What a difference 18 months makes. Back in the Spring of 2009, Nintendo was still trouncing the competition in monthly sales of both home console and portable video game hardware.
Not all was well, though. The house of Super Mario Bros. was already watching Wii sales decrease exponentially in its native Japan. Sales of the Nintendo DS have also eroded dramatically.
These declines coupled with the slipping Yen have led Nintendo to report its first operating loss in seven years.
Nintendo has said it will be unable to deliver the 3D version of its DS portable games console in time for the Christmas shopping season.
With its main rivals, Sony and Microsoft, selling their own motion controllers this Christmas, Nintendo will be the only major console maker without new hardware on store shelves.
Brand health diagnosis
Utku Tansel, head of global toys and games, Euromonitor International:
By delaying the launch of its 3D console to next year, Nintendo is clearly missing a very good opportunity.
Christmas is the most important period for toys and games sales and, having suffered from declining Wii and DS sales in 2010, this could have undoubtedly been a turning point for the company.
With Sony’s PlayStation Move motion controller already at market and Microsoft’s Kinect for XBox 360 (Project Natal) hitting the shelves just in time for the festive season the competition in video game consoles is getting tougher.
Increasing competition from Apple and its iOS offerings also represents a serious threat to Nintendo’s profitability.
It is still far too early to comment on how the 3D console will perform when it is launched early next year.
However, Nintendo has one crucial competitive advantage — its dominance in the family and ‘non-gamer’ market. Its marketing campaign with Moulin Rouge star Nicole Kidman, who was the face of the Brain Training game from Dr Kawashima — which measures users’ speed and accuracy in completing aptitude tests — clearly targetted these consumer segments. More celebrity endorsement campaigns are almost certain to follow. 2011 will definitely be an exciting year to watch and play.
Adrian Roche, digital lead, OgilvyOne Japan
The delay in the release of Nintendo’s long-anticipated 3D gaming console certainly means missed opportunities for the company.
While Nintendo appears to be hurting from the stronger Yen, missing an important chance to increase revenues such as that which the shopping extravaganza Christmas affords, plays against it.
But let’s be clear, this will not kill the company. In my opinion the move shows a conservative, carefully thought-out strategy that allows Sony and Microsoft to release their new toys first.
Will Nintendo see recovery when the 3D console goes on sale in the New Year? Absolutely. As Nintendo says, releasing the new console at this time won’t allow them to produce enough units to hit the holiday season in good shape, but again I see this as a way to generate more expectation for later on in the game world contest, and to stand out better.
This appears to be especially so since the 3D console will offer licensed 3D content provided by TV networks and other content providers which will then put Nintendo in a much stronger position to compete against the iPod Touch. For marketers eager to play new games, just wait, there’s a new channel opening up in the field of marketing with not just 3D, but also its competitors.
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