Nintendo’s Blue Ocean strategy

I found some days ago a very nice article about Nintendo’s “Blue Ocean” business strategy. I promoted some years ago the idea of casual PC games in Romania and at that time I saw some studies telling that women are the biggest consumers of casual games. So what did Nintendo almost three years ago? Created a new market for the brand targeting women and families. Did it work? Damn, the risk was big but they “touched” the jackpot.
The article was published by and is signed by Lucy Barrett. Enjoy!
For the past two years, Nintendo has been dominating Sony’s PlayStation and Microsoft’s Xbox. But only three years ago, the company seemed so far behind that it looked as if it was going to retreat from the videogame market completely. Certainly, neither Sony nor Microsoft saw Nintendo’s resurgence coming. And neither did I.

Just over three years ago, the company’s marketing director, Dawn Paine, suggested that Nintendo could expand its audience to include more women and families. At the time, it seemed unlikely to work. Gaming may have moved beyond nerdy, teenage boy’s bedrooms, but no brand was specifically targeting women or families. And, I thought, none should. But I was wrong.

Nintendo did something that other beleagured brands could learn from: it stopped attempting to catch up with its competitors and went after a new market. It initiated a so-called “blue ocean” strategy – the notion of creating a market where previously there wasn’t one. This stemmed from the realisation that “the current waters” – the 15- to 30-year-old males traditionally targeted by the games industry – were “over-fished”, and that there was a vast, untapped opportunity in the neglected female and older male segments. Not only did this strategy sound like a load of gibberish created by so many consultants, it was also a huge risk. Did this market really want games consoles? And what about Nintendo’s existing customers?

The campaign began in the UK with a Brain Training ad produced by Leo Burnett and featuring Nicole Kidman, which certainly had “cut-through” and bought column inches. But Kidman is so far beyond Nintendo’s target audience that I’m not convinced she really resonated with them. Certainly, in 2007, Nintendo had a public falling-out with Leo Burnett and promptly appointed the small but hungry Karmarama.

Karmarama decided to ditch Hollywood A-listers but stick with celebrities. By bringing in Zoë Ball and her dad, Johnny, the Redknapps, Girls Aloud and Fern Britton, the Nintendo DS and Wii seem a lot more accessible. The ads may be dull as ditchwater but they have also – current news excepted – worked. I now think that the Redknapps are a pretty run-of-the-mill family. I also think their Wii brings them closer together – an extraordinary achievement given gaming’s previously antisocial image.

Crucially, Nintendo has maintained its core gaming audience, while turning a couch-potato pastime into a full work-out. Sony and Microsoft are now, unsurprisingly, also on the case. Microsoft launched a pre-Christmas campaign aimed at making its Xbox appear more family-orientated, along with the introduction of Lips, a karaoke game for up to four people with appeal across all age groups and both sexes.

But the funny thing about all of this is that there is not anything particularly special about the Wii. Compared with the PlayStation 3 or Xbox 360 it has pretty standard functionality, which means that no amount of ads shouting about clever technology or controllers for the PlayStation and Xbox is going to lure away Nintendo’s new audience.

This leaves Sony and Microsoft in a difficult position. Over the years, TBWA has created some beautiful and creative advertising for PlayStation (although now that its other client Apple is moving more into the gaming market, it may be forced to choose between brands), but these ads don’t give anyone but traditional gamers a reason to buy. If PlayStation wants to expand its audience it is going to have to rethink its entire marketing strategy, not just commission more sexy ads.

5 thoughts on “Nintendo’s Blue Ocean strategy

  1. Nintendo came out with something different with the Wii, and I think that is where there real success lies. It appeals to a way larger group of people. The wii appeals to Grandma just as much as it does to her geeky techy grandson.

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