Examining the Key Players of Casual Gaming: Nintendo

Arguably the first video game company to significantly expand into casual gaming, Nintendo has made great strides in expanding the gaming demographic beyond the characteristic male teen and young adult consumer segment in the last gaming generation. Instead of focusing on the incremental technology advancement that had become the industry trend, Nintendo choose to focus on a blue ocean: intuitive control. The Nintendo DS and Wii introduced touch and motion control into the video game world, making gaming much more accessible to new consumers deterred by the growing complexity of button controllers. Controlling a game  became intuitive from writing on the DS’ touch screen or swinging the Wiimote like a golf club.

This industry risk paid off rewardingly for Nintendo as the DS and Wii systems have sold hundreds of millions of units worldwide. Nintendo’s focus on innovation and creating accessible products successfully attracted new consumer segments including women and older adults to pick up gaming. Internal survey data from Nintendo shows 46 percent of Americans aged 6 to 74 using the Wii or Nintendo DS at least once in the past year – quite a significant industry achievement.

However in the last year, Nintendo has suffered significant drops in DS and Wii sales as these products reached market maturity and consumers are looking forward the next generations of systems. Furthermore, direct competitors Sony and Microsoft both recently launched peripherals that add more advance motion control to their respective gaming platform.

Market Value: A report showed that over a third of the U.S. population has not played a video game in the last 12 months, with a large proportion recognizing the Nintendo brand.  My last post already highlighted the popularity of social network games and its value of introducing non-gamers to their first gaming experience. With brand familiarity and consumer interest already established, Nintendo’s marketing drive should be to leverage the core value drivers of non/casual gaming consumers to turn product interest into purchase intent.

Perhaps Nintendo’s biggest advantage is their relative low pricing model compared to Sony’s and Microsoft’s offerings. Preliminary research indicates that Microsoft’s Kinect and Sony’s Move is having little effect on motivating new system purchases – likely due to historic hardcore branding and high product pricing. Buyers of the Kinect and Move appear to be primarily existing owners who seek to supplement their experience with the product, not new consumers. This provides Nintendo an opportunity to leverage the interest in gaming created by competitors’ marketing campaign and emphasize the Wii’s and DS’s similarly gaming experience and more importantly affordability in marketing campaigns towards these price-sensitive gaming consumers.

What do you think Nintendo can do to maintain their market leadership among so many competitors?