Product Differentiation Analysis Nintendo Wii

The "Wii" gaming console was first introduced into the video gaming world in November of 2006 by Nintendo. This console was the first of its kind to actively involve gamers' physical participation through movement within computer game play. Previous to the release of the Wii there had been no such gaming console released that actively involved its gamers in such a way. The competitive advantage was gained by Nintendo through the idea of the innovative wireless controller. This controller which could be used as a handheld pointing device could detect movements in 3 dimensions.

This new development in technology enabled the Wii to allow its users to interact with the game through physical interaction. Games such as bowling, tennis and golf were just a few developed for the Wii. Within these games the remote would be represented as a bowling ball, racket or club and any hand gesture made by the user would be easily replicated within game play. This development revolutionised the gaming Industry and increased the quality of game play significantly by providing more entertainment for its user.

Nintendo had cleverly managed to associate the Wii with exercise, fun and active participation, rather than the stereotypical view of laziness which had been associated with previous gaming consoles. The Wii Gaming console was developed by the worldwide renowned Japanese gaming company Nintendo Co. , Ltd (Nintendo). The company was founded in September 1889 by Fusajiro Yamauchi and its main headquarters is located in Kyoto, Japan [1]. Nintendo's main business function is to manufacture leisure equipment for home use [1]. Nintendo had over 4,700 employees listed within its workforce during the year 2011 [1].

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Nintendo is listed as Japans third most valuable company with a staggering market value of over US$85 billion [2]. Nintendo has shipped a staggering 94. 97 million units of the Wii gaming console since its release in 2006 [3]. Typically most gaming consoles are targeted toward the younger market between 5 and 22 years. The strategy employed by Nintendo with the Wii was to broaden their target market and focus on people of all ages. In doing so the Wii was able to tackle into a niche in the market which its main competitors Sony and Microsoft had overlooked.

The business strategy employed was not to primarily steal customers from their competitors but rather to focus on attracting new gamers of all ages and fitness levels. The Nintendo Wii was launched in Japan in late 2006. The idea behind the Wii was developed by a videogame creator called Shigeru Miyamoto [4]. During the first week of sales over 600,000 units were sold in Asia alone [4]. The Wii operates using a wireless remote called a "Wiimote". The wireless remotes use technology which detects the movement of the remote through movements made by the user.

The remote links to the console through a sensor bar which uses infrared LED, accelerometers and triangulation to pick up the movement of the remote. The required movement of the remote needed to play now means the gamer has to move as opposed to traditional gaming of sitting down. The "Wii Fit" is a version of Wii which promotes a healthy gaming environment through over 40 different activities such as yoga and skiing which can be played as an exercising method. Nintendo differentiated the Wii from other gaming consoles available on the market.

Unlike the competing companies Nintendo didn't follow the usual path of incorporating greater hardware and more computing power. Nintendo focused instead on the gaming experience and developed new technologies such as wireless and motion sensor controllers. The new gaming technology meant the console was now more easy to use making it appeal to a larger market area and a new customer base. The console could also be used as a keep fit method with attachments for exercising giving the console an advantage over competitors. A strategy employed by Nintendo was the Blue Ocean Strategy.

Nintendo used advertising to obtain a new market space for the Wii which had not been previously tried [5]. Nintendo set a product strategy in place which was to make the Wii appeal to a large market of both male and female and of all ages at a low cost price. Pricing was also important for the target market so price bundles and deals where used where a console and fitness pack could be purchased cheaper as a combined unit. A branding strategy was also in place at Nintendo where the Wii was promoted as a cheap and fun party console with the advertising containing people and families playing and having fun with the Wii.

The gaming market is a highly competitive one with two other large companies competing namely Microsoft Xbox and Sony PlayStation 3. The Bertrand Model is used by Nintendo as a method for competition economics. Both competitors to Nintendo make losses on their consoles and make up for the losses through game sales. Wii was launched at a new customer market rather than as a competitor to the other two products. Will was targeted at a wide market range for people and families of all ages.

Nintendo didn't focus on the high end graphics but instead on a simple, fun and easy to use console which could be used by all. Nintendo set about increasing the market to a wider range with more buying power than the traditional young market. The Wii Fit was launched as a healthy gaming option mainly targeting women. The Wii Fit was marketed as a method of preventing osteoporosis with mums and busy career women seen as being the main target market. Features ranged from strength training and yoga to aerobics and balance games.

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