Nintendo will need better casual games to continue their console war

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As most of you have no doubt read, Nintendo President Satoru Iawta is concerned that the Wii is in an unhealthy state, and that it is urgent for Nintendo to recover sales momentum. This statement, coupled with recent numbers confirming this sales drop, has left many to point the finger at Nintendo’s Blue Ocean Strategy, which disrupted the video game market by bringing a wider audience into gaming with casual titles, as the cause of this drop. They suggest that Nintendo needs to move away from this strategy and focus more on games for the core gamer to regain sales momentum.

I think that a shift away from the Blue Ocean Strategy of developing games for new audiences would be a mistake on Nintendo’s part. The decline in Wii’s sales does not prove that Nintendo’s Blue Ocean Strategy has failed. Rather, it illustrates how Blue Ocean requires constant innovation following the initial market disruption.

If Nintendo wants to see the return of explosive sales for the Wii, it needs to refocus the platform so that it is once again the home of innovative fresh titles that draw in the broader audience.

The Wii was successful because it offered something different

Remember that Blue Ocean Strategy is about creating new market space instead of competing in existing and crowded market space. Companies that create this new market space enjoy almost no competition, which allows for rapid and extremely profitable growth. These days, the video game industry is extremely crowded – a so-called “Red Ocean” where competition is high as companies fight over existing market share. At some point during the Gamecube era, Nintendo realized that competing in this Red Ocean wasn’t working out (maybe it was when they actually stopped manufacturing Gamecubes due to low demand) and that the best course for survival was to create new demand in a “Blue Ocean” by developing a radically different console that targeted a market distinct from their traditional competitors. By going after different audiences than both Sony and Microsoft in this round of consoles, the Wii has become Nintendo’s second best-selling console after just three years on the market.

The key to Blue Ocean Strategy is to innovate in a way that creates high value for the consumer for a low price. When the Wii was launched, the value to the consumer was that Wii provided more accessible, fun gaming than its higher-priced competitors. Much of the value for the expanded audience was tied to Wii Sports and Wii Fit and the fresh approach to gaming that Wii offered.  Returning to a focus on the core market at this stage in the console’s lifecycle runs contrary to the Blue Ocean Strategy. If Nintendo were to dive back into the Red Ocean of focusing entirely on core games to revive sales, they would undoubtedly lose, just like they did with the Gamecube and, to a lesser extent, the N64.

Core games will increase console sales, but only to a limited extent

I don’t want to downplay the role that core Nintendo franchises have played in Wii sales. The entries for Mario, Zelda, Metroid, Mario Kart and Smash Bros. have all been excellent, and contributed greatly to Wii sales since launch. When I look at the lineup that Nintendo has for core gamers in 2010, I am sure that Wii owners will be happy, but I’m not sure how these games will return the Wii to the explosive sales numbers it had in 2008.

I struggle to think of someone who will buy a Wii for Super Mario Galaxy 2 that didn’t already buy one for Super Mario Galaxy.  How many people passed on Metroid Prime 3 or the Metroid Prime Trilogy to buy a Wii for Other M? Don’t get me wrong – these games will likely be outstanding, they will sell well, and I am absolutely thrilled that they are coming out, but I’m not sure if these are system-sellers at this stage in the Wii’s lifespan. The target audience for these games likely picked up a Wii sometime between launch and late 2007.

I should be very clear here: I am not advocating that Nintendo give up on core games. These games are a critical part of the Wii’s userbase. The keep it diverse and interesting and are, quite frankly, my favorites. They also make Nintendo lots of money. What these games will do is serve the audience who complains that their Wiis are collecting dust, which is a very good thing, especially when consumers are considering whether or not to purchase Nintendo’s next console. Gamers who feel burned by a company will be far less likely to purchase their product. Look what happened to Sega.

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18 Responses to Nintendo will need better casual games to continue their console war

  1. Kannon says:

    I think it’s time for the Wii to take its place as a console that takes risks again and makes games that although may not sell, will one day be regarded as the greatest games of our times. The N64 and moreso the Dreamcast, did not reach the stars in sales, but the some of the games on those two systems are regarded as pivotal for the games that would eventually come. At this point in the game, its hard for any system by itself to have a game come out that everyone wants, (modern warfare 2 and final fantasy 13 are on 360 and PS3). Developing a games should not be about sales numbers, especially with how many games are out now, they should be about producing a fun and enjoyable experience, that’s pretty to look at and awesome to play. Unfortunately, sales are what keeps anything going, just wish it could be more about the art then the ability to sell.

    at least we have:
    sin and punishment 2
    no more heroes 2
    muramasa

  2. Quix says:

    I’ve been a Wii owner since launch day and have enjoyed the console immensely, but I have to admit it’s completely lost my attention. There’s just no compelling content right now. So I bought a PS3 (the new $299 price pushed me over the edge) and have been thoroughly enjoying it. Uncharted 2 is an incredible experience. I worried that the PS3 would not appeal to my young kids, but they’re loving Little Big Planet (as am I). And ModNation Racers (a serious Mario Kart contender) is on the way in 2010. Seems a single console *can* satisfy both families and hardcore gamers. Nintendo is really dropping the ball by trying to milk the Wii hardware long past its expiration date. And that makes me sad. I had really hoped for a hardware revision for this holiday season, but Nintendo apparently thinks it can go one more year (or more) with its last-gen hardware. But the way the visuals look on my new 58″ plasma, I doubt the little fella will be seeing much play time at my house any longer.

    It pains me to say it, but…Wii who?

  3. InvisibleMan says:

    Let’s be honest, the Wii had a good run already: 8 years, considering that its hardware is very close to the GameCube’s. That is a very good run for a console! And hardware DOES count, now that price is not the competitive element that it was before in the console wars…

  4. Zac Erickson says:

    It really is those semi-casual games that drive sales. I, for one, am totally pumped for New Super Mario Bros Wii, and I think that game will be one of the holiday season’s top sellers (aside from Modern Warfare 2, that is). Like you said, its the bridge games that sell units. The games that both hardcore and casual gamers can get behind.

  5. Used Cisco says:

    It’s simple. They need more great games. Hardware is irrelevant, as it always has been. Make the games and you’ll see the sales. Period.

    Don’t get me wrong, I LOVELOVELOVE new console launches and hardware upgrades, but that’s not the problem. The problem is lack of AAA quality content on the system. That’s not to say there are NO games, just that there are very few games that are getting big coverage the way Wii Sports did, or Wii Fit, or the upcoming NSMB Wii. This holiday season is all about big name HD games. Nintendo needs to get media attention back with some major titles. It’s clear that third parties simply refuse to do it.

  6. Watire says:

    I will back Cisco there, I see no point in lamenting that Nintendo can’t convince new customers since it can’t satisfy current owners.
    It seems to me emulation to purchase comes from the experience seen somewhere. New Super Mario Bros. Wii is easy to show in stores and to be enjoyed by bystanders. Then it surely will be a riot in household during the holidays. I can imagine a steady surge of sales after christmas eve selling some console in the way.
    I will like analysts to reckon a little more that the expanded audience has more choice than just gaming to spend their dollars on. If Microsoft and Sony thought that gaming was that central to everybody’s life, they wouldn’t try to sell their ware as everything but gaming machine.

  7. Charles says:

    My humble opinion is that the only way to sell more wii consoles is with exclusive titles and good ones, doesn’t matter if they are first or third party, doesn’t matter if they are casual or hardcore, the only thing that matters is they have to be good ones.

  8. Eolirin says:

    I think this is a pretty sound analysis. Massive props.

  9. Wii Wii says:

    Nintendo will need better games. Period.

  10. rdaneel72 says:

    The internet is its own reality, and those that prowl it sometimes forget that.

    The reason for Wii’s loss of momentum is two-fold. One: it has been selling in such insane numbers that it was bound to fall off eventually. Two: there haven’t been many great games lately.

    The solution (to both) is NSMBWii. NSMBWii will outsell Modern Warfare 2, maybe not in Novemeber, or even in 2009, but it will eventually be right up there with other top-selling titles of this generation, like Mario Kart Wii and Wii Fit. What does the first month’s sales matter? MW2 will be down to $30 in 6 months, and NSMBWii will be bringing in full retail price for the next 3 years.

    The distinction between hardcore and casual games must stop. It is not reality. It is marketing. Casual games (and gamers) are a derisive term created by the gamersphere to cope with Wii’s success. More stupid mini-game compliations will not help Wii regain momentum. But, compelling games with lots of meat that appeal to EVERYONE will do the trick. NSMBWii is simple, but deep and engrossing. It is easy, but endlessly challenging. It is for everyone, and that means EVERYONE is a potential customer. Much better than a product that appeals only to a very small, but very VOCAL, minority of young males who spend more time posting about games on gaming websites than actually playing them anyway.

  11. Liam J Moore says:

    I agree with a few comments here, there is a lack of truly stellar games that compel people to want to buy it, subsequently the console. I look at my friends who own a PS3/360 with a little envy when they play Assassin’s Creed, or Little Big Planet. Sure we have mascots, but what about games you can’t wait for? Seems they are few and far between, and I really hoped my Wii wouldn’t sit like it does gathering dust, simply because there are no games I look at going, “I REALLY NEED THAT!”

  12. Eolirin says:

    @rdaneel72, I hate to say this but… Even NSMBW will not appeal to “everyone”. It appeals to a relatively large set of people, but it doesn’t even remotely come close to appealing to the entire population.

    While the “hardcore” and “casual” monikers are ridiculous on the face of it, they are illustrative of an actual divide. The terms are not properly descriptive, but the term “hardcore gamer” does actually refer to a particular set of of values, even if the term “hardcore” is a misnomer for it, and casual is amorphous and really means “not part of that aforementioned group”. Part of the problem is that there’s no really good way to describe that “hardcore gamer” group, except by describing all of the traits that make them up, and then you’re looking at a lengthy analysis, rather than a way to refer to them.

  13. rdaneel72 says:

    @Eolirin I don’t know, man. Who does it NOT appeal to? Maybe a small subsection of the already dwindling gamersphere, teens who grew up on PS and Xbox and have no nostalgia for Mario. But they are bookended by young kids and their parents, who were kids during the height of Mario mania. It certainly appeals to a broader audience than Modern Warfare 2.

    NSMBWii is a prime example to the problem with casual vs. hardcore. It is both, so it is neither. It is just a game, and the people who play it are just gamers.

    What defines a hardcore game? Difficulty? Arcade gameplay that requires quick reflexes? A long, challenging, satisfying playtime? Sounds like NSMBWii to me. What defines a casual game? Easy to undersand? Fun for the whole family? Simple controls that are immediately understood? Also, sounds like NSMBWii to me. The very attempt to categorize is futile.

    Hardcore and casual are BS marketing terms created by the online gamersphere and adopted by the industry that serves them. One can play SMB for hours, searching out every secret and mastering ever jump. Or, one can play for a few minutes, enjoying the whmisical worlds and laughing at every death. The whole debate is asinine, yet it has become such a crucial component of the industry. How did that happen? Why do we let it continue?

    Games are for everyone. Different types of games for different types of gamers, but such distinctions are much more complex than simply hardcore or casual. And while the gamersphere may argue that Nintendo’s approach is merely a homogenization to appeal to the masses, what is wrong with that? No one else in the entire industry is targeting anyone besides males 18-35. Appealing to everyone levels the playing field. It gives all customers the opportunity to enjoy gaming. And it makes a hell of a lot of money!!!

  14. Mr.cranky says:

    Its officall, the hardcore crowd is retarded. I got a nice stack of core games that i bought this year. I dont think the core noticed em, im guessing theyre too busy complaining on websites? Or they cant see cool games like muramasa in standard def? And just after xmas, theres ff crystal bearers, sin and punishment2, monster hunter tri, tatsunoko vs. Capcom, and no more heroes 2. That sounds like a steady stream of great core content, or maybe they must be for little kids and grandma?

  15. raindog469 says:

    What defines a hardcore game in this decade is brown. Nintendo really doesn’t do brown. Thank heavens.

  16. ac says:

    um,…i think he was mostly referring to the state of video games in japan, which is horrendous in the console market. japan is geared more towards to handhelds, and i don’t see this trend reversing. on the other hand, the console market in the states and other parts of the world is still healthy for nintendo relatively.

  17. finland says:

    It’s time for a WiiHelmet. If they can put us IN the game, that will move consoles.

  18. InvisibleMan says:

    I’m reading a lot here about “great games”, “good games”, “better games”, etc… Can we be more obvious? You need to define “great”, “good”, “better”, “stellar”, etc.: There have been really “good” games on Nintendo platforms this year! (Muramasa, GTA: Chinatown Wars, Dead Space: Extraction, etc.) They all did poorly! So, great games is clearly not the answer, unless you are comparing the Wii “great” games with the 360’s and the PS3’s… And in that respect, the problem is that those great games can’t compete with their counterparts in the high-end consoles. A $10 difference is not compelling enough to make me buy “Call of Duty: Modern Warfare: Reflex” over “Modern Warfare 2”! The visual and online experiences on each are totally different. Guess which one are most people gonna buy?

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