NINTENDO WII vs SONY PLAYSTATION 3 Case Submission for the fulfilment of the course on Strategic Games in Marketing and OperationsUnder the guidance of Submitted By:Dr. Kausik Datta Jatan Deliwala 10DCP-011Associate Professor Nikhil Garg 10DCP-020Marketing Management Nitin Verma 10DCP-021IMT Ghaziabad Rishi Dewan 10DCP-027 Saurabh Chincholikar 10DCP-030 Shivi Gautam 10DCP-038 Viral Bakhada 10DCP-048 Bhavya Khurana 10DCP-065
Video Game Console IndustryPorter’s 5 Forces Buyer Power 6 4 Exit barrier 2 Supplier Power 0 Entry Barriers SubstituteThreat of substitute productsIn such a highly competitive market, there are of course strong substitutes. Each system started withtheir niche, but in order to grow market-share each has added features to eliminate the qualities thathave enabled competitors to differentiate. As they become more similar, the choice between thembecomes harder and thus the threat of substitutes is high. Nintendo being the most basic and leastpowerful of the bunch means they have to continuously price themselves well below the competitorsto help eliminate the ease of substitution. Factors affecting the threat of substitution are favorablegrowth trend of market, highly competitive market, disruptive innovation by new players, Highpressure for innovation & technology gets easily obsolete.Entry BarrierThreat of new entrant is very low so there is high entry barrier for Gaming industry. The consolegaming industry, is a market in which, only very technologically advanced and well-funded companiescan enter. Loyal customer bases and established subcultures have made it so new entrants wouldhave to provide something completely revolutionary to get customers to switch. Microsoft was the lastbig company to join the competition and they struggled for a long time, despite being a well-knowntechnology giant.Exit BarrierCompanies are investing in R & D of hardware as well as software development and technology getseasily obsolete so Exit barrier for Players in Gaming industry is very high.Suppliers PowerContract for consoles development is given to experts in the field of batteries, processors, and videocards but actually the specifications are very unimpressive. Since these are pretty standard items forconsole development and market has many experts to develop console has reduced bargainingpower of supplier.Buyer PowerThe gaming industry is one of luxury and in a bad economy these goods are at the mercy of thecustomers. The customers have the power, the money, and the marketing buzz to make or break acompany rather quickly. Companies have to be careful how they price themselves and be sure toalways keep the customer in mind; there is very little room for error.
Global Video Game Market (Exhibit 1) PwC estimated that the videogame subsection of the global entertainment and media market would be the second fastest growing segment through 2014 (trailing only Internet advertising wired and mobile). Michael D. Gallagher, president and CEO of the Entertainment Software Association: December („09) sales broke all industry records and underscores the incredible value consumers find in computer and video games even in a down economy.Video Game Console Market: Steady Growth Through 2012 (Exhibit 2) Market has experienced dramatic growth since 2007 Web-based video game advertising experiencing the most rapid expansion, with a CAGR of 18.5% E-marketer predicts web-based market size to be $478M by 2012Evolution of Hardware controllers (Exhibit 3)Hardware is one of the integral part of gaming industry. There has been rapid change gaming industrygoing through in these highly competitive market.Perceptual Mapping of Products (Exhibit 4)History and Introduction of PSPSony Computer Entertainment (SCE) produces the PlayStation family of video game hardwareconsisting of consoles and handhelds. Sonys first wide home console release,the PlayStation (codenamed PSX during development, currently PS-1), was initially designed to bea CD-ROM drive add-on for Nintendos Super Nintendo Entertainment System . When the prospect ofreleasing the system as an add-on dissolved, Sony redesigned the machine into a standalone unit.The PlayStation was released in Japan on December 3, 1994 and later in North America onSeptember 9, 1995. Currently the highest selling home console of all time, SCEs second homeconsole, the PlayStation 2 (PS2 or PSX2) was released in Japan on March 4, 2000, and later in NorthAmerica and Europe in October and November 2000, respectively. PlayStation 2 received widespreadsupport from third party developers throughout its lifespan on the market. Today it has sold up to 150million units worldwide.The newest home console in the PlayStation family, as well as Sonys entry in the seventh-generationof consoles, the PlayStation 3 (PS3) was launched in November 2006. It utilizes a unique processingarchitecture, the Cell microprocessor, a proprietary technology developed by Sony in conjunctionwith Toshiba and IBM. The graphics processing unit, the RSX Reality Synthesizer, was co-developedby Nvidia and Sony. Several variations of the PS3 have been released, each with slight hardware andsoftware differences, each denoted by the varying size of the included hard disk drive.The initial retail cost was 37,000 yen, or about $387. Software available at launch included KingsField, Crime Crackers, and Namcos Ridge Racer, the PlayStations first certifiable killer app. It wasmet with long lines across Japan, and was hailed by Sony as their most important product since theWalkMan in the late 1970s.Also available at launch were a host of peripherals, including: a memory card to save high scoresand games; a link cable, whereby you could connect two PlayStations and two TVs and play againsta friend; a mouse with pad for PC ports; an RFU Adaptor; an S-Video Adaptor; and a Multitap Unit.Third party peripherals were also available, including Namcos Negcon.
In addition to playing games, the PlayStation has the ability to read and play audio CDs. The CDplayer has the ability to shuffle the playback order, play the songs in a programmed order, and repeatone song or the entire disk. This function, as well as a memory card manager, can be accessed bystarting the console either without inserting a game or keeping the CD tray open, thereby accessing aGUI for the PlayStation BIOS. The original PlayStation and PS-1 GUIs differ. The PlayStation GUI hasa dark blue background and buttons that are designed like rainbow graffiti; the PS-1 has a blockedgrey background with 2 icons; one for memory cards management, the other for CD player access(some versions of the original PlayStation have the blocked grey background, however, the memorycard and CD player icons are different). If the CD lid is closed with a game inside at any time while atthe menu, the game will immediately start.The new PS one and LCD Screen Combo and the Car Adapter (for PS one) provide long-timePlayStation® fans and new enthusiasts the opportunity to enhance their overall gaming experiencewhile enjoying the huge library of award winning PlayStation titles no matter where you are. With theintroduction of these two new products, consumers benefit from a compact, easy to transport gamingplatform ready to entertain ―wherever, whenever and forever‖. These three words were slogan ofPS0ne.Market Share (Exhibit 5)SONY is currently the market leader in game console industry. Its PlayStation has taken a lion’s shareof the console market. This makes SONY a household name in the industry. PlayStation 2, its sequel,rides on top of this wave and has been on the market a year ahead of similar products from Nintendoand Microsoft. Sony’s strong brand name in both game console and home electronics industriesmakes it well positioned for the market for future game consoles, which will be ―all-in-one‖ devicessupporting gaming, home entertainment and web browsing. Sony has partnership with AOL, Realnetworks (to include real player in PS 2) and almost every major game publisher.Nintendo has always been a strong player in console industry. It is second to Sony in terms of totalgame console unit sales from 1995 to 2000. Its GameCube is priced at $199, $100 below PS2 andXbox’s prices. The big difference in prices allows Nintendo to target at low end of the market: youngkids from 7 to 16, who can not afford more expensive models, and who don’t require as manyfeatures as the more mature age groups.Competitive advantage of PS 2Comparing to same generation consoles the major competitive advantage of PS 2 is its Product Mixadvantage in terms of Emotion Engine capability, which creates unique gaming experience. Besides,due to very strong third party support and html/java compatibility of PS2 consoles, the owners mightbrowse web sites, use e-commerce capabilities, chat and send e-mails, download music, softwareand video data.Core competencesThe major core competence of Sony as console manufacturer is its ability to blend advancedtechnological capabilities of PS2 consoles with the efforts of game developers, licensed to developthe games for the market. Grant (2005) claims that Sony managed to develop strong beneficialrelationships with wide range of leading game developers and publishers including such industrygiants as Electronic Arts, Capcon, THQ and Ubisoft.Target market and PositioningSony positions its console as entertainment centers and as unique gaming experience.Sony uses thenewest and greatest technology to appeal to their customers. The people who are most interested instaying up-to-date with the newest technology are usually men of the ages 15-30. To reach thatmarket, they make games that are attractive to men of those ages; these games tend to be theshooters and high action games such as Kill Zone and God of War. However, they do make games
for younger children; these games have a more adventure based game play such as Jak and Daxterand Crash Bandicoot. Beyond gaming, Sony also hopes to reach movie buffs with their high-definitionmovie playback thanks to Blu-ray technology. Blu-ray offers the latest advancement in movieentertainment experience. The detail of these movies is so good that you can literally see individualpores on people’s faces. As you might expect, this means detail on everything is very high and moviebuffs love this.Sony Playstation BusinessPlayStation 2PlayStation 2 is the 2nd generation of PlayStation console series launched by Sony Entertainment.The development of the PS2 was first announced to the public in April 1999. The PS2 had someunique features, not present in any other console. At its heart was an Emotion Engine, which wascreated by both Sony and Toshiba allowing the whole system to be backward compatible witholder playstation games as well as be able to play games in the newer DVD format. The PS2 had ahardware mode called Texture Interpolation to anti-alias the edges of graphics.The PS2 was finally released in Japan in March 2000, in the US in October and in Europe inNovember and sold incredibly well. So much so that it was continuously running out stock andcausing prices to skyrocket in some areas. In 2003, an updated version of the PS2 was released inEurope with a 75% quieter fan, a built-in infrared receiver, 2 Dual Shock controllers all wrapped in aslick silver color casing. In November, 2005, the PlayStation 2 became the fastest game console toreach 100 million units shipped, accomplishing the feat within 5 years and 9 months from its launch.This achievement occurred faster than its predecessor, the PlayStation, which took 9 years and 6months to reach the same benchmark. By early 2006, Sony’s PS2 dominated the video consolemarket with a 55% market share, followed by Microsoft’s Xbox with 24%, Nintendo Game Cube with15%, and the newest entry, Microsoft’s Xbox 360 with 6%. The PS2 has sold 150 million unitsworldwide as of January 31, 2011.PlayStation 3The Playstation 3 is the third game console/media center produced by Sony Computer Entertainment,and successor to the Playstation 2. The console was first released on November 11 2006 in Japan.Its primary storage media is the Blu-Ray Disc, while it also supports DVD, and CD formats. It canoutput high definition video and audio for both video games and movies via an HDMI 1.3 port (as wellas component cable), supporting up to 1080p HD resolution. Major features of the console include itsunified online gaming service, the PlayStation Network, its multimedia capabilities, connectivity withthe PlayStation Portable. The PlayStation 3 competes with Microsofts Xbox 360 and Nintendos Wiias part of the seventh generation of video game consoles.PS3 Slim and console rebrandingFollowing speculation that a slim model was in the pipeline Sony officially announced the PS3CECH-2000 model on August 18, 2009 at the Sony Gamescom press conference. Among its featuresare a slimmer form factor and quieter noise when powered on. It was released in major territories bySeptember 2009. As part of the release for the slim model, the logo was changed from the "Spider-Man font" and capitalized PLAYSTATION 3 to a more traditional PlayStation and PlayStation 2 likePlayStation 3 logo with "PS3" imprinted on the console. Along with the console and logo redesign,the boot screen of all consoles changed from "Sony Computer Entertainment" to "PS3 PlayStation 3",with a new chime and the game start splashscreen being dropped. The cover art and packaging ofgames has also been changed to reflect the redesign.
Sony Playstation3Marketing Strategies from 2006 to 2011"Sony first unveiled the PS3 as a mighty home electronics product. Then, after some badgering fromgame companies, it shifted the position of the console closer to a game machine," Square EnixPresident Yoichi Wada told reporters on Friday."(The future of the PS3) would be tough if its marketing strategy is not straightened up," he said.Sonys PS3 is packed with cutting-edge technologies such as a Blu-ray high-definition DVD playerand a Cell microchip, dubbed "supercomputer on a chip", making it advanced enough to be a hub ofliving room electronics, a high-speed gateway to the Internet, as well as a game machine.But on the downside, these state-of-the-art capabilities drove up manufacturing costs. The basicversion of the PS3 retails twice as high as Nintendo Co Ltds Wii. The high price and scarcity of stronggame titles have caused the PS3 to lag far behind the Wii in unit sales. In a sign of changing fortunesof the two Japanese video game makers, Nintendo in June became one of Japans 10 most valuablecompanies, and in doing so, bumped Sony off the top 10 list.Competition and Competitive AdvantagesSony Playstation 3 currently competes with two major gaming devices in the market. These includeXbox 360 and Nintendo Wii.Nintendo Wii, owned by Nintendo, was released in November, 2006 and is the only console with aremote sensor/controller which makes gaming interactive, as opposed to simple controllers.Disadvantages of the Wii compared to other consoles is their lack of graphics quality and inability ofDVD playback.Xbox 360 was released by Microsoft in November of 2005. The positives of the Xbox 360 are itsplethora of gaming titles it owns, its graphics quality, and its CD and DVD playback compatibility.However, to enter Xbox’s online network (Xbox Live), there is a fee.Playstation 3, owned by Sony, was released in November, 2006 and rivals the high quality graphicsof the Xbox 360, contains a huge library of games, and is wireless and free for online gaming. ThePlayStation is also able to boast being the only gaming console with rights to the Blu-Ray playback.Market CompetitionWhat makes the Playstation 3 so unique is that not only is it a video game console, but Sony tried tomarket it as an all-in-one media entertainment center. Like stated before, the PS3 offers games, Blu-Ray movies, Internet, storage for all media formats(movies, music, and photos), and the freePlaystation Online Network. Upon its release in Novemember of 2006, the PS3 was already in fullcompetition with the Xbox 360, which had a one year advantage with its 2005 release; with theNintendo Wii which was also released in November of 2006. The PS3 and Xbox 360 were consideredto be the elite gaming console, opposed to the Wii.So many people opted to purchase the Wii since it was available and it was significantly cheaper thanthe other two game consoles with a starting price of $249.99. The PS3 generated a lot of attentionsince all units were sold out everywhere upon its release, but the biggest complaint was the pricecompared to the Xbox 360. Both competing systems had two models for sale: the Xbox 360 had theirCore model which sold for $299 and the Pro model(included 20GB hard drive) which sold for $399.The PS3s two models were exactly identical except for the size of the hard drive. The 20GB modelsold for $499, and the 60GB model sold for $599. Both PS3 models offered features which the Xbox360 did not have such as Wi-Fi connection, a Blu-Ray player, free online gaming, bigger storagespace, and most importantly games being played in Full-1080p HD resolution. The advantage the
Xbox 360 had on the PS3 was its wide variety of games and its established online gaming network,Xbox Live.. A major factor for the success of the PS3 was the battle between HD-DVD vs. Blu-RayDVD. Ultimately.The Playstation Network being absolutely free was a good market scheme since it counters the XboxLive subscription. This appears to be "penetration pricing" for the Playstation Network to achieve itscritical mass for its online networkMarket SalesSales for the three competing consoles within this network have been very competitive from 2005(when the first of the three market competitors was sold publicly) to now. In November 2005 until thefirst half of 2007, Xbox 360 was the market leader (selling to mainly the Americas and Europe)despite having production problems at the time it was sold publicly due to the amount of Xbox 360sthat were produced were less than the consumer demand. This initially slowed sales but they werestill the market leader.The Playstation 3 was released in November 2006, however when the PS3 was initially released, itwas produced at a production cost of about $805.85 and priced to consumers at $499.00, resulting inoperating losses of about $1.97 billion by March 2007. This made profit losses for Sony, and the highprice of the console contributed to the competitive disadvantage of it compared to the Xbox 360 andWii. In the first half of 2007, the Wii (selling to mainly Japan and the Americas) sold more consoles inthe U.S. than Xbox 360 and Playstation 3 combined, thus making the Wii the dominant competitor inthe market. But in October 2007 when Halo 3 (game) was launched, Xbox 360 sales doubledcompared to October 2006 sales. More people wanted to enter the Xbox 360 network because of thisgame.Sales for September 2007 of the Xbox 360 were 528,000 and 501,000 for the Wii. During this time,production costs for the Sony Playstation 3 decreased as a result of eliminating the Emotion Enginechip and hardware cost decreases, and by the end of 2008 the Playstation 3 was profitable.The Playstation 3 was able to be much more competitive than it was before the high production costs.In early 2008, sales were declining for the Xbox 360 so Microsoft started selling Xbox 360 consolesbelow cost in order to gain market saturation and increase profits on the peripherals and softwarebecause of the higher profit margin on those. Xbox live users increased substantially during this time.From May to June 2008, Xbox 360 was the market leader with the most sales of any console.By November 2008, the Nintendo Wii sold 13.4 million consoles worldwide, which was twice that ofPlaystation 3 units sold and 2 million more than Xbox 360. However in 2009, Wii sales fell by 47%from that of 2008 because of price reductions in Xbox 360 and Sony’s future plans of creating amotion-sensing wireless controller. By mid 2009, the cost of producing Playstation 3 consoles hadfallen to 70% that of it in 2006, which is about $240 per console, thus increasing profits for Sony.However by the end of 2009, Nintendo cut the price of the Wii and came out with the software releaseof New Super Mario Bros. These factors increased sales for the Wii in December 2009 in the U.S. tomore than 3 million, taking the Wii out of their slump. To give an overall look at sales since theconsoles release, Xbox 360 has sold more than 41.7 million units since 2005, Wii has sold 73.97million units since 2006, and Playstation 3 has sold 38.1 million consoles since 2006.NintendoIntroductionNintendo Co., Ltd. is mainly engaged in the development, manufacture and sale of entertainmentproducts in home entertainment field. The Companys main products include leisure machine such asportable and console game machines and software, as well as poker cards and karuta (Japanese-
style playing cards). As of March 31, 2011, the Company has 26 subsidiaries and five associatedcompanies.HistoryAs a card company (1889–1956)Nintendo was founded as a card company in late 1889, originally named Nintendo Koppai. Based inKyoto, Japan, the business produced and marketed a playing card game called Hanafuda. Thehandmade cards soon became popular, and Yamauchi hired assistants to mass produce cards tosatisfy demand. Nintendo continues to manufacture playing cards in Japan and organizes its owncontract bridge tournament called the "Nintendo Cup".New ventures (1956–1974)In 1956, Hiroshi Yamauchi (grandson of Fusajiro Yamauchi) visited the U.S. to talk with the UnitedStates Playing Card Company, the dominant playing card manufacturer there. He found that theworlds biggest company in his business was only using a small office. This was a turning point whenYamauchi realized the limitations of the playing card business. He then gained access to Disneyscharacters and put them on the playing cards to drive sales.The Nintendo Love TesterIn 1963, Yamauchi renamed Nintendo Playing Card Co. Ltd. to Nintendo Co., Ltd. The company thenbegan to experiment in other areas of business using newly injected capital. During this period of timebetween 1963 and 1968, Nintendo set up a taxi company, a love hotel chain, a TV network, a foodcompany (selling instant rice, similar to instant noodles) and several other things. All of these ventureseventually failed, and after the 1964 Tokyo Olympics, playing card sales dropped, and Nintendosstock price plummeted to ¥60.In 1966, Nintendo moved into the Japanese toy industry with the Ultra Hand, an extendable armdeveloped by its maintenance engineer Gunpei Yokoi in his free time. Yokoi was moved frommaintenance to the new "Nintendo Games" department as a product developer. Nintendo continuedto produce popular toys, including the Ultra Machine, Love Tester and the Kousenjuu series of lightgun games. Despite some successful products, Nintendo struggled to meet the fast development andmanufacturing turnaround required in the toy market, and fell behind the well-established companiessuch as Bandai and Tomy.In 1973, its focus shifted to family entertainment venues with the Laser Clay Shooting System, usingthe same light gun technology used in Nintendos Kousenjuu series of toys, and set up in abandonedbowling alleys. Following some success, Nintendo developed several more light gun machines for theemerging arcade scene. While the Laser Clay Shooting System ranges had to be shut down followingexcessive costs, Nintendo had found a new market.Electronic era (since 1974)Nintendos first venture into the video-gaming industry was securing rights to distribute the MagnavoxOdyssey video game console in Japan in 1974. Nintendo began to produce its own hardware in 1977,with the Color TV Game home video game consoles. Four versions of these consoles were produced,each including variations of a single game.A student product developer named Shigeru Miyamoto was hired by Nintendo at this time. He workedfor Yokoi, and one of his first tasks was to design the casing for several of the Color TV Gameconsoles. Miyamoto went on to create, direct and produce some of Nintendos most famous videogames and become one of the most recognizable figures in the video game industry.In 1975, Nintendo moved into the video arcade game industry with EVR Race, designed by their firstgame designer, Genyo Takeda, and several more titles followed. Nintendo had some small successwith this venture, but the release of Donkey Kong in 1981, designed by Miyamoto, changedNintendos fortunes dramatically. The success of the game and many licensing opportunities (such asports on the Atari 2600, Intellivision and ColecoVision) gave Nintendo a huge boost in profit.
The Nintendo Entertainment System (NES)In 1980, Nintendo launched Game & Watch—a handheld video game series developed by Yokoiwhere each game was played on a separate device—to worldwide success. In 1983, Nintendolaunched the Family Computer, known outside Japan as the Nintendo Entertainment System (NES),home video game console in Japan, alongside ports of its most popular arcade titles. In 1985, theNES launched in North America, and was accompanied by Super Mario Bros., currently one of thebest-selling video games of all time.In 1989, Yokoi developed the Game Boy handheld game console. The Nintendo EntertainmentSystem was superseded by the Super Famicom, known outside Japan as the Super NintendoEntertainment System (SNES). This was Nintendos console of the 16-bit 4th generation, following theFamicom of the 8-bit 3rd generation, whose main rival was the Sega Mega Drive/Genesis. A fierceconsole war between Sega and Nintendo ensued. The SNES eventually sold 49.10 million consoles,around 20 million more than the Mega Drive/Genesis.During the dominance of the Game Boy line, its creator, Yokoi, designed the Virtual Boy, a table-mounted semi-portable console featuring stereoscopic graphics. Users view games through abinocular eyepiece and control games using a gamepad. Rushed to market in 1995 to compensate fordevelopment delays with the upcoming Nintendo 64, the Virtual Boy was a commercial failure due topoor third-party support and a large price point. Amid the systemss failure, Yokoi was asked to leaveNintendo.The companys next home console, the Nintendo 64, was released in 1996 and features 3D graphicscapabilities and built-in multiplayer for up to four players. The systems controller introduced theanalog stick. Nintendo later introduced the Rumble Pak, an accessory for the Nintendo 64 controllerthat produced force feedback with compatible games. It was the first such device to come to marketfor home console gaming and eventually became an industry standard.The Nintendo GameCube followed in 2001 and was the first Nintendo console to utilize optical discstorage instead of cartridges. The most recent home console, the Wii, uses motion sensing controllersand has on-board online functionality used for services such as Nintendo Wi-Fi Connection andInternet Channel . The Wiis success, as well as the success of the DS, introduced an expansion ofaudience to broader and non-traditional demographics, a business model with which Nintendo hashad success. Contrarily, the new business model has also resulted in some long-timegamers abandoning the Nintendo console for its competitors.Nintendo unveiled their newest home console, the Wii U, on June 7, 2011 at the ElectronicEntertainment Expo.Handheld console historyThe Nintendo 3DS is Nintendos latest handheld video game system which features autostereoscopic3D. After the successful Game & Watch, the handheld development continued with the Game Boy,the Game Boy Pocket and Game Boy Color, with the latter two differing in fairly minor aspects. TheGame Boy, the best-selling handheld and third best-selling console of all time, continued for morethan a decade until the release of the Game Boy Advance, featuring improved technical specificationssimilar to those of the SNES. The Game Boy Advance SP, a frontlit (backlit in later editions), flip-screen version, introduced a rechargeable, built-in battery, which ended the need for AA batteries inprevious consoles. The Game Boy Micro was released in 2005, after the Nintendo DSs release, butdid not sell as well as its predecessors. The Nintendo DS replaced the Game Boy line sometime afterits initial release in 2004, originally advertised as an alternative to the Game Boy Advance. It wasdistinctive because it had two screens and a microphone, in a clamshell design continuing on from theGame Boy Advance SP.The Nintendo DS Lite, a remake of the DS, improved several features of the original model, includingthe battery life and screen brightness. It was designed to be sleeker, more beautiful, and moreaesthetically pleasing than the original, in order to appeal to a broader audience. On November 1,2008, Nintendo released, in Japan, the Nintendo DSi, an improved version featuring smaller screens,improved sound quality, an AAC music player and two cameras—one on the outside and one facingthe user. It was released in North America, Europe, and Australia at the start of April, 2009. The
successor of the DSi, with an expanded screen, is the Nintendo DSi XL, which was released onNovember 21, 2009 in Japan and the first half of 2010 in other regions.The successor to the Nintendo DS line, the Nintendo 3DS, uses the process of autostereoscopy toproduce a stereoscopic three-dimensional effect (glasses-free) and was released in Japan onFebruary 26, 2011, launched in Europe on March 25, 2011 and North America on March 27, 2011.The console got off to a slow start, initially missing many key features that were promised before thesystem launched.Nintendo WiiThe Wii is a video game console made by Nintendo. This is the one of the most successful consolesmade by Nintendo to this date, and it is the successor to the Gamecube. It was released inNovember, 2006, two days after the PS3 was released in NA. The Wii is a very interesting console,having WiFi online capabilities, wireless controllers, and blue-tooth. But perhaps the most interestingfeature is the motion sensors in the Wii controller (dubbed Wii-Mote). It allows people to swing theirarms and the same motion will happen on screen in the game. It also has an infrared light on the endof the wii-mote so you can point and shoot at the screen, kind of like the old duckhunt game one theoriginal NES. A speaker and vibration are included as well for that extra feel of realism.The launch of the Wii was pretty crazy, and kept selling out at all the stores for many months after itsrelease, mainly because its fun to play and is affordable compared to what is available from Microsoftand Sony. As of December 2011, the Wii leads the generation over the PlayStation 3 and Xbox 360 inworldwide sale, and in December 2009 broke the record for best-selling console in a single month inthe United States.Since its launch, the monthly sales numbers of the console have been higher than its competitorsacross the globe. Retail copies of Wii games are supplied on DVD optical discs. Wii Optical Discs arepackaged in a keep case along with instruction information. On European releases, these retail boxeshave a triangle printed at the bottom corner of the paper insert sleeve side. The hue of the trianglecan be used to identify which region the particular title is intended for and which manual languagesare included. (Exhibit 6)Marketing Strategies from 2006 to 2011According to Nintendos game designer Shigeru Miyamoto, the concept involved focusing on a newform of player interaction. A distinguishing feature of the console is its wireless controller, the WiiRemote, which can be used as a handheld pointing device and detects movement in threedimensions. Another distinctive feature of the console is WiiConnect24, which enables it to receivemessages and updates over the Internet while in standby mode.The console was known by the code name of "Revolution" until April, 2006. The Nintendo StyleGuide refers to the console as "simply Wii, not Nintendo Wii", making it the first home consoleNintendo has marketed outside of Japan without the company name featured in its trademark.By December 8, 2006, it had completed its launch in four key markets i.e. the USA, England, SouthKorea and Taiwan.Nintendo hopes to target a wider demographic with its console than that of others in the seventhgeneration. At a press conference for the then-upcoming Nintendo DS game Dragon Quest IX:Sentinels of the Starry Skies in December 2006, Satoru Iwata insisted "Were not thinking aboutfighting Sony, but about how many people we can get to play games. The thing were thinking aboutmost is not portable systems, consoles, and so forth, but that we want to get new people playing
games.‖ This is reflected in Nintendos series of advertisements on TV and Internet in North America.The ad slogans are "Wii would like to play" and "Experience a new way to play."Since its launch, the monthly sales numbers of the console have been higher than its competitorsacross the globe.In the first six months of 2008, the Wii had sold 318,000 units in Canada, outselling its nearestcompetitor, the PlayStation 3, almost 2:1. While Microsoft and Sony have experienced lossesproducing their consoles in the hopes of making a long-term profit on software sales, Nintendoreportedly has optimized production costs to obtain a significant profit margin with each Wii unit sold.In December 2008, Forbes reported that Nintendo makes a $6 operating profit per Wii unit sold.Kenji Hall of Business Week called the company "a bright spot in an otherwise dismal Japanese techsector" citing the unique qualities of the Wii. Wii sales drop by 47% in the fiscal year 2008 – 2009. Hallargued "Nintendos big advantages are disappearing" amid price reductions of the Xbox 360 andrumours of Sony unveiling a motion-sensing wireless controller.In September, 2009, Nintendo announced its first price drops for the console. In the United States, theprice was reduced by $50. Nintendo sold more than three million Wii consoles in the U.S. inDecember 2009, setting a regional record for the month and ending 9 months of declining sales, as aresult of the price cut and software releases such as New Super Mario Bros. Wii. In December 2009,Nintendo Wii broke the record for best-selling console in a single month in the United States.Over 509.66 million Wii games were sold worldwide as of December 2009, with 54 titles surpassingthe million-unit mark. The most successful game is Wii Sports, which comes bundled with the consolein most regions, and has sold 67.71 million copies worldwide as of September, 2010 and surpassedSuper Mario Bros as the best-selling game of all time.Nintendo announced the successor to the Wii, called Wii U, at the Electronic Entertainment Expo2011. The Wii U will feature a controller with an embedded touch screen, output 1080p high-definitiongraphics, and be fully backwards compatible with Wii games and peripherals for the Wii. The WiiRemote and Nunchuk controller, and the Wii Balance Board, will be compatible with Wii U games thatinclude support for them.Wii Family EditionThe Wii Family Edition is a revised Wii model, released in October, 2011, which, while being the samedimensions as the original model, is designed to sit horizontally instead, and is not compatibile withNintendo Game Cube games or accessories. It was announced in August, 2011.The "Wii Family Edition" is to be made available in Europe as part of a Christmas bundle with a WiiRemote Plus, Wii Party and Wii Sports. In October, 2011, Nintendo UK announced a blue Wii FamilyEdition would be released to coincide with the release of Mario & Sonic at the London 2012 OlympicGames to release in November, 2011. In the same press release they hinted additional colors to beavailable in late 2011. In October, 2011, Nintendo of America announced a black Wii family edition tobe released shortly and would come bundled with New Super Mario Bros Wii and the officialsoundtrack CD of Super Mario Galaxy.Unlike the PlayStation 3 Slim and Xbox 360 S which were released in 2009 and 2010, respectively,and replaced all older models, the Wii Family Edition did not. The original Wii is still sold as normal.Technical SpecificationsThe Wii is Nintendos smallest home console to date; it measures 44 mm wide, 157 mm (6.18 in) talland 215.4 mm (8.48 in) deep in its vertical orientation, slightly larger than three DVD cases stackedtogether. A red Wii system bundle was made available in Japan in November, 2010, commemoratingthe 25th anniversary of Super Mario Bros.The Wii console contains 512 MB of internal flash memory and features an SD card slot for externalstorage. An SD card can be used for uploading photos as well as backing up saved game data and
downloaded Virtual Console and Wii Ware games. Wii is roughly 1.5 to 2 times as powerful as itspredecessor but the least powerful of the major home consoles in its generation.The console also features parental controls, which can be used to prohibit younger users from playinggames with content that would be considered unsuitable for their age level.The console supports regional lockout, which means that software purchased in one region can beonly played on the hardware of the same region.Game designer Will Wright shared his thoughts on the Wii within the context of the current consolegeneration: "The only next gen system Ive seen is the Wii – the PS3 and the Xbox 360 feel like betterversions of the last, but pretty much the same game with incremental improvement. But the Wii feelslike a major jump – not that the graphics are more powerful, but that it hits a completely differentdemographic."Using the Wii is often seen as being more physically demanding than other game consoles. Some Wiiplayers have occasionally experienced a form of tennis elbow referred to as "Wiiitis." A studypublished in the British Medical Journal states that Wii players use more energy than they do playingsedentary computer games. It is, however, indicated that while this energy increase may be beneficialto weight management, it is not an adequate replacement for regular exercise. In 2009, IGN namedthe Wii the 10th greatest console of all time, in a field of 25.
Exhibit 5Table 1: 1995-2000 game console unit sales Brand Market Share (%) Sony 47% Nintendo 28% Sega 23% Others 2%Table 2: Market share of game consoles by vendor as of Dec 2000 Brand Market Share (%) Playstation 37% Nintendo 23% Game boy color 21% Dreamcast 11% Playstation 2 8%Table 3: Dec 2000 market share of games Type Of Games Market Share (%) Market size PC games 23% $30 million Console games 77% $110million
Exhibit 6Total Sales and Market Share for discrete years
Exhibit 7 Number of Units Shipped yearwise (In million)302520 Japan Americas15 Total10 5 0 2006 2007 2008 2009 2010