wii CASE STUDY
Please prepare the case
The Wii: A Marketing Revolution in Gaming?
In October 2007, Nintendo's two console games platforms, the handheld DS Lite and the Wii,
were leading the market (valued in excess of $10 Billion) and outselling competitors such as
Sony's PS range and Microsoft's Xbox 360.
The Wii is a home video game console, designed and released by Nintendo. The console is
a seventh-generation console, and competes with Microsoft's Xbox 360 and Sony's
PlayStation 3. Technologically, the Wii has some distinguishing features: the console has a
wireless controller, (the Wii Remote), which can be used as a handheld pointing device and
detect movement in three dimensions. These innovative features enable the playing of
traditional sports like tennis and bowling as if the player were on a tennis court or in a bowling
alley. Another distinctive feature of the console is WiiConnect, which enables it to receive
messages and updates over the Internet while in standby mode. Additionally, the DS Lite
offers a completely different approach to gaming. However, only part of the Wii’s success can
be attributed to the design features of these products.
The other key part of the success was the segmentation strategy. Nintendo aimed the Wii at
a different target audience than its competitors and this strategy put it in front of the
PlayStation 3 and Xbox 360 in terms of worldwide sales. It was just over three years ago,
when Nintendo’s marketing director, suggested that the business could expand by looking for
underserved segments, where the company could sell new products and develop new
markets. The underserved markets, which the marketing team identified, were to include
more women and families. This was a rather radical suggestion and thought unlikely to work.
For a few years console gaming had been moving beyond the teenage boy's bedrooms but
none of the other major market competitors had even considered targeting women or families.
Nintendo decided to stop attempting to catch up with its competitors and target this
completely new market. It initiated a so-called "blue ocean" strategy - the ideas of creating a
market where previously there was not one1. This new targeting strategy stemmed from the
realisation that "the current waters" (the 15- to 30-year-old males) traditionally targeted by the
games industry were "over-fished", and that there was a vast, untapped opportunity in the
neglected female and older male segments. The big question for Nintendo was: did this
target market really want games consoles? Pursuing this strategy was a huge risk - going to
a new market, with a new product which, if it was wrong, could seriously damage the
company’s market position and reputation with existing customers.
The benefits of segmentation
1 Barrett, L. (2009) 'Blue ocean' thinking can create waves, Guardian Media, pg. 8, February 2.
However, if this strategy paid off Nintendo has a lot to gain. If the products fulfilled the
customer needs effectively then the company could expect enhanced profitability and better
marketing communications. Satisfied customers would become loyal customers, so if
Nintendo could get this new target market on board then the company also had the
opportunity to retain these customers and build a more stable target market. Furthermore,
success could bring further opportunities for growth, expansion, and domination of the new
segment.
The reality was that it took Nintendo a while to get the communications right for the new target
segment. For the launch of the Brain Trainers, they used Nicole Kidman in the UK, which
created plenty of press coverage but did not work with the target audience. Reportedly,
Kidman is so far beyond Nintendo's target audience and she didn’t ‘gel’ with them, so they
brought in Zoë Ball and her father Johnny, the Redknapps, Girls Aloud and Fern Britton.
These celebrities communicated the right message: they made the DS and Wii seem a lot
more accessible. The adverts worked and there was an added benefit that gaming's
previously antisocial image was improved.
Unintended consequences
Nintendo was keen to ensure that non-traditional gamers would understand how easy the Wii
console is to use. A big part of the success was the spontaneous proliferation of ‘Wii parties’,
where groups get together for a night of Wii sports and games. These Wii parties started
without any promotional prompting from the company but Nintendo acted quickly to ensure
the maximum benefits. Recently, Nintendo partnered with website Evite to create a series of
invitations, and on its site (http://www.evite.com/) the company has added a downloadable
party pack of posters, door-hangers and medals to accompany party nights. Wii gaming is
not restricted to the home - reportedly it has been causing quite a stir on Norwegian Cruise
Line vessels, where cruisers of all ages line up for the daily tournaments.
Crucially, Nintendo has maintained its core gaming audience, while turning a couch-potato
pastime into a full workout. Sony and Microsoft, unsurprisingly, are also trying to enter the
market. Microsoft launched a pre-Christmas campaign aimed at making its Xbox appear more
family-orientated. But Sony and Microsoft are going to have to come up with more than a
creative advertising strategy if they want to expand market share. Indeed, they have to
rethink the entire marketing strategy, not just commission more sexy or controversial adverts
to catch Nintendo.
Where is the next blue ocean for Nintendo?
Medical health aid for the elderly - Researchers in Aberdeen believe that the Wii games
console could help the elderly with balance problems. Medical health specialists have said,
"Falls are the most common cause of accidental injury in older people and the most common
cause of accidental death in 75-year-olds and over”. Furthermore, they cause many ongoing
problems as they can lead to loss of confidence and a fear of falling, which can reduced the
quality of life and even bring on early death2. A university study is looking for people aged
over 70 to take part in a new study using the Nintendo Wii Fit's balance board. The study is
calling for people who have fallen in the last year to attend twice-weekly sessions over a 12
weeks period. Volunteers will try aerobics, yoga and balance games to see whether the
console can help improve their balance.
Health and fitness for all - Nintendo is about to release its latest fitness gadget, which it
hopes will repeat the success of the Wii Fit game. The new game is called Walk With Me. It
uses an electronic pedometer which players carry around to count their steps; the key fobsized
gadget then uploads the data to a handheld console. Players earn points in the game
depending on how far they have walked during the day, and can set targets for themselves.
There is an element of competition as players will be able to compete against family and
friends to see who has walked the farthest. Scores can be uploaded to a website, where
activity levels can then be compared with other players around the world. Reportedly, the
record is held by a dog in Japan.
Nintendo is aiming the Walk With Me at a very wide audience: people from nine to 95. The
success of Nintendo's Wii has shown that turning exercise into a game really can work, and
Walk With Me is an excellent evolution of the idea. Like the Wii, it is simple to set up, and
easy to use: all the user has to do is put the activity meter in their pocket and forgetting about
it. By the end of the day, it is quite exciting to see how far the player has walked and for
anyone with a competitive edge they will soon be hooked and end up playing against family
members. For a parent trying to convince their child to exercise, or anyone who feels they
should be doing more, Walk With Me is an excellent way to make exercise a little more fun.
Nintendo has engaged in innovative marketing thinking and in doing so come up with a
strategy, which has taken it to the forefront of the market and completely repositioned console
gaming.
Questions:
1) Explain the main reasons for segmenting a market.
2) Nintendo has identified two new target markets. Discuss the segmentation criteria,
used to identify these markets.
3) Discuss the benefits of segmentation in general and the specific benefits to Nintendo
FIND OUT MORE ABOUT NINTENDO'S MARKET SHARE,
THE TOTAL VOLUME OF THE GAMING INDUSTRY, NINTENDO'S COMPETITORS
The Wii: A Marketing Revolution in Gaming?
In October 2007, Nintendo's two console games platforms, the handheld DS Lite and the Wii,
were leading the market (valued in excess of $10 Billion) and outselling competitors such as
Sony's PS range and Microsoft's Xbox 360.
The Wii is a home video game console, designed and released by Nintendo. The console is
a seventh-generation console, and competes with Microsoft's Xbox 360 and Sony's
PlayStation 3. Technologically, the Wii has some distinguishing features: the console has a
wireless controller, (the Wii Remote), which can be used as a handheld pointing device and
detect movement in three dimensions. These innovative features enable the playing of
traditional sports like tennis and bowling as if the player were on a tennis court or in a bowling
alley. Another distinctive feature of the console is WiiConnect, which enables it to receive
messages and updates over the Internet while in standby mode. Additionally, the DS Lite
offers a completely different approach to gaming. However, only part of the Wii’s success can
be attributed to the design features of these products.
The other key part of the success was the segmentation strategy. Nintendo aimed the Wii at
a different target audience than its competitors and this strategy put it in front of the
PlayStation 3 and Xbox 360 in terms of worldwide sales. It was just over three years ago,
when Nintendo’s marketing director, suggested that the business could expand by looking for
underserved segments, where the company could sell new products and develop new
markets. The underserved markets, which the marketing team identified, were to include
more women and families. This was a rather radical suggestion and thought unlikely to work.
For a few years console gaming had been moving beyond the teenage boy's bedrooms but
none of the other major market competitors had even considered targeting women or families.
Nintendo decided to stop attempting to catch up with its competitors and target this
completely new market. It initiated a so-called "blue ocean" strategy - the ideas of creating a
market where previously there was not one1. This new targeting strategy stemmed from the
realisation that "the current waters" (the 15- to 30-year-old males) traditionally targeted by the
games industry were "over-fished", and that there was a vast, untapped opportunity in the
neglected female and older male segments. The big question for Nintendo was: did this
target market really want games consoles? Pursuing this strategy was a huge risk - going to
a new market, with a new product which, if it was wrong, could seriously damage the
company’s market position and reputation with existing customers.
The benefits of segmentation
1 Barrett, L. (2009) 'Blue ocean' thinking can create waves, Guardian Media, pg. 8, February 2.
However, if this strategy paid off Nintendo has a lot to gain. If the products fulfilled the
customer needs effectively then the company could expect enhanced profitability and better
marketing communications. Satisfied customers would become loyal customers, so if
Nintendo could get this new target market on board then the company also had the
opportunity to retain these customers and build a more stable target market. Furthermore,
success could bring further opportunities for growth, expansion, and domination of the new
segment.
The reality was that it took Nintendo a while to get the communications right for the new target
segment. For the launch of the Brain Trainers, they used Nicole Kidman in the UK, which
created plenty of press coverage but did not work with the target audience. Reportedly,
Kidman is so far beyond Nintendo's target audience and she didn’t ‘gel’ with them, so they
brought in Zoë Ball and her father Johnny, the Redknapps, Girls Aloud and Fern Britton.
These celebrities communicated the right message: they made the DS and Wii seem a lot
more accessible. The adverts worked and there was an added benefit that gaming's
previously antisocial image was improved.
Unintended consequences
Nintendo was keen to ensure that non-traditional gamers would understand how easy the Wii
console is to use. A big part of the success was the spontaneous proliferation of ‘Wii parties’,
where groups get together for a night of Wii sports and games. These Wii parties started
without any promotional prompting from the company but Nintendo acted quickly to ensure
the maximum benefits. Recently, Nintendo partnered with website Evite to create a series of
invitations, and on its site (http://www.evite.com/) the company has added a downloadable
party pack of posters, door-hangers and medals to accompany party nights. Wii gaming is
not restricted to the home - reportedly it has been causing quite a stir on Norwegian Cruise
Line vessels, where cruisers of all ages line up for the daily tournaments.
Crucially, Nintendo has maintained its core gaming audience, while turning a couch-potato
pastime into a full workout. Sony and Microsoft, unsurprisingly, are also trying to enter the
market. Microsoft launched a pre-Christmas campaign aimed at making its Xbox appear more
family-orientated. But Sony and Microsoft are going to have to come up with more than a
creative advertising strategy if they want to expand market share. Indeed, they have to
rethink the entire marketing strategy, not just commission more sexy or controversial adverts
to catch Nintendo.
Where is the next blue ocean for Nintendo?
Medical health aid for the elderly - Researchers in Aberdeen believe that the Wii games
console could help the elderly with balance problems. Medical health specialists have said,
"Falls are the most common cause of accidental injury in older people and the most common
cause of accidental death in 75-year-olds and over”. Furthermore, they cause many ongoing
problems as they can lead to loss of confidence and a fear of falling, which can reduced the
quality of life and even bring on early death2. A university study is looking for people aged
over 70 to take part in a new study using the Nintendo Wii Fit's balance board. The study is
calling for people who have fallen in the last year to attend twice-weekly sessions over a 12
weeks period. Volunteers will try aerobics, yoga and balance games to see whether the
console can help improve their balance.
Health and fitness for all - Nintendo is about to release its latest fitness gadget, which it
hopes will repeat the success of the Wii Fit game. The new game is called Walk With Me. It
uses an electronic pedometer which players carry around to count their steps; the key fobsized
gadget then uploads the data to a handheld console. Players earn points in the game
depending on how far they have walked during the day, and can set targets for themselves.
There is an element of competition as players will be able to compete against family and
friends to see who has walked the farthest. Scores can be uploaded to a website, where
activity levels can then be compared with other players around the world. Reportedly, the
record is held by a dog in Japan.
Nintendo is aiming the Walk With Me at a very wide audience: people from nine to 95. The
success of Nintendo's Wii has shown that turning exercise into a game really can work, and
Walk With Me is an excellent evolution of the idea. Like the Wii, it is simple to set up, and
easy to use: all the user has to do is put the activity meter in their pocket and forgetting about
it. By the end of the day, it is quite exciting to see how far the player has walked and for
anyone with a competitive edge they will soon be hooked and end up playing against family
members. For a parent trying to convince their child to exercise, or anyone who feels they
should be doing more, Walk With Me is an excellent way to make exercise a little more fun.
Nintendo has engaged in innovative marketing thinking and in doing so come up with a
strategy, which has taken it to the forefront of the market and completely repositioned console
gaming.
Questions:
1) Explain the main reasons for segmenting a market.
2) Nintendo has identified two new target markets. Discuss the segmentation criteria,
used to identify these markets.
3) Discuss the benefits of segmentation in general and the specific benefits to Nintendo
FIND OUT MORE ABOUT NINTENDO'S MARKET SHARE,
THE TOTAL VOLUME OF THE GAMING INDUSTRY, NINTENDO'S COMPETITORS
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