How will Nintendo Re-engage its Wii base in 2011? - Nick Williams - MediaBizBloggers

As we approach the end of another fascinating year in the videogame biz, it seems appropriate to reflect on the current state of the console wars and look ahead to what's in store for 2011. While it is true that 2010 was the year of Zynga, Angry Birds, and the emergence of Cloud Gaming (just to name a few trends), this post is all about the ongoing chess match and arms race between Nintendo, Microsoft, and Sony.

Most of you have probably heard about this holiday's must have gaming gifts: Microsoft's Kinect for Xbox 360 and Sony's PlayStation Move. In case you haven't been paying attention, these new peripherals essentially level the playing field when it comes to motion control gaming, a side of the business that Nintendo has dominated for several years thanks to the Wii. During this time, Nintendo attracted a new breed of gamers no longer alienated by complex controls or the antisocial stigma that pervaded the gaming business. For newbies of all ages, the Wii was easy to pick-up-and-play and made people feel like they were part of the game. Taking a page out of Apple's marketing playbook, Nintendo positioned the Wii as fresh, yet familiar and successfully capitalized on the mainstream potential of the technology. But as new gamers around the world embraced the Wii, what did the Mario and Zelda loving Nintendo loyalists think? Nintendo faced the ultimate challenge in rapid brand growth: how to appeal to a new audience without upsetting its core.

Four years later and the signs of this inner brand turmoil are starting to show. In October, Wii software sales were down 26 percent and hardware sales were down 54 percent. Many will point to market saturation, but the more likely explanation is the lack of engagement from both the mainstream and the core. According to recent data from Ipsos OTX's GamePlan Insights, the mean hours spent playing the Wii is half of the PS3 and Xbox 360. On the weekend, Wii owners spend an average of 1.8 hours playing the Wii, compared to 3.8 hours for the PS3 and 3.6 hours for the Xbox 360. The word-of-mouth that propelled the Wii to the top has slowly dissipated, and now the console is gathering dust on many household shelves. Some mainstream gamers have moved on to social and mobile gaming, while core gamers are spending their time on the PS3 and/or Xbox 360.

With PlayStation Network and Xbox Live, the lifecycle of any first or third-party title can be extended considerably. Just last month, Microsoft announced that there were one million concurrent players of Call of Duty: Black Ops on Xbox Live. While this is an extreme case, online strategy is now a substantial part of any publisher's marketing plan as evidenced by the sheer number of demos, trailers, and expansion packs available in the respective online stores. It is a valuable way for publishers to continue the conversation with the customer past the point of sale, and build communities of evangelists. Of course Nintendo has an online network (via Nintendo's Wi-Fi Connection), but it has not been adopted with the same fervor as PSN or XBL. Data from GamePlan Insights shows that Wii owners play online only 29% of the time, compared to 50% for the PS3 and 54% for the Xbox 360.

Looking ahead to 2011, Nintendo is already looking for ways to differentiate from its competitors. The previously announced 3DS will be critical as Nintendo looks to grab the handheld/mobile momentum back from Apple. But on the console front, it is Nintendo's turn to make a big splash. Software for Kinect and Move will continue to improve, thereby diminishing the unique value proposition of the Wii. Some have speculated that a Wii HD is on the cards, while others believe they may continue to invest in 3D gaming. (Maybe a Wii 3DHD?). Whatever the case may be, there is one fact that shouldn't go unnoticed: the Wii still has the largest installed base of any of the current-gen consoles. The key is to activate these users and bring the Wii to the forefront of the living room again. In my view, a successful 2011 for Nintendo won't necessarily be measured in new hardware sales, but in the time spent engaged with hardware that has already been sold.

Nick Williams is Director Gaming Insights for Ipsos OTX MediaCT. He joined OTX in 2008 to lead the development and launch of GamePlan Insights, an innovative tracking product that combines behavioral and attitudinal metrics with a comprehensive suite of integrated data sources to forecast the lifecycle of a videogame. He can be reached at nick.williams@ipsos.com.

Read all Nick's MediaBizBloggers commentaries at Ipsos OTX MediaCT.

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