Brand Health Check... Wii needs to prove it can be more than just a fad

Since then, the motion-sensing console has been one of the gaming industry’s big success stories, transforming the fortunes of Nintendo and expanding the audience for gaming beyond its young male core.

But even the Wii’s growth couldn’t go on forever. Nintendo recently announced that sales of the console had gone down 43 per cent in the first half of this year compare to 2008. For the first time in six years, Nintendo projected a dip in the company as a whole, estimating a 23 per cent cut in profit this year.

At the same time, the Wii is up against resurgent competition. Sony’s PlayStation 3 (PS3) saw 134 per cent sales growth in September. PS3 finally managed to outsell Wii in that month.

Wii is still considered a phenomenon in the gaming industry. CEO of Nintendo Satoru Iwata specifically designed the console to appeal to a wider demographic and ‘getting new people to play’ is the brand’s mantra.

The console has also gained support in the medical industry with the University of Medicine and Dentistry of New Jersey seeing Wii as a complement to physical therapy. The fitness angle helped spur sales among women and retirees.

Nintendo spent US$200 million to debut Wii with the ‘Wii would like to play’ campaign by Leo Burnett in 2006. The product’s success kept building as it became a word-of-mouth hit. Wii peaked in yearly sales in 2008, with 24 million console sold worldwide.

Nintendo’s strategies to maintain momentum include releasing a ‘cooler’ black console. (Rumours that it was planning an HD Wii turned out to be false.) But one of the biggest problems facing the brand is a lack of software titles to drive hardware sales. With the festive season fast approaching, Nintendo is banking on the recent release of New Super Mario Bros Wii to spark a resurgence. Will it be enough?

Cairo Kenan Marsh, business director, RAPP Tokyo

“Considering the economy, the downturn in Nintendo profits seems completely understandable. But when you compare Nintendo to its competitors, there are challenges that should be addressed.

The first is platform. Nintendo has focused on user experience, while Sony has focused on platform versatility. The PS3 does more than play games - its much-praised Blu-ray DVD player is a key feature. So when both PS3 and Wii cut prices this year, Sony offered broader value to consumers.

The second challenge is positioning. Wii is the ‘game console for everyone’, which is part of the reason why Nintendo leads the market. The downside is that Nintendo attracts a higher percentage of casual gamers than Xbox or PS3.

The challenge going forward will be that by having a higher percentage of casual users, Nintendo will be more vulnerable than its competitors to emerging mobile gaming platforms like the iPhone and Android. The availability of SDKs (software development kits) for those platforms gives them a better ability to surf the gaming long tail and offer the masses low-price games, which will leave high-priced console consumption to the committed gamer or to the household as a multi-use technology.”

Dave McCaughan, regional strategic planning director, Asia-Pacific, McCann Worldgroup

“It was never a game console. It was a total lifestyle change. Doctors in Japan have prescribed it to people on the edge of diabetes and obesity. Retirees have had their apartments remodelled to fit their favourite Wii sport.

And maybe there lies the rub. What exactly is Wii? A fitness hit? Or another in a long line of quick fixes: Billy’s Bootcamp, banana diets and Wii Fit? No doubt it broadened the game console market. Some referred to it as the first real mass virtual reality experience. But then as a 12-year-old explained to me: ‘Any good game is virtual reality. I don’t have to be really moving to move.’

So a lot of people have bought it, tried it and either moved on or stayed tuned. But what is it that will drive people to re-purchase? That is the secret of fad entertainment today. And isn’t that the world Nintendo plays in? Getting enough noise to create a ‘must have that’ sensibility and then once people ‘have it’ finding ways to get them to want a new version?

Sleek design is not a differentiator. Unique experiences are what matters. Where are the apps, the unique usage experiences and socialisation that we measure our technologies on today?”

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This article was originally published in 19 November 2009 issue of Media.