Brand Health Check: Nintendo

The gaming pioneer is struggling to break out of its handheld niche and challenge the leading consoles, writes Ben Carter.

Nintendo has always been regarded as offering something different to rivals such as Sony and Microsoft. But with gaming becoming mass-market recreation and manufacturers being forced to cater to a broader audience, the Japanese games giant has a fight on its hands to ensure that it does not become pigeonholed as a niche brand.

The games console arena has never been more fiercely competitive than now, as evidenced by the high-profile launch earlier this month of Microsoft's next-generation console, the Xbox 360, which analysts are viewing as the software giant's first serious strike against Sony's market dominance.

Although both rivals have their own next-generation devices slated for next year, Nintendo's launch of its next-generation console, Revolution, will be crucial in its fight to maintain its status as a credible third-place contender.

Last month it announced that net profits were down 21% to Y36.6bn (£179m) for the six months to 30 September and admitted that sales of its Gamecube console were weak and development costs for the Revolution had been higher than expected.

While competition from Sony's trailblazing PlayStation 2 hit Nintendo hard, in the past it has been able to rely on the handheld games market, where it was the clear leader. However, Sony's much-trumpeted launch of the PSP this summer is a major threat to Nintendo's market dominance.

Although principally a games device, the PSP also plays music and films and Sony is brokering deals with major broadcasters and film studios to ensure its appeal to an audience beyond the traditional games market.

Nintendo is fighting hard with its next-generation handheld console, the DS, and is launching Wi-Fi gaming in the UK through a deal with BT.

The DS has sold almost 1.4m units in the three months to the end of June.

The company has also launched Nintendogs, a virtual pet game on the DS, which has received reams of press coverage and industry observers believe could be the future of Nintendo.

So how should the company set about building mass-market appeal while retaining its point of difference?

We asked Matthew Palmer, planning director at Bartle Bogle Hegarty, who worked on the launch of the Xbox, and Mike Welch, managing director of Claydon Heeley Jones Mason, which handles PlayStation's direct marketing.


Nintendo has always disregarded gaming's category conventions. As a result, it has fans of unparalleled dedication, but it has been repositioned as a niche player by more mainstream competitors. Nintendo is for serious gamers, and those who like to be different; people who don't want their mates to laugh at them choose the lifestyle statement that is PlayStation.

Comparing hardware illustrates this. The PSP - Sony's challenge to Nintendo's dominance in handheld gaming - offers a huge screen, slick design, familiar games and controls, and the ability to watch movies on the go. Nintendo's DS has an unfamiliar touch-screen control system and Wi-Fi connectivity.

In the next generation of home consoles, the PS3 will essentially be a turbo-charged PS2, while Nintendo's Revolution has focused less on processing power and more on an entirely new (that is, unproven) control system - which has apparently been designed to make gaming more accessible to those still unconverted by PlayStation.

A victim of category reframing, Nintendo has to reposition to survive.


- Reassert dominance in handheld gaming: use the DS to position it as a social activity.

- Focus DS messages on the benefits of Wi-Fi connectivity. Create events and spaces where gamers can play together.

- Run roadshows at shopping centres and set up Revolution experiences in temporary stores to entice non-gamers.

- Leverage unique software franchises - old and new - to maintain one of Nintendo's key existing points of difference.


There is something quite depressing about the Nintendo brand. For some people it is still stuck in the 80s when, alongside Sega, it ruled the roost. For others it is too closely associated with Mario - kids' stuff, really.

And that's the problem: the brand relies too much on its heritage. When Super Mario Bros first appeared it was exciting and ground-breaking, but Nintendo gives the impression it has failed to move on, and its appeal is nowhere near as broad as its competition. PlayStation, for example, extended from hardcore gaming to family entertainment in the living room by introducing software such as EyeToy.

My children both started out with Game Boy Advance. But the quality of experience wasn't great and when it came to buying their first console, the Gamecube wasn't even on their shopping list.

Even retailers are unexcited by Nintendo. When asked recently what had been the highlight of the year, 54% said the launch of Sony's PSP, compared with 2% for Nintendo's DS. There's a lot riding on the launch of the Revolution.


- Create a branded experience in retail and get out and about. You will now find an Apple store in Bluewater - that is where Nintendo needs to be.

- Broaden the brand's appeal beyond hardcore and retro gaming. It's too niche.

- Improve data collection to gain a better understanding of gaming preferences and gaming occasions.

- Don't deny the brand's heritage, but don't make it look like it is stuck in the past.


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