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How Wii Is Creaming the Competition
CNN has a report on the Wii's success in the games marketplace right now, referring to their sales dominance as 'creaming the competition'. The article tries to break down exactly why Nintendo's console has sold so successfully, discussing the system's marketing, engineering, and philosophy. "Next, engineers settled on a new approach for the Wii's looks. Just as the DS shunned the Game Boy name to appeal to a broader audience, the Wii would adopt a sleek white exterior instead of the toylike loud colors used on the GameCube. Even CEO Iwata got involved in the design process; at one point he handed engineers a stack of DVD jewel cases and told them the console should not be much bigger. Why so small? To work with the motion-sensitive wireless controller Nintendo planned, Iwata reasoned, the console would have to sit directly beside the TV. Make it any larger and customers would hesitate to leave it there. " Their sales strategy is working in spades. CVG reports that at least one analyst thinks that Wii demand won't be met until 2009. This past weekend Chris Kohler had an interesting comment on the 'ambassador programs' Nintendo ran in advance of the Wii's launch, and how that might tie in to the system's financial success.
I'd have to say it's quite obvious. Nintendo is creaming the competition by selling more units then them...
The PS3 really bungled their launch, and they didn't provide any competion at all.
The Xbox360 marketed itself to "hardcore" gamers who spend all day playing, and has little appeal to casual gamers and the general public at large.
This left 80% of the market open for the Wii to sell to, and they effectively had no competition.
The Wii also has the advantage of being hit with supply problems. Nothing makes the average consumer want something more than knowing they can't have it. It's affordable, has some pretty good games out there at release, and is in short supply. It's a trifecta!
"It is a miracle that curiosity survives formal education." -Albert Einstein
...but I will buy an xbox 360 once Halo comes out. I'm pretty much still having fun with my OG xbox and could care less about cross-grading. Halo came out years ago man.Personally, I own both a 360 and a Wii, and while I've had tremendous fun with my Wii - especially over the holidays - I've recently found myself playing my 360 again. The lack of integrated multiplayer as well as the poor selection for Wii titles is making me start to regret my purchase, which is the last thing I want to do. Really, I've enjoy the Wii a lot so far, and I'm excited to see what developers will do to utilize this unique system, but if they don't start coming out with titles that aren't lousy ports from the other systems, I may find myself selling the poor thing. I could probably get double what I paid for it, too.
Blerg.
A few months ago, I would have said the challenge was getting new games for the Wii into the market. We're still in a bit of a drought (depending on your taste in games), but there's a lot in the pipeline. Game makers are switching over to support the Wii given it's new found popularity and growing market share.
Nintendo's challenge will be to produce enough units to meet demand without sacrificing quality. They were clearly surprised by the demand, and have been slowly ramping up production. They are at a production volume of 1 million a month, and ramping to 1.5 million / month.
[Insert pithy quote here]
Their sales strategy is working in spades. At least one analyst thinks that Wii demand won't be met until 2009.
And that analyst should be fired. I think it is much more likely that the Wii will be able to catch up to demand in 3 to 4 months. Right now there are 1000s of Wii consoles up on Ebay. So I feel some of the demand is a bit artificial due to people trying to make a quick buck.
What I find interesting is that the PS2 is outselling the Wii (of course, we don't know if the Wii would outsell the PS2 if it could increase its supply enough..it probably would). I mean, it makes sense because it has the largest library and still has great games coming out for it...but still...I don't remember this happening in the previous previous generation.
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The Wii is not a threat to the 360 because the only market segment that overlaps between the two is also the market segment that would not think twice at buying both. Nintendo and Microsoft strategically position their products to harm Sony, which tries to have (almost) as broad an appeal as the Wii and fails largely because of the price point, and tries to be as hardcore as the 360 and fails largely because of the lack of games. Both companies working together strengthens both their positions and damages their mutual competitor.
Rex is 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
This reminds me of how Palm succeeded where Newton failed. I liked the Newton, but Newton design was driven by a futuristic vision. Palm design was built around simple practical aspects of the user's experience, such as the utility of carrying the device around in a shirt pocket comfortably.
You'd think human centered product design would be a no-brainer, but clearly its harder to do than it sounds. It isn't just getting the details right, its being bold in choosing not to do things. Making shrewd decisions not to do things conventionally thought necesssary characterize the breakthrough designs of the Wii and Palm.
I think the reason that we see so few excellent product designs is that its hard to let go of preconceptions. So much of business runs on swagger.
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simple, fun games. The biggest names for the PS3 still arnt out, and people wont buy a consol on the expectaion of getting something worth playing later. The 360, while it does have some great games, is a bit of a one trick pony... playing to the hardcore, collage aged gamer with tones of time to play.
fun, quick games, reasonable price point, and finally doing something NEW has put the Wii on top.
the preceding post was not spell checked... suck it.
I'm curious about the Wii's software sales. Every non-gamer I know has 2-3 games...
1. Wii Sports
2. Wii Play
3. MAYBE one other game (usually Trauma Center)
The only reason they get Wii Play is it comes with the controller and you need to have at least 2 controllers for the Wii.
I also don't know any one that's bought more than 2 controllers.
So far the 360 seems to have great software sales - with a high number of games sold for every console out there.
The PS3 can't seem to sell consoles or software - but that's mostly because they have no real killer games out there driving sales for the system.
It'll be interesting in a year when the Wii has been out there and the non gamers either continue to play or get sick of Wii Sports/Wii Play and get rid of their Wii or if they'll actually end up buying more games and keeping their consoles. The 360 should continue with a step ahead in the number of 'great' games for a while, and once the PS3 starts getting more killer gamers, it'll be interesting if those sales go up or stay stale and behind that of the 360.
Repeat after me: "I, state your name, am NOT in Nintendo's target demographic."
You are most likely male, between the ages of 18 and 25. You are not who Nintendo wants to sell these things to. They want to sell to adults, with careers and families, who want to pick up a game to play for 20 minutes -- not hard core gamers. They want to sell to thirtysomethings (like me) who played NES, SNES, Genesis, Turbografix, etc. back in the day, and want to share the games they used to play with their children.
They want people who can pick up a game and have fun for the short amount of free time they have. It's hard to do that with an Xbox or PS* -- it's not fun getting pwned by some 12 year old with nothing better to do with his time than play Halo for 40 hours a week.
It shocks the hell out of me that they were the first ones to realize this market even exists.
... the rule that says all games have to be big budget extravaganzas which fail if they're not mega-blockbusters. Take a look at Wii Sports, Hazimete no Wii (sorry, don't know what the English version was called), or even the Wario game. These are not games with $20 million development budgets which have to sell hundreds of thousands of copies just to break even. Thus, they don't have to get bought by EVERYONE who owns the console -- even a slice of a slice of the gaming pie works for them. And if you look at the games-per-Wii attach rate rather than the sales-per-megahit rate, Wii is kicking some serious booty (probably has something to do with the fact that Wii + half dozen games is still cheaper than some of the other options). If there are five fun party games and everybody buys one to three, then each game individually sells a heck of a lot less than a system-making killer app like FFVII or Halo, but Nintendo still laughs their way to the bank.
Help poke pirates in the eyepatch, arr.
Nope. You can either do that or you can attract other customers and expand the market. It doesn't matter if the competition is getting the same absolute number of customers they would have anyway, as long as they're still getting relatively much fewer customers than you.
"[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz
"It shocks the hell out of me that they were the first ones to realize this market even exists."
Actually, I think Microsoft figured it out with solitare and networked checkers, but they just didnt' figure out how to make money at it.
...that most of the Wii's killer apps have been slated for a second half 2007 release or later. That includes Super Mario Galaxy, Metroid Prime 3: Corruption, and Super Smash Bros. Brawl, among other titles. Also, don't forget that Virtual Console games don't make it into the top ten chart but make up a good amount of sales for Nintendo, and that keeps users happy when a drought in genuine Wii titles occurs. As for the PS2's game earning the number 1 spot on the top ten list, it's more of a coincidence because development on it started before PS3 dev kits could be properly research and implemented, and yet its released after the PS3 hits the streets. Don't worry, this kind of thing won't be happening too often. It would've been the same situation with Final Fantasy XII if the PS3 and Wii were released in October.
for instance nintendogs for the DS. Fun for exactly 20 minutes then you find out thats it. No locked features, no extras, just more decoration. Wii Cooking mama.. can't do anything with those points just minigames. Wii Warioware.. minigames. Wii Rayman.. minigames. Wii sports. 20 min then meh. Lotsa of minigames nothing with meat except zelda. thankfully there is more variety in DS titles but my fear is they will abandon my market segment to do nothing but shallow mini-game collections.
I have a life and am busy too but I need a $40+ to entertain me for more then 20min.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
So you compare the MSRP, the price at retail, to a scalper's price. Now that's solid evidence. Try comparing apples to apples. 400 to 250, 62.5% of the price, or half the price of the PS3.
jX [ Make everything as simple as possible, but no simpler. - Einstein ]
That's interesting. I've sunk a whole bunch of time -- many, many hours -- into Wii Sports. Bowling especially! The nice thing is, I haven't sunk all that time at once. I've played for a while, done something in real life, come back, and so on. My fiancee and I play Wii Sports together, since it's a great game to play with someone who doesn't have as much video game experience.
Even if you want games that take longer, how about Zelda? Or Super Paper Mario? I think the Wii succeeds, because it hits all of these targets.
Being over 40 and not a gamer, I have zero interest in mastering one of those fancy pants controllers like the Xbox has. But I'd like to play games with my kids. It's no fun for you kid to race cArs with you if your continually driving it to the wall on level one, which is my forte. having tried it once I can see that while I'm still disoriented a bit, the wii controller gets you to a high and competitive level fast. I'd consider getting one so we could both enjoy it.
Some drink at the fountain of knowledge. Others just gargle.
The first to really profit from it was EA games with The Sims. It really tapped into an unexplored market and it paid off big time.
Speaking as a male, aged 32, with a career and a wife, I can say that I play my 360 MUCH more than the Wii. I still don't play a lot, as you rightly point out time doesn't allow it, but I'd rather play 20-30 mins of Crackdown or a few races of PGR3 than any of the Wii games I have so far. My wife likes the Wii, but that's because she's a Mario fan so she's currently hooked on Super Paper Mario. But I don't think she's even played any of the other games apart from Wii Sports which kept her interested for maybe 30 mins total.
We also play casual games on both platforms, but we both prefer the new games (like Boom Boom Rocket, Cloning Clyde, Zuma, etc) on XBLA much more than the old stuff on VC. I think if Nintendo opened the VC up to non-retro titles (maybe even homebrew as MS are planning to do with XNA) it could be pretty cool. Don't get me wrong, I loved paperboy as a kid, but it doesn't really do anything for me anymore.
So big up to Nintendo for selling all these boxes, I wish them well, but once SPM is done (few days now I'd guess) mine will be back gathering dust.
---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
Actually it is a somewhat valid arguement.
The Wii IS selling at those prices.
PS3's are not selling at a loss.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Every time the Wii is discussed, someone cracks a joke about "playing with his Wii", and there's much giggling. Combined with the hand gestures that arise from the new controllers, it's all one big phallic joke. And now it's "creaming" the competition. Lol. That's why.
The "cue the foo posts in 3, 2, 1..." posts will commence with no subsequent foo posts in 3, 2, 1...
Which has me baffled. The 360 is much LESS 'casual player' friendly than the Wii, Yet XBLA has much more Casual friendly titles than the VC. I have a Wii60 myself, and While the 360 has networked Hearts, Uno, Poker... Even Pac Man!... come on Nintendo where is the Sudoku game, or Dr. Mario, or Poker, or a 'Crossword Puzzle game' something, anything even universal staples like pacman / frogger would be great.
Personally, I love the classics on the VC, and I'm one of the few people I know who thinks they are fairly priced (IF you don't think Zelda: lttp, Donkey Kong Country or Gunstar heroes are worth $8 each you're crazy.), but what about say, my retired parents?
Nintendo has tapped a broader demographic of casual gamers, but what can they buy? Most of the games out now (at retail, and VC) are still catering to the hardcore...
Actually it would be 'Less than half' the price of a PS3. Since Sony discontinued the 20 gig model, the Wii is now ~42% of the PS3's price (and it comes with a game).
Nintendo still gets paid, but it's harder to establish a new line if sales are being lost to another platform (even your own).
Welcome to Sony's dilema. The PS2 needs to stick around because it's the only thing making them money right now, but its' longevity doesn't help the PS3 get adopted as a platform.
The success of the Wii isn't some esoteric nonsense. It's very simple: Nintendo built something that people actually want. Instead of listening to the very small demographic of the hardcore gamers and hardcore developers whose world revolves around frames per second, polygon count, pixel shaders and rendering pipelines, they asked themselves (and probably lots of other people) what Joe and Jane want in a gaming console.
So what do Joe and Jane want? Fun, something to play together and with friends, something that's easy. Gameplay first, killer graphics second.
And the thing is: Most of what Joe and Jane want also appears to Harald Hardcore. A fun game simply is a fun game, and even if you could code better graphics yourself on your overclocked PC, it still is a fun game.
And that's the hard part: Coding is the easy part of game design. Making a good game is the hard part. Always has been. Maybe that's why so many PC and Xbox and PS3 titles try to sell on their graphics alone.
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I have figured out the secret to the success of the Wii. Women like it. People have been talking about the elusive "woman gamer" for some time. Nintendo finally found them. Last weekend some guys from my office went to a party that featured a Wii. They played various Wii games with a group of woman until past midnight. One guy even scored. That would not have happened with an Xbox 360 party.
Sorry, the Wii invented its market and it is completely separate from that shared by the next-gen consoles. The Wii's market is the cheap family - especially any parent who thinks the Wii is going to be an exercise machine. Sony and Microsoft's strategies have very, very little focus on families.
Saying the Wii is blowing away the "competition" is sort of like suggesting that the Honda Accord is dominating Corvette and Porsche.
Interesting:
The PS3 is selling for about $500 each, and has sold 3.16 million units worldwide (according to vgcharts) making back roughly 1.58 billion dollars.
The Wii is selling for about $250 each, and has sold 6.54 million units worldwide (according to vgcharts) making back roughly 1.635 billion dollars.
The 360 is selling for about $400 each, and has sold 9.68 million units worldwide (according to vgcharts) making back roughly 3.872 billion dollars.
Looks like X-Box 360 is creaming the competition currently, in both money recouped in hardware sales (at a lost), and units sold.
Meet new people, and kill them.
I can't believe I'm replying to this, but that's exactly what he was saying... you see, he turned the tense and the subject around. Instead of saying the Wii is creaming its competition, he said the PS3 is getting creamed by its own competition. His point was that the PS3 is getting creamed by XBox/Wii more than Wii is creaming XBox/PS3.
At least, that's how I read it.
Where do you live, and what do you charge for shipping???
As a rule, I never trust dark brown ketchup.
there's nothing that makes me happier than to see early adopters of any console complain about the games selection.
It's even more interesting when you factor time in
The 360 has been on sale for 18 months
The PS3 and Wii have been on sale for 6 months
The Wii has sold about twice as much as the PS3 in about the same amount of time
The Wii has sold about 2/3 as much as the 360 in about 1/3 of the time.
If nothing dramatic changes the Wii will be the best selling next-gen console by the end of the summer. Of course Halo 3 and GTA 4 could very well kick start the HD console sales in the fall. Either way, Xmas 2007 is when the first real battle of this generation will take place.
"I've sunk a whole bunch of time -- many, many hours -- into Wii Sports. Bowling especially!"
What he said. I'm still playing Wii Sports to this day, usually 4 or 5 times a week. My bowling skill score keeps fluctuating around 980-1050, and I'm still working how to bowl strikes more consistently to raise it. Anyone who says Wii Sports gets dull after 20 minutes is talking out of their posterior.
And another fun long-playing Wii game that gets overlooked is Excite Truck. It takes a damn long time to S-rank all of the tracks in Mirror Mode (and unlock the final unlockable). Too many folks, however, simply win a few races and mistakenly assume they can "beat" the game in a few hours...
--R.J.
Electric-Escape.net
Case in point: I was at my parents house having dinner when my 57 year old mom said "I really like those Nintendo Wiis. I think I'll buy one." My jaw about hit the floor. Here's someone who has never played a video game for more than five minutes in her life talking about dropping $250 on a console. I asked her why she liked it, and she said that it wasn't just sitting in front of a screen, that it would help her stay active. She's worried about osteoporosis and gaining too much weight.
Let me summarize for those who don't get it: A grandmother who is almost sixty wants a Wii. There are at least as many of them in the world as hardcore gamers, mostly because the hardcore gamers live in their basements.
For what it's worth, I'm a 25-year-old male, but not a hardcore gamer. I get about 1 hour a day of downtime, which is split between the Web and TV. I'd like to buy a Wii, but I have to save some money since my wife and I are having a kid in October. So I'm going to stick with my NES I picked up at a yard sale for $20 along with about 80 games. That is, unless they release Guitar Hero 2 for the Wii.
I'm in the hole of the broadband donut.
From what I understand of the book "Blue Ocean Strategy", this is what Nintendo did to position themselves back on top of the gaming market. Instead of playing in the same "Red Ocean" as the PS3 and Xbox360, they decided to create a different market niche which hadn't been developed (i.e. older gamers, less hard core gamers, even people who hadn't gamed before). They realized they could target this niche with a lower price point and could give up the fancy graphics if they concentrated on simple fun games. The Wii is the result. It means that they have little, if any, competition in their target market, which means they don't really have to compete on price - they can charge enough to make the product profitable, and the customers will pay because there's nothing quite the same to compare it against.
That's why the Wii is beating Sony and Microsoft.
"I have never let my schooling interfere with my education." - Mark Twain
In all seriousness, my local EB Games (they still haven't converted to GameStop up here in the frozen north) has 8. The game rental chain (Microplay) has 3. Not to say they're not selling - I only finally managed to get one a few weeks ago - but they seem to be over the hump as far as supply/demand are concerned.
Godless heathen.
I believe you meant to say "How Wii Are Creaming the Competition"
Wow. I have read a lot of weird car analogies on slashdot, but nothing quite like this.
Now, if you'll excuse me, I've got some idea balls to remove from a manatee tank.
It is amusing that when someone sees the NPD for March of 259k systems sold for Wii, some people try to create weird explanations...
-Sudden production problems!
-Nintendo artificially holding them to drive up demand!
-Nintendo artificially holding them because of the end of the fiscal quarter!
And so on.
But instead of focusing on the NPD numbers, take a step back and examine the GLOBAL sales for the Wii. While shipments of Wii DROPPED in North America during March, is that true for the entire world? No. In fact, an INCREASE of Wii systems were shipped to Europe (who has been severely undersupplied so far).
Why on Earth would Nintendo allocate more Wii systems for Europe? And why would Nintendo choose March of all months to do this?
It was because the Playstation 3 was launching in Europe in March.
More Wii systems were sent to Europe to, obviously, not lose any Wii buyers to the PS3 launch craze. Now that the PS3 launch is over, the unit allocation will probably return back to what it has been.
BTW, the Wii sales rate is faster than any other console made. Ever. Why do people keep saying Nintendo is "holding back" or "not producing" them?
What should be looked at is global sales rather than just sales in America (what is next? Are we just going to examine sales in a single state?). Xbox 360 is bombing hard in Japan and in most of Europe (outside the UK). PS3 got outsold by the GBA this month in America, is consistently selling around 14,000 a week in Japan at the same level the six year old PS2 is, and is already four million behind the Wii. It is obvious that the PS3 will probably never catch up to the Wii and that the Wii will overcome Xbox 360 worldwide sales in a matter of months, not years.
Some say that GTA 4, Halo, and Final Fantasy 13s (plural) will rocket the PS3 and Xbox 360 to heights unknown. Halo 1 and Halo 2 managed to get the original Xbox to barely outsell the Gamecube. Two GTA games didn't resurrect the PSP. And Final Fantasy isn't as big as it used to be as sales peaked around 8 and have been steadily declining.
Old franchises (unless they are totally re-invented) are never killer apps to future generations. The killer apps of this generation will be new games that come out of nowhere. It was Nintendogs, not Mario Kart, Brain Age, not Tetris, that shot the DS to the stratosphere. And the reason why the Wii is popular now is not Zelda but Wii Sports.
Anyway, a candid examination of global sales will reveal only a change in allocation of units, not a decrease in shipping or production.
It is more likely the PS3 and Xbox 360 can co-exist. Both have similiar philosophies with the systems and both place emphasis on graphics. Both share multi-platform games.
The Wii is a classic use of 'disruption' technology. A disruption occurs when a cheaper product introduces new technology to make doing the current job (of what the industrys' products are supposed to do) easier and/or better. The 'disrupted' products end up shriveling up in the marketplace. (Did the DS disrupt the handheld market? Is the PSP co-existing nicely with the DS? Rather, PSP got a price drop and is fighting for its life. How is this happening if DS was no threat to it?)
If the Wii continues to sell and sell, then the Wii-mote becomes the standard controller for video games. If the Wii keeps on selling, then the Wii will be seen as THE defacto standard video game system and the Xbox 360 and PS3 will be seen as ancient systems. A disruptive technology can be very nasty and literally change the landscape of the market.
Why did the PS3 get so much flak when it was launched? Probably because the PS3 launched at the same time as the Wii so the mainstream press and the market compared the two (and they slammed the PS3). Even now, the Xbox 360 is coming under increasing scrutiny. Microsoft is lowering shipping forecasts (360 sales did drop).
If the Wii is massively successful, then the PS3 and Xbox 360 will be hurt and the future of the console-as-meda-top-box will be essentially dead. The Wii is exactly in the position where the NES was twenty years ago. The NES disrupted the marketplace on such a scale that game centric computers got cut off at the knees. The NES pad replaced the joystick and gaming returned to the TV and away from keyboards and monitors.
Here's an example: do you think most people will want to play tennis games on the Xbox 360, PS3, or Wii? The answer is Wii because Wii Tennis re-defined video-game tennis. What about bowling? What about golf? Etc. etc. Soon, the Wii will 'alter' most game types and it will appear that Wii is the superior system for them (such as with tennis games). Most of the Wii stuff has, so far, been early launch or filler stuff, but the big stuff will come. What happens if Wii disrupts the FPS? What happens to Xbox 360 then? What if Wii disrupts all sports games and many action games?
Wii will become a massive problem to Sony and Microsoft, but I don't think they realize it yet.