On Nintendo And Marketing Myopia

Thanks to Nintendojo for their editorial discussing why Nintendo may be heading for a fall by branding itself a 'video game company', as opposed to Sony and Microsoft's wider goals as part of the "entertainment or technology industries". The writer points out: "Theodore Levitt introduced an idea called Marketing Myopia. To summarize the basic idea of his concept: in an industry where future growth seems guaranteed, a leading company will mislabel itself and ultimately lead to its own downfall." Apparently, the best historical example of this is the railroad industry, who "...labeled themselves as being in the railroad business and not the transportation business, limiting themselves and causing their own downfall." The writer concludes: "The industry has changed. Nintendo is no longer the biggest player in a relatively large niche market. They are in last place in a huge segment of the home entertainment sector, and they need to remember this fact, because no one needs another Amtrak."

Comments

real world problem, but applicable here?

[Alcimedes]

so they said they were a "video game company"

that's not a console only company. that's not a hardware company, it's not a software company.

the video game brand isn't exactly that restrictive. they can do software, hardware, etc.

if i want video games, i want video games. i don't want something that records tv, plays dvd's, answers the phone, does spreadsheets and whatever else.

i want a gaming machien to play games one. unless they are that 1 in 100 company that manages to get a product right that does 5 different things, they just cripple themselves with either inadequite hardware or tacked on afterthought "features".

total waste of my money to toss shit on there i don't want.

Re:real world problem, but applicable here?

[Mattcelt]

if i want video games, i want video games. i don't want something that records tv, plays dvd's, answers the phone, does spreadsheets and whatever else.

Absolutely correct. The railroad analogy is a poor one; Amtrak still makes millions of dollars a year, as do Union Pacific, Sante Fe and a host of other carriers - one can hardly call them unsuccessful. While rail transport is nowhere near the powerful money-making machine it was 150 years ago, that's simply because the market has matured and other technologies have filled niche portions of what used to be the rails' market more efficiently than the rails themselves could do it.

It is ALWAYS better to be a niche player in a specific market than to try to be all things to all people. It allows you to focus on those things you do best, and forces you to concentrate on your core business instead of spending resources on things you really know nothing about.

Nintendo is in no trouble from this decision. In fact, this decision will help them weather other things like bad management or adverse market conditions much more profitably than they might otherwise.

Re:real world problem, but applicable here?

[bigman2003]

You're kidding about the Amtrak part, right?

Amtrak receives billions of dollars (okay, actually 1.2 billion approximately) per year from the federal government. It is a subsidized service, because it cannot make it on its own. They had they highest number of riders ever, in 2003- but still, nobody cares.

Soon, (or recently) Amtrak is/was supposed to get off the federal tit. They said they would need to go bankrupt.

Amtrak should not be mentioned along with the other companies as a group comparison.

Nintendo to Sony isn't a worthwhile comparison.

[TRACK-YOUR-POSITION]

When you compare Apple to Microsoft, you start to think "wow, Apple really needs to get their act together--both sell operating systems, yet MS makes way more money." But if you compare Apple to Dell, (they both sell computers), Apple starts to look pretty damn good.

You're making the same mistake here--Nintendo is not a Sony that also makes games, instead Nintendo is a Capcom that also sells consoles. Sony and Microsoft are way the heck larger than Nintendo, and it's ridiculous to expect Nintendo to out-Sony Sony. Sony's model is to encourage other people to develop PS2 games so they can sell PS2s. Nintendo's model is to make gamecubes so they can develop Gamecube games.

Perhaps the future of Nintendo hardware is in question. But that's not a big problem, Nintendo can simply abandon its hardware side if it no longer makes any sense to keep selling hardware. In other words, take the Sega route.

Railroads

[Snowspinner]

Anyone who believes that the railroad industry has died should spend a night in my apartment, which has railroad tracks about 15 feet from my bedroom window.

Your lack of sleep will prove you wrong.

The railroad companies were very wise to declare that they're in the railroad business. It turns out that the railroad business was and still is a very useful business - huge amounts of US product are shipped via rail.

It turns out that although trains make crappy methods of transportation nowadays, (Planes do the transport to a limited number of points faster, and cars can go anywhere), they're still the best thing if you want to, say, move several tons of coal, lumber, etc. I mean, trucking is nice for some things, but, really, there are some things that railroads can do that no one else can do.

I think Nintendo offers a kind of game that no one else offers. When I pick up Zelda, or Metroid, or even one of their B-titles like Mario Sunshine, the game has a particular feel that other game companies don't match. I'm not sure what it is - I've hypothesized several times, but I'm never happy with the answer.

If I want to play a Nintendo-type game, though, the fact of the matter is that I need a Nintendo-made game. So, more than simply being in the video game business, I think Nintendo is in the Nintendo business. And I think that they're "who are you?" marketing, as odd as it is, is a conscious move in that direction.

Re:Me too, I'm sick of this

[AvitarX]

I thought the same thing as you.

I went to buy a game boy advanced, but for just a little bit more (99) I could buy a pportable system that was also and MP3 player, a cell phone, had network games, had blue tooth, could save games to a flash card. It was awsome.

wait, no. The nGage sucks ass. I have a diskman, I have a good cell phone. And I don't want to play lan games on the bus, dealing with assholes at work is bad enough.

I would also imagine that the saturation of DVD players is high enough that it is not a selling point. And I am skeptical that any console will have a PVR as good as Tivo's (unless they liscense from Tivo, that would be an add on I would want).

Today at Walmart (I lie it was Friday) they had cheapo DVD players for 30 dollors. The last DVD player I bought was good, and it still broke quickly, so cheapo is good enough now. I would also doubt that this all in one machine has anything it is good at (I no the multi function faxes suck) 80 dollors is a large premium on a 30 dollor device. the thought that the built in DVD meant anything past the first season is rediculous.