Third Place Is Fine By Nintendo

anaesthetica writes "The New Yorker writes that Nintendo is fine with third place. Between Sony and Microsoft both trying to build the most comprehensively next-generation console, and barely breaking even in their efforts [Zonk: Though that's changing for Microsoft], Nintendo has decided to go a different route. Wii doesn't have all the bells and whistles, but it focuses on simple fun playing games — a strategy which turns out to be much better for Nintendo's bottom line and stock prices. From the article: 'A recent survey of the evidence on market share... found that companies that adopt what they call "competitor-oriented objectives" actually end up hurting their own profitability. In other words, the more a company focuses on beating its competitors, rather than on the bottom line, the worse it is likely to do.'"

Comments

I've never owned a game console

[Anonymous Coward]

But I've become intrigued enough with the Wii to want to go check it out. If it is half as fun as it looks, I might even buy one. They seem to have delivered something novel enough in the control area to make me want to supplement my PC for gaming and at a reasonable price point instead of the total commitment the other consoles demand.

Re:Is Wii fun?

[Lane.exe]

The Wii doesn't have to keep going in the long term. The lifespan of a console as a platform for launching new games is under a decade. The Wii just has sell enough units itself to make it attractive for developers to keep producing titles, which it looks like it will, and the platform will live its life and then Nintendo is free to create a new platform for the "next-next-generation" of gaming consoles.

I have an Xbox 360, and will probably get a PS3 as well (Final Fantasy is too big of a draw for me to ignore it). I like my PS2, and I like my Xbox 360. They have certain games I want to play, and I enjoy playing them. That was enough to motivate me to buy the console. That's all the money that these companies are going to get from me, because from here on out, all I'm going to be buying is games. If the console is interesting enough to draw me in to buy at least one, then they've accomplished their job as a console manufacturer with regard to me. So the Wii needs to only hook people this once, and in doing so, ensures that it's profitable for developers to produce games for the next five or six years. Then, once the companies are ready to release new systems, if there are things we like and want to experience about these new systems, we'll pay out the money necessary to get them.

I'm actually quite impressed with Nintendo

[ObiWanStevobi]

Personally, I thought they were going to be the next Sega. When the announced the Wii would not be HD capable I figured they were dead in the water. But after pulling what felt like every muscle in my body playing Wii Sports with friends, I have to admit they will be the true winners of this round of console wars. They went with something different and concentrated on gameplay and really pulled it off. Kudos to them.

They made a console that not only appeals to the all-important 18-35 market, but is also going to be a favorite among parents for young kids becasue the games are mostly PG and they even get some exercise playing it.

However, I wouldn't trade my 360 for it. They pulled off an excellent product through innovative concept and gameplay, but I don't think this will dent the demand for the powerful graphics/complexity that true next gen consoles deliver. In its price range, I think the Wii is a healthy addition to have along with a 360 or PS3, but not so much a direct competitor to them among the 18+ crowd.

DDR + WII =

[Ingolfke]

Dancing with hand motions. Seriously... is someone developing this. It'll be huge in Japan.

Third place?

[Evro]

Third place by what metric? Units sold? If they're netting the most, doesn't that make them #1?

So companies work like people.

[porcupine8]

In other words, the more a company focuses on beating its competitors, rather than on the bottom line, the worse it is likely to do.

Interesting. Psychology studies have shown that when you compare people who have performance goals (focused on performing at a certain level to win outside approval or rewards, or avoid punishments) with those who have mastery goals (focused on mastering a task in order to learn, grow, reach personal goals, etc rather than to gain outside approval), the people with performance goals do much worse in the face of challenge. They adopt self-defeating behaviors and give up quickly, whereas the mastery-oriented people keep working at it and modify their strategies in useful ways.

I guess since companies are made up of a bunch of people, it makes sense that on some levels they work the same way as those people work. If they're focused on beating the outside competition, they falter, whereas if they're focused on improving themselves (even if that's profit-wise, since that's what's important to a company), they prosper.

Re:I find that amusing

[wolff000]

"So really, the biggest selling point of the Wii in this generation of consoles is it's "cheap" price, which is still $300!"

That point alone can cause record sales. Look at places like Dollar Tree everything is pretty much crap and not worth a dollar but they sell tons because it's cheap.

As far as graphics Nintendo stated from the beginning this was no where near the power house the other consoles would be. They focused on fun, which is what the other consoles should be doing.

I could careless if my console can play dvds and connect to my computer. The average household isn't going to use the computer connect functions anyway. I know lots of people with a 360 and only 2 out of the 20 or so use the media center functions. Most didn't even know it had them. The average consumer is rather slow and they don't read half the packaging and you can forget about the manuals.

I want a game sytem to play games not stream music. I have other devices for that. A game console should be just that for games. The Wii is something differnet which hasn't been done since consoles started they were all the same thing just better graphics. movement takes consoles one step closer to becoming all immersive.

Re:I find that amusing

[justinlindh]

I realize that the point has been beaten to death already, but I literally had to pry the controller from my Mom's arms over Thanksgiving break. She's never even played video games. I was only able to escape back home with my console after promising to bring it back when I visit for Christmas. My dad was a fan, too, and damned near broke a sweat throwing virtual punches at the TV during boxing.

Non-gamers love this thing. The intuitiveness of the controls makes it simple for anybody to pick up and enjoy. I've had friends over the last 3 nights to play the games with me. It's a fantastic social toy that I expect to take a significant chunk out of traditional board games. As such, I expect people who have never spent a dime on video games to seriously consider purchasing a Wii; they only need to experience it once to realize how much fun and engrossing that it is.

I also own a Xbox360, of which I also love and enjoy. I use each console for a different kind of game experience, and don't think it's uncommon for people like me to want both. It was easy for me, as a gamer, to justify the cost of the Wii60 over the cost of a single PS3. I don't imagine that I'm alone in this.

In other words, more casual/non-gamers will buy the Wii than the Xbox360/PS3. Some hardcore gamers will only buy the Xbox360/Wii. But there's also a market for people like me who choose to combine the two, and I see more people like me who wouldn't consider buying the PS3 and the Wii over the Xbox360 and the Wii due to the cost of the PS3. Due to these factors, I don't see how it's possible to forecast any real winner of the console wars yet. It's all fair game, and with Nintendo reaching new and untapped audiences, we shouldn't pen them in for third place just yet.

Re:Drucker said it first.

[MemoryDragon]

One difference Microsoft never invented, they are good at looking at markets and then enter them, it usually takes them five years and three attempts to push out the competition. At no time any innovation has happened during that time. Microsoft never was great at innovation but they used to be great at analyzing the competition and stealing their markets. The XBox360 is a second gen system, Microsoft usually goes for the third approach to get the market, so I rather doubt that they are in the game for making money now.

Re:I find that amusing

[Mitaphane]

When they say 3rd, I think what they mean (although they don't say it explicitly) is 3rd in the market of hardcore gaming, the people who live and die by videogames. I think you're right; Nintendo will be 1st or 2nd, because they are shooting for something else, a market that includes everyone, including hardcore gamers. Conventional thinking in the industry has been to pander to hardcore gamers and if they like it a lot, the rest of the market will follow. However this is ignoring a lot of people who are completely put off by a controlling a device that has 2 analog sticks, a d-pad, as well as 10+ other buttons. I was reading in the Economist where Iwata voiced his concerned about this ultimately leading to the demise of the industry, believing that there are existing signs of game industry shrinking in Japan. To use a choic quote from that article...

As it sets out to broaden the gaming population, Nintendo is not fighting against Sony and Microsoft, says Mr Iwata. Its real enemy is the indifference that many people still feel towards gaming. Of course, says Mr Iwata, he would be happy if Nintendo became the leading console-maker again as a result of its new approach. But a victory over Sony and Microsoft in a shrinking market, he says, would not be a victory at all.