XBox Bleeds, Wii Leads
How can you not love what Nintendo is doing right now with the Wii? Five years ago Nintendo didn’t really matter. Sony and Microsoft were suppose to take over the video game console market. The PS2 and Xbox were fighting a battle Nintendo knew it could not win. So it changed the game.
The founding principle behind the Change the Game business strategy is to literally change the game, to shift the rules the market plays by. Five years ago the console wars were about out doing the other guy. The objective was to build the biggest baddest and fastest machine. Nintendo knew it couldn’t fight that battle. It knew it couldn’t compete with $600 machines that actually lose the manufacture money at retail. Nintendo had to do something drastic if it still wanted to matter. They chose to forget all the fancy processing graphics stuff and instead focus on playability.
In creating their next console Nintendo actually thought about the users and their gaming experience. They created a machine that was completely different from anything Sony or Microsoft was doing. They changed the game and the market by making video games fun to play again, by making video games affordable again. And a funny thing happened. People started buying the Wii.
The Wii has been in limited supply ever since it came out months ago. Some websites report the Wii out performing the new PS3 and Xbox 360 by a 3 and 4 to 1 margin each month. There is even someone making making Wii fishing poles for fishing video games. I’m not a big gamer, but I love when the underdog realizes they can no longer compete within the traditional market barriers and create their own. Change the game companies break out of the bloody trench warfare to enjoy new green pastures.
What makes the strategy move even more satisfying for Nintendo is that Microsoft, in trying to outdo Sony as quickly as possible, shot themselves in the foot. Microsoft is now facing an estimated $1 Billion write off as it tries to fix all the Xbox 360’s it rushed to market with bad components. Sony isn’t doing so well either. It just announced it will lower the PS3 price by $100 less than a year after launching. That is completely unheard of in the console wars. I don’t blame them, not when I can pick up a Wii for half price.
Nintendo has made a brilliant business move. They have changed the game. Now we’ll see if they can continue to create new market share while Sony and Microsoft try to react.
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