Nintendo, in terms of marketing, failed to generate sufficient hype among the general consumer for their new flagship product prior to launch. And yet a few weeks later, word of mouth has generated a buzz that is causing an increasing growth in demand. While this was what Nintendo was banking on, I believe they got lucky since all companies, including Sony and Microsoft, hope for word of mouth sales. Nintendo, in a generic sense, failed at marketing their console when compared to Sony. All parents knew about PS3, and knew it was a “hot item” when it came out. Wii was perceived as a gimmick for kids that was for the “budget gamer,” which isn’t flattering. There was tons of Internet buzz, but the general market seemed relatively oblivious to the Wii, evident from lagging (albeit sold out) launch day sales (see below).
Luckily, this has in no way hurt Nintendo since everything sold out. Sony, on the other hand, dominated the marketing competition. Unfortunately, they lost the post-launch hype fight due to:
- Tons of negative press due to violence on launch days. Negative association hurts.
- Impossible shortages caused word of mouth to become difficult due to too few starting nodes existing (people who can show their friends). For example, I know nobody who owns a PS3, but I do know a few people who expressed an interest in getting one.
On the other hand, Nintendo gained some serious momentum due to:
- The console itself is totally novel, making people who see it in person want to try it.
- Enough supply to allow word of mouth to thrive, but not enough that the market is saturated and buzz is killed.
In short, Nintendo got lucky where Sony got really unlucky. The lesson here is that if you have something truly novel, it may sell itself (if you are lucky). On the other hand, if all you’re selling is an upgrade to something that already exists, you have to sell it hard and fast while demand is at its peak. That is because consumers are generally happy with the status quo (the PS2 that they already own), which means each time they visit the store, you have to convince them the upgrade is worth it. For example, if you convinced a consumer four times, and each time they visit the store, they can’t buy your product, they’re eventually going to either:
- Give up and forget about upgrading.
- Still want the upgraded experience, and thus buy the competitor (XBox).
- Take the best “deal” since they’re already at the store (Wii/PS2).
The third point explains why PS2 sales are still kicking strong. And the second point is the most important. It explains why Microsoft has seen a pretty big jump in sales this quarter — Sony convinced consumers for them (aside from their own marketing, of course)! By pushing the “next gen,” without providing a product people can readily buy, Sony created a strong interest for something “new” without providing their own answer to the problem. Enter Microsoft and Nintendo. Good job, Sony.
What’s really interesting about the Wii is that its demand is steadily growing even while supplies continue to increase. This is evident from my friend going to Best Buy on launch day and seeing tons of Wii’s sitting around. They were reportedly available until mid-day on launch day at many locations around the nation. I remember hearing on the radio, on launch day, that Wii’s were still not sold out at 1PM at some Best Buys.
Anyway, I bought a Wii last week. It has lived up to my expectations.
Now that it’s been out for two weeks, getting a Wii requires getting in line at 6AM on a Sunday morning. From speaking to people at Toys R Us and Target, those two locations had lines surpassing 60 people long before 7AM. I got lucky with mine because it seems many people didn’t think to visit Circuit City to get a Wii. =) I asked a rep. at the counter and he told me that each day, more and more people are asking about the Wii.
Have you seen the prices on Ebay? The prices continue to increase even when shipments from 60 to 100 Wii’s hit major electronics chains each week.
It was also interesting seeing the demographics of people in line. You’d think the line would be filled with teenage geeks playing with their DS. Wrong. Virtually everybody in the line was between 20 and 30. Very few teenagers, and very few kids in general. There were some older folks pushing 40 as well. When speaking to people, many of them had seen it first hand during Thanksgiving from family who had bought it the week prior.
Anyway, since getting one, I’ve let a few of my friends play it and they’ve all viewed it very positively. Granted, this whole Wii experience is relatively novel, but it is still interesting to note. It is definitely a social system. Getting a Wii to play all by yourself is moronic. Most of the games are geared towards playing with friends in a relaxed environment.
I’m bringing it to work tomorrow. Let’s see if I can sell my co-workers.