About three years ago, Wii governed 75% of the market share in the year 2007. However, as there was a swap in the market where Play Station positioned itself as a “Complete Entertainment Solution” with its Blu-Ray technology and Wii with its adult oriented games, Wii lost its share tremendously with the result that Play Station and Xbox caught up on their share in the market (Matthews, 2008; Knufken, 2008, Melanson, 2009). What Wii should have done is that it should have come up with some product variation if it was to fulfill the entertainment needs of the family. The market offering of Wii should have been more than just a game console. In order to take advantage of the mass markets, both Play Station and Xbox introduced DVD playback-enabled consoles which proved be a hit in the mass market (Veldre, 2003). On this platform, Wii was armed only with a game console where the rest of the competitors had already begun to reposition themselves as complete entertainment solution for the family. Wii on the other hand, remained with the game console despite the fact that Play Station 3’s Blu-Ray technology was considered as a break-through. Consistently, both Xbox and Play Station continue to take the chunk of the market away from Wii which was once governed by the latter (Matthews, 2008; Knufken, 2008). Conclusion and Recommendations Wii therefore must research the reason of this loss of sale and introduce a product in accordance with the needs and expectations of the consumer. The advantage which Wii has over its competitors is of the ability to keep their per unit costs low. However, statistics show that price may be the major factor for Nintendo’s initial success but quite recently, Wii’s dropped sales is led by competition’s wider market offerings where the consumers can not only play games but also watch high quality movies. Wii must therefore play on its established equity in the mass markets and market a new brand under a separate brand name which is close to Wii, such as Wii Generation, which would portray a fresh image in the minds of the consumers. References MALSTROM, S. (2009), “Casual Gaming and the Birdman Fallacy”. MATTHEWS, M. (2011), “ Analysis: Xbox 360 Capitalizes On Wii Contraction Through February In U.S.”, Gamasutra, March 11 OGORMAN, P. (2008), “Wii: Creating a Blue Ocean the Nintendo Way”, Palermo Business Review, No. 2. ANTHONY, S.D. (2008), “Nintendo Wiis Growing Market of Nonconsumers”, April 30, Innosight. NINTENDO, INC. (2007). Remote controller for Nintendo Wii. USA, Nintendo, Inc VELDRE., D., (2003). Playstation Warms Up. BandT.com. [Online] 27th November 2003. Available at: http://www.bandt.com.au/news/playstation-warms-up [Accessed 14th April 2011] SONY COMPUTER ENTERTAINMENT, (2011) "Playstation2 Sales Reach 150 Million Units Worldwide. Sony Computer Entertainment. Press Release. February 14, 2011. Available at: http://www.scei.co.jp/corporate/release/110214_e.html Accessed 1st April 2011 KNUFKEN, A. (2008), “The Format Wars: Sony Proves that It’s the Player, Not the Game, That Wins”, Business Pundit MELANSON. D., (2009). Microsoft touts 30 million Xbox 360s sold, 20 million Xbox LIVE members. [Online] 28th May 2009. Available at: http://www.engadget.com/2009/05/28/microsoft-touts-30-million-xbox-360s-sold-20-million-xbox-live/ Accessed 14th April 2011 Read More