Nintendo – New Product Development

Nintendo has recently announced the ‘Wii U’, which is scheduled to launch sometime during 2012, at this year’s E3 press conference.  This is a great example of a product development strategy.  This is where a company itends to market a new product to their existing customers; the ‘new and improved’ version of the best-selling Wii games console, features a new touch-screen controller, HD gaming and a revamped look.  These are all features that aim to enhance the core benefit offered to customers – thus, boosting sales.  However, can Nintendo reproduce the success of the original Wii?

There are three reasons why generating market-leading levels of sales may be harder than expected to replicate:

Mature Market – the original Wii used what is known as a ‘blue ocean strategy’, which involves creating a new market as a result of the product launch.  Namely, the Wii introduced families to video gaming.  In contrast, the Wii U’s product development strategy will now be targeted at this existing market.  It is debatable that these ‘casual gamers’ are enthusiastic enough to purchase another console, particularly during our economic climate.

Increased Competition – the maturity stage of a product’s life cycle always involves competitors becoming more established and thus pose a greater threat.  There are several ways to define who your competitors are. If you take an industry view, Nintendo are obviously competiting against Sony’s PS3 and Microsoft’s Xbox 360; however, considering a market perspective the real threat comes from Apple’s iPad.  Arguably, an iPad may be more appealing to casual gamers: the device is not just deicated to gaming, the games are cheaper and the device is even easier to use.

Increased Cost – this is a key consideration for Nintendo’s chosen market segment.  All these extra features, obviously, mean a higher price will be charged; price skimming will be required to recoup high research and development costs.  More significantly, the core benefit of the Wii was gaming with the whole family; the new touch screen controller is also likely to cost a lot more.  This means that the true price of the the product – when all the accessories are purchased for the whole family – is going to be substantially high.

Having said that, prior to the original Wii’s launch many people were sceptical whether or not Nintendo had got their positioning strategy right – even mocking the  homophone name ‘Wii’.  Perhaps Nintendo is set to prove the market wrong again?  Please let me know what you think – leave a comment below saying if you think the Wii U will be a success or flop.

I think, despite the odds, Nintendo have lots of experience and are set to deliver another record-breaking product.


UPDATE 17/06/2011

Nintendo Global President Satoru Iwata has told IGN, due to the cost of the controller, Nintendo will be focusing on games that require only one controller.  Does this mean that multi-player gaming will be less fun or even non-existent?  This was a major selling point of the original Wii and could spell disaster for the Wii U.  Check out IGN for more info.

© Joshua Blatchford, author of Manifested Marketing, 13/06/2011

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