Executive Summary
Every industry and every company in a given market operates under a set of unique internal and external environment. Because of this fact, it is usually very difficult to come up with a singular strategy that completely dominates over other ideas, this scenario is seen even within the industries themselves. Determining what strategies to take in order to achieve the company’s goals and missions is thus no easy task. This paper seeks to analyze the Nintendo wii fit in the UK, the marketing strategies, internal and external environments combined with consumer behavior towardthe Nintendo wii fit game consule (Nintendo Corporate, 2007).
Before looking at the strategies the Nintendo wii fit employs in order to control a significant share of the UK market, a general overview of the characteristics modern gaming industry is necessary. Presently, there is a massive and steadily growing market for video game consules worldwide. For instance, in 2008, approximately 300 million people played a video game on a consule system (Thompson, Strickland & Gamble, 2010, p C-218). Due to the advancement in gaming technology in the early 2000s, the numbers of people playing video games grew by more than twice as compared to the 1990s both in the US and the UK (Heeter, maniar & Egidio, 2003).
In 2003, game enthusiasts begun to anticipate the arrival of a new generation, high definition and highly technologically advanced game consoles. With this anticipation, it was inevitable that the global gaming market and industry would expand significantly and as a consequence, the competitive rivalry between the big names in the gaming industry such as Nintendo, Microsoft and Sony would also increase.
The Nintendo Entertainment system was introduced in the year 1985. Single handedly, this gaming system almost rejuvenated the video game industry, with sales way over 60 million units. In 2006, Nintendo introduced its Wii line of products in the market with various revolutionary features such as: built-in Wi-Fi capabilities and Wireless motion-sensitive remote controllers which catapulted the Wii into the best selling new generation video game console in the whole world.
The goal of the company worldwide is to reach to non-gamers with products which are playable and enjoyable to everyone, that is, both seasoned gamers and non-gamers. (Capua, 2007). Nintendo’s mission statement states that “At Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to provide products of the highest quality, but to treat every customer with attention, consideration and respect. By listening closely to our customers, we constantly improve our products and services” (Nintendo UK, 2013)
The mission statement, therefore, clearly reflects the core purpose of the company, its values, values and fundamental business goals. Their vision is to come up with new products that have never been seen in the market aimed at expanding the number of people who find gaming interesting exponentially. It is the same vision that led to the production of a smaller, cheaper, lighter and easier to use gaming system compared to those in the market, the Wii fit, which was an instant hit in the UK and around the world. It sold more units as compared to the Sony’s playstation 3 and Microsoft’s Xbox 360. The competitors were on a rush to develop more powerful high definition consules while Nintendo focused with its standard resolution software and sought to produce a gaming system that would woo non-gamers (Qualls, 2008).
This was a radical strategy since traditionally, the players in the gaming industry competed on technological advancement and performance, game realism and the quality of the graphics, these were also the factors that were most valued by most gamers globally (Randall, 2009).
The new Nintendo business model has the following features:
• A move shift in focus from hardcore gamers to new/casual gamers:
Many game developers in the industry had their focus on seasoned gamers and at the same time, the games developed wer quite complex and difficult to learn for casual gamers. This scenario gave Nintendo an opportunity to develop a console and games that attract people who had not been considered by other competitors such as Microsoft and Sony. This enabled the company to lower console performance in terms of technological advancement and instead add a new feature of motion control that was more fun for gamers.
• Nintendo eliminated the state-of-the-art chip development and increased the use of ‘off-the-shelf components for its consule:
• Reduction of production costs hence reducing the unit price of the game consule.
• Nintendo has eliminate the subsidies on its game consules which has seen an increase in the overall profits.
Pestle Analysis:
In order to assess the external factors affecting the Nintendo Wii fit in the UK, we will use the PESTLE analysis (UK PESTLE Analysis, 2013).
Political Environment:
The political scene is quite stable in the UK with clear cut rules on legislation such as minimum wage and anti-discrimination laws, market regulations, trade agreements and tax system. The Nintendo Wii Fit has managed to operate in the UK with no major political interference.
Economic Factors:
The sales for entertainment and luxury goods such as gaming consules were on a decline, especially due to the global economic crunch. However, with the recovery of the global economy and the cheap price of the Nintendo Wii fit game consule, the sales in the UK market have been impressive.
Social environment:
Recently within the UK, people’s attitudes with regard to their health and diet have been changing dramatically. Consequently, the number of people joining fitness clubs has increased dramatically together with the demand for organic food. The Wii Fit has also seen a surge in demand as it can be used as an exercising tool and it has also been proven to help with children’s lack of exercise.
Technological Environment:
Nintendo Wii has recently decided to use off-the-shelf components from various suppliers rather than focusing on improving their hardware capability. This has enabled them to produce and sell the game systems at low prices but the graphics and other performance features are of lower quality as compared to other competitors in the market such as the Xbox 360 and the playstation 3.
Legislative Environment.
The Nintendo Wii fit has managed to comply with all the business rules and regulations in the UK.
Customer Analysis:
The Nintendo Wii fit has a rather surprising attraction especially to non-hardcore gamers, that is, those who are newer to computer games, younger and older players as well (senior citizens included) and females. Each of the mentioned subgroups is key to Nintendo’s future since a higher appeal means greater use and hence higher sales (Moats, 2008).
Those new to the video game market find the Wii attractive. Research show that the Wii attracts unusual players, that is those outside the usual age group of 18-34 year old make hardcore gamers (Moats, 2008).
Players in a broad range of groups are using Nintendo’s Wii. Even senior citizens are finding the Wii simple to learn and enjoyable. A number of senior citizen centres in the UK have even incorporated the Wii into their day to day programmes as a low impact kind of exercise that is also entertaining (Moats, 2008). A marketing firm, Zanthus, estimates that approximately 13% of children below the age of 12 are using the Wii (Moats, 2008). Elementary students are also using the Wii to play video games and Nintendo is developing special games specific to this market. Therefore, as this younger generation come of age, their interest in this gaming system will probably grow as well hence making the Wii a disruptive technology (Pigna, 2008).
Interestingly, the Wii is also attractive to girls as well. This can be attributed to the ease of play as well as the social interaction that this system allows. Games that are more popular with girls include guitar hero and the Sims (Damasio, 1999). According to a research carried out in Michigan State University, it showed that girls liked games that have vivid simulations, enable role playing and emphasize hand to eye coordination as opposed to first person shooting or driving games (Palfrey & Gasser, 2008).
SWOT Analysis:
Strengths:
1. Creative and easy to use game-play using a mixture of motion sensitivity and aiming devices.
2. Enabled gaming opportunities to people of ages 3-112.
3. Affordability ($250) for people of almost all economic classes.
Weaknesses:
1. Between 1999-2004, Nintendo was not in good terms with 3rd party companies who account for around 90% of the video games in a system. This led to a limit in the number of games that it could avail to its customers. This scenario has however changed and the Wii Fit has a good number of 3rd party game support.
2. Due to the focus in low prices for their game systems, the graphics in Nintendo Wii game consules are of lower quality as compared to other game systems. This has brought complaints especially from hard-core game players (Moats, 2008).
Opportunities:
1. With Sony’s exorbitant prices and the dropping sales of the playstation, Nintendo has a good chance to sell more of its Wii Fit units in the UK.
2. Nintendo has managed to fascinate fans of all age groups by their game systems. If they can consistently do so in the future game sytems, they can be sure to do well for at least another decade.
Threats:
1. With a quite unbalanced economy which is recovering from the global recession, Nintendo Wii Fit could feel the ripple effect.
2. There has been a constant rise in the cost of shipping. This may lead to an increase in the prices of the Wii thus hurting their goal to keep the prices as low as possible.
Marketing Strategies for the Nintendo wii Fit: The Four Ps;
Generally, marketing decisions fall into four controllable categories namely:
• Product
• Price
• Place (distribution)
• Promotion
Product Strategies
Since the biggest goal of Nintendo Wii fit is to involve a wider variety of people who play games, they have redesigned the system’s controllers so as to make it simple and more natural for game playing. With motion sensors, IR sensors used for targeting on the television screen and a port that allows multiple controller add-ons, Nintendo has covered it all.
So far, the Wii fit has a number of add-ons already made. It is also shipped with its own add-on known as the Nunchuck which has a joystick and two extra buttons that a useable in many other games. More addons for the Wii fit are currently being developed.
Pricing Strategies
Nintendo is trying to widen the age group of the people using the game consule while simultaneous trying to break the economic barriers. For instance, game systems for Nintend’s competitors such as YBox 360 and the playstation 3 sell at prices way above $350 for their low end game consules, with some of their high end systems reaching up to $550. On the other hand, the Nintendo is modestly priced at $250 and comes with the Wii sports game. The games are also an average of $10 less as compared to Sony’s playstation and Microsoft’s 360 games.
Place (Target Markets and strategic Positioning)
Generally, video games target the younger generation as their core market. Nonetheless, the goal of the Nintendo wii fit is to widen that market to cover all the age groups in the UK. However, even though the Nintendo offers games for a wide selection of its customers, they still develop games for specific markets. For example, Supaer paper Mario, the Legend of Zelda and Mario Galaxy are games targeted for the younger group.
Promotional Strategies
For promotional purposes, Nintendo has included one free game for each Wii Fit unit that is sold in the UK. The free game, dubbed ‘Wii sports’, has been praised as one of the best games in the industry so far. Other systems such as the playstation 3 and Xbox 360 do not offer free games with their systems, and those who include the games increase their consule’s prices by between $20-50.
Additionally, Ninteondo Fit offers Wi-Fi connection. This feature allows anyone connected to high-speed internet to game with other players online. Xbox Live, a Microsoft game consule that offers internet service does so at a charge of $7.99 per month and $49.99 per year Xbox.about.com cittnn. On the contrary, Nintendo’s Wi-Fi capabilities come at no cost and offers many updates and other online activities (Nintendo History, 2013).
Conclusion.
Nintendo’s current strategy which is popularly known as the ‘Blue Ocean’ strategy for the Wii has enabled the product to snatch the market leader position in the global market. The extra functionalities and features have managed to attract a diverse customer base of different ages and gender. The features have also enabled the game consules to find use in various industries such as the health industry, senior citizen centres and the exercise industry (Briggs, 2008). With consistency in producing a gaming experience that resonates with the majority in the society and maybe an improvement in the graphical features, the Nintendo is set to keep its title as the leader in the gaming industry.
References
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