Thursday, May 29, 2008

Differentiation: The Wii Factor

“We are not competing against Sony or Microsoft. We are battling the indifference of people who have no interest in videogames” – Satoru Iwata, President and CEO, Nintendo Co.

As Microsoft and Sony spent heavily to beef up their next gen systems, Wii has quietly taken a relatively low tech machine and proudly winning the console match. Wii is practically sold out everywhere these days, 16 months after its Dec ’06 launch - an amazing feat in this highly competitive industry.

Here’s a quick comparison for the 3 machines.

Differentiation is exactly how Wii has won it.

Video games and systems are getting more complicated. Think of Wii as the McDonalds answer to Starbucks. By offering less capabilities from its counterparts, Wii focused on being simple, innovative (Wii Remote) and fun. A differentiation strategy is effectively only when it’s valued by the customers. Xbox360 and PS3 are leaps and bounds ahead (technology) of Wii, but by focusing on game expansion, Nintendo is bringing the “fun” factors back to gaming.