Brand Health Check... Nintendo embroiled in battle for Generation Y

Boosted in part by an invigorated product line, the Wii and portable DS consoles have brought the firm back to the forefront of gaming innovation and fanfare.

In April, the company made a profit of US$2.5 billion, on the back of $16 billion global sales from its consoles and game titles.

Its share price, however, dipped two per cent the day after the announcement of these figures.
Investors are wary about how Nintendo would be able to match, let alone exceed, its past year’s profits and how sales of its DS handheld units are expected to mature and stagnate, after being in the market for four years.

The video game developer is also struggling to meet global demand for the Wii, although 1.8 million units are currently being manufactured each month.

Since its launch in December 2006, the home video game console, which boasts motion-sensitive game play and targets a mainstream audience, has shipped 24 million units worldwide and 6 million in Japan alone - a record figure for its home market. But sales of the Wii have begun falling in Japan - down 4.6 per cent year on year between January and mid April. Its home country’s business performance is often seen as an indicator of how the video game firm fares for the rest of its markets.

The company currently lags behind Microsoft, which makes the Xbox 360, and Sony, which produces the PlayStation 3 (PS3), as the third-largest video game firm.

Microsoft boasted in May that its Xbox console has surpassed the Wii and PS3 to the 10 million sales mark in the US.

History has shown us that the first company to reach 10 million in console sales wins the generation battle, predicted Don Mattrick, senior vice-president at Microsoft’s Xbox division.

However, Nintendo is unperturbed by its rivals or possible dip in performance as accumulated sales of its DS and Wii products are still leading the handheld and home console categories.

Subodh Deshpande, strategic planning head, McCann

Nintendo has succeeded with the DS and Wii because, unlike its competition, it did not view the gaming business through the lens of graphic wizardry but through the eyes of human beings.

In fact, Nintendo approached an audience who traditionally avoided gaming, what with its insider codes and skill requirements. Nintendo knocked the walls of the ‘gaming’ world down and opened it to everyone from five to 95. Nintendo has arguably created a new, simple-to-use, social world of ‘playing’.

While PlayStation and Xbox games go deeper into imagination and dream states Nintendo brings games into the real world to create a sense of heightened play.

To keep on growing, Nintendo will have to stick to its ideology of simplicity, fun and ‘play’. Perhaps it can recreate the pleasure of outdoor community play.

Perhaps Nintendo can bring low cost play and learning to kids in emerging economies on TV. Or perhaps it can integrate mobile telephony and bring play into the life of the business traveller who can play with his kids on a ‘portable Nintendo Wii’. Ninendo can keep growing by integrating life into games and vice versa. The possibilities are endless.

Eric Chua, planner, Bates141 Singapore

In the past, Nintendo was the niche player to the PlayStation and Xbox. Today, it has completely turned the situation around - outselling the PlayStation 3 and Xbox 360 consoles.

Its recent success was founded on making video gaming, previously the domain of hard-core geeks, accessible to kids and adults alike.

Indeed, as Nintendo’s senior managing director Shigeru Miyamoto says, its games are designed for a broader appeal. Its many successes, include Brain Age on the DS and Wii Sport which comes bundled with every Wii unit.
Today’s time-starved casual gamers haven’t the patience to spend more than 40 hours completing a game. But they will spend 40 minutes swinging a Wii-mote with three of their friends - and have a laugh at how ridiculous they look.

They don’t care about 720p, Blu-Ray discs, or other techno babble. They just want to have fun.

Now that products, such as the Wii and the DS handheld that have connected with the masses, Nintendo should continue to build on the social success of its products.

This means developing new opportunities for consumers - at home, at the retail front, and perhaps even in pubs - to participate in its social gaming revolution.