Nintendo’s Wii U Marketing Case Study Wii U launch: make or break for Nintendo Three years ago, Nintendo was king of the $78 billion videogame industry. The Wii was a smash hit and Nintendo’s DS hand-held was the best-selling portable gaming device. But a series of stumbles—a lukewarm debut for Nintendo’s 3DS hand-held game player and a sharp decline in Wii sales—raised questions about whether the company is on the wrong side of a generational divide.
Nintendo has refused to veer from its tried-and-tested formula of creating dedicated videogame machines, passing up a potentially lucrative opportunity to apply its game-making prowess to billions of smartphone and tablet users.
In packing more technological muscle, Nintendo aims to win over the core gamers who never fully embraced the motion-sensing games of the original Wii. Nintendo started dabbling with the concept of a game machine with a second-screen controller in 2009.
At the time, the Wii was still selling well, but Nintendo executives saw its broader reach as a living room hub limited because it required the Wii to monopolize the family’s TV when it was in use.
The wireless controller can function separately from the television, so a person can continue playing a game on the GamePad when someone else is using the TV. It only works within close proximity to the console, so the controller isn’t meant to be a portable device outside the home. To push the idea of making the controller a key device in the living room, Nintendo built in a Web browser and video chat capability.
The company also added a remote control function that works with video recorders, set-top boxes from cable and satellite providers, and online video services such as those from Hulu LLC and Netflix Inc. The tablet-style controller can also allow for games where one player has different information than the rest of the players (known as asynchronous gameplay). One of the early games Nintendo created that uses this function is “Nintendo Land: Mario Chase”—a videogame version of hide-and-seek.
In the game, the player controlling Mario holds the Wii U GamePad and enters the maze with a 10 second head start. With the GamePad controller, that player can see where all the other players are in the maze. Up to four other players try to catch Mario, but the chasers, looking at the TV, can only see the view straight ahead. Starting at $299, the Wii U packs high-definition graphics with a 6. 2-inch, tabletlike controller that offers a second screen in addition to the television display—a big change from the current generation’s more simple motion-sensing wand.
It is a pricey gamble: The cost of manufacturing the touch-screen controller, known as the Wii U GamePad, forces Nintendo to sell the machine at a loss, a trade-off to draw in a large base of consumers who will eventually buy the high-margin Wii U software. It is a common strategy in the industry, but one that Nintendo has tried to avoid in the past. 2013 Wii U Sales Look Dismal The challenge for Nintendo will be building on strong early interest. The company plans to sell 5. 5m units by March 2013, in line with initial sales for the console’s predecessor.
But at $299 for the basic package and $399 for the premium bundle, the Wii U is expensive. The problem is magnified because since the Wii’s debut, gaming has shifted on to handheld devices, particularly Apple’s iPhone and iPad along with dozens of models from manufacturers using Google’s Android software. This has created a market of almost 1bn devices on which games costing around $1, or are free, dominate – compared with $60 for many console games. The Wii U sold just 57,000 units in January, managing to up that number to 64,000 in February.
This is worse than any recorded week for the current-generation consoles (Wii, Xbox 360 and PS3). The Xbox was top of the hardware chart with 302,000. This is according to the latest NPD data. Wii U sold 3 million by the end of December – a decent launch that outpaced most others in recent history – but sales have since fallen off a cliff as the console has suffered an almost total absence of new releases. Overall video game sales are down 25% on where they were last February in the U. S. as the retail market continues to shrink.
But Nintendo won’t have the new home console market to itself for long. Both Sony and Microsoft are expected to announce new consoles next year, with a new Xbox rumoured for Christmas 2013. Wii U Doom And Gloom Continues, But For Nintendo Content Is King Numerous other complaints have also surfaced: the console’s launch-date third party games are not as good or as stable as they are on other systems. Games like Mass Effect 3 and Batman: Arkham City Armored Edition don’t run as well, and so forth. Furthermore, the 2GB of DDR3 memory in the system apparently have a max bandwidth of just 12. GB/s compared to much higher bandwidth on the Xbox 360 and PS3. Nintendo’s strategy going forward appears to be content, content, content. This means we may indeed see higher-powered (and possibly more expensive) systems from Sony and Microsoft, but Nintendo will have the jump on the competition in terms of both new content and a player base. Nintendo President Satoru Iwata adds: “No matter how great the numbers are that you can boast, can you only draw that out under certain conditions, or can you actually draw out its performance consistently when you use it?
Insisting on the latter way of thinking has always been at the root of hardware and system development at Nintendo. ” Most importantly, there was never really any indication from Nintendo that the Wii U would be a high-powered gaming device set to rival the PC. Nintendo never claimed they would outdistance the current HD systems in any revolutionary way. They’re sticking to a strategy that maintains hardware profitability and focuses on content they believe the Nintendo consumer base will enjoy, while attempting to reel in some new players with the Pro Controller and the increase in third-party content.
Nintendo has shown in recent years that it has a pretty good handle on what its customer base wants and how to deliver, although quite skeptical, it is always important and well warranted. Analysts should hesitate to write off the Wii U or its potential too soon. Sources: http://online. wsj. com/article/SB10001424127887324595904578120011485183202. html http://www. ign. com/articles/2013/03/15/2013-wii-u-sales-look-dismal http://www. guardian. co. uk/technology/2012/nov/29/wii-u-launch-uk-nintendo
Cite this Nintendo Case Study
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