Core Marketing: How Nintendo is Selling the Wii U in the UK
"We know the people who are buying a Wii U at launch are core Nintendo fans."
Tonight at midnight, stores across the UK will open at midnight to begin selling the Wii U, the first home console to hit the market in five and a half years. For Nintendo, it's something of an odd prospect - how to emulate the runaway success of the Wii's launch when so much of the market share it cornered was outside any other console's target demographic.
Are the millions of families who invested in that console ready to buy another one, do they understand the differences and do they care? We chatted to Nintendo's UK Marketing and PR director Shelly Pearce about the company's plans to reinvent the wheel again, who is being targeted and how, and came away with some interesting answers.
Q: You've got the official midnight launch tonight, at HMV Oxford St, as well as other stores which are opening too, what sort of turnout are you expecting?
Shelly Pearce: Well, we've already got people down there now, I think they've been down there since Saturday - so certainly the queue outside HMV is building up already. We've got a lot of pre-orders, but we do have stock available for launch day tomorrow. We're anticipating that there's going to be a good turnout tonight at the official launch, but we also know that there are GAME stores opening all across the country, so we're giving plenty of people the opportunity to pick up the Wii U as the clock strikes midnight.
Q: Events like these highlight the strong relationship between yourselves and bricks and mortar retailers, something which has undergone both scrutiny and change over the last couple of years. How do you feel that relationship has changed?
Shelly Pearce: Retail is still very important for us, I think it's really important to have presence on the high street, and we know that a lot of people still choose to go into a store to buy. While we are seeing more people shopping on line and downloading games directly through the console, retail is still a very important sector and I can't see that changing in the years to come. I don't think that there's going to be any dramatic change, certainly not in the immediate future.
"Retail is still very important for us, I think it's really important to have presence on the high street.
Q: In terms of the Wii U's marketing, I would imagine that you can't talk specific numbers, but how does the budget and portfolio compare to the marketing for the launch of the Wii?
Shelly Pearce: The campaign for the the Wii U is a very similar size to the one we had for the Wii, it's a very similar spend. In terms of the focus... for this launch we have been on TV but we've very much focused a lot of our activity on sampling, trying to get the Wii U into the hands of as many people as possible because it's so important to play it and try it for themselves.
Also, I think the big difference with the Wii launch is that a lot of our marketing has been online. Obviously we've been very much out there talking to core Nintendo fans and we know that online is where a lot of them are gathering most of their information. So it's become a much more important tool for talking to them. So we've had a lot of traditional online advertising etc, but we've also been filming the sampling activity and people's responses and reactions once they've played Wii U - we've been uploading those to YouTube.
We hope to launch tonight a YouTube channel that's very specifically focused on the Wii U and people's reactions, building up a bank of those. We hope people will be encouraged to be a part of that, adding their own reactions and comments to it. So that will be a large part of our marketing activity post-launch. Obviously we'll also be moving into more traditional mediums for advertising like TV and print.
Q: Is that a response to the way in which you saw the buzz building around the Wii - that idea of it spreading by word of mouth as much as direct advertising?
Shelly Pearce: I think the market has moved on. I think with the Wii we introduced so many more people into videogames that we're talking to a much broader audience now. But I think it's also a symptom of the way that we are consuming media these days, I think the way that we're doing that has changed fundamentally. I think people might see a TV ad but then go online to see what people think about it, to get comments and recommendations. So I'd say it's more a sign of the times than any specific learning from Wii.
The one thing I would say is that a big part of our marketing has been about talking directly to core Nintendo fans, we know they're active online - that's not just a good place to show them information, it also gives you a bit more of an opportunity to go into a bit more depth than a thirty second TV ad might.
Q: These core Nintendo fans, are these people who are long term fans, who've been playing for several hardware generations, or are these new users who only play on Nintendo platforms?
Shelly Pearce: We're talking about people who've been with us for a long time, our avid fans - like the ones who are queuing outside HMV as we speak. I think if you look at our software line up for launch, I think we've got one of the strongest software line ups ever, about 24 titles for launch day.
"We're talking about people who've been with us for a long time, our avid fans - like the ones who are queuing outside HMV as we speak."
If you look at what we've got coming, we've obviously got Mario and family games, but we also have strong, core gaming titles to appeal to a broader audience. So certainly for us a very key part of our plan is that we're delivering software for those really avid Nintendo fans that have been with us for a long time.
Q: That unification of the casual and core audiences on a single console is something we've heard a lot, ever since the Wii U's reveal. Are you aiming at the same demographic as you were at the launch of the Wii or are you trying to appeal to two quite disparate groups?
Shelly Pearce: For us at this stage, we know that the people who are going to be interested in buying a Wii U at launch are those core Nintendo fans. So that's very much who we're talking to at the moment. At some point next year we will move on and talk to a broader audience - we've got games like Wii Fit U coming at some point, but we do see that as something we'll looking at more next year rather than this year.
Having said that, as I mentioned before, we brought so many people into videogames with the Wii that I do think there'll be a mix of Wii fans who want it for things like Mario and Nintendoland and others who want it for more core games. In terms of our target focus, though, it is very much on that core Nintendo fan at this stage - they're the ones who are going to go out and buy at launch.
Q: The launch line-up is very strong in terms of its third party support, in fact I think that the two best metacritic-rated games for Wii U are from third parties: Darksiders 2 and Batman. Was there a conscious decision to bring third parties closer into the fold for launch, to allow them to dictate the early adopting audience a little?
Shelly Pearce: Yeah absolutely. Third-parties are really important to us and as you've said, the day one line up demonstrates that. It also really helps us to bring a range of games, particularly some of the big hitters in there that we know really appeal to the core fans. So I think if we want to really cover all of our bases and provide games that these people really want then we need to be working really hard with our third-parties - it's definitely a huge priority for us.
Q: With the Wii Mini now unveiled, albeit slightly unintentionally, are you concerned that there'll be customer confusion regarding SKUs?
Shelly Pearce: Well we've certainly made no announcements regarding the Wii Mini and the UK market, so I really can't comment on that.
Q: What sort of hardware numbers are going to be available for the launch? Am I right in thinking that there were around 30,000 pre-orders?
"We do anticipate that at some point stock might be a little tight at some retailers, but we have very good shipments coming in, so we're confident that we can meet demand right through up until Christmas."
Shelly Pearce: We don't have an official number, but they are high. We do have some stock available for launch day, even though we have those really high pre-order figures, the key thing is that we're trying to get as much stock out there as soon as possible. Then we have regular shipments coming in from now right through to Christmas.
We do anticipate that at some point stock might be a little tight at some retailers, but we have very good shipments coming in, so we're confident that we can meet demand right through up until Christmas.
In terms of official figures we don't have an absolute local number to share with you, but I will confirm that we have 5.5 million being shipped globally by the end of our financial year which is the end of March 2013.
Q: Are you able to give us any idea of the margin between the pre-orders and the number in the country now?
Shelly Pearce: I can't, I'm sorry.
Q: Will there be a big surge before Christmas?
Shelly Pearce: They're coming in daily and weekly, so we have got stock coming in all the time. That's our key priority in the UK, we just want to make sure that we've got as much stock as possible in stores so that as many people as possible can get their hands on it.
I think we're quite confident with the numbers coming in that we will have enough in store. There might be the odd occasion were it might be a bit patchy, but there'll certainly be more being shipped in pretty quickly after that.
Q: And is there any conscious management of that stock pipeline in order to, perhaps, artificially inflate, perceived demand?
Shelly Pearce: No, we'd never do that. I don't think it's in anyone's best interests. I think for us we want to get as many in as possible as quickly as we can, so that's very much what we're doing - we see no benefit in not doing that.
Q: Sales numbers for the Wii and Wii U together over Black Friday weekend in the US were 400,000 for the Wii U and 300,000 for the Wii, which seems healthy, but I thought there would be a bigger margin than that. Does it worry you at all that you might either machine might be cannibalising the other?
Shelly Pearce: It's interesting. I know the Wii U figure was 400,000 for the first week in the US and I wasn't aware actually that it had had such strong Wii sales, but I think it is a very different market here, that's not what I would expect to see in the UK. I mean I think that Wii U will definitely be the stronger of the platforms and certainly that's very much our focus here in terms of all our marketing activity and all our efforts.
As I say I can't really comment on the situation in the US but I wouldn't imagine that would be a situation we would see in the UK.
Q: And do you have any expectations internally for first week sales or by end of year sales?
Shelly Pearce: Sell out. [Laughs]
Q: You think as many as you can get out will be going?
"We tend to just do our own thing without focusing too much on what everyone else is up to. But I think ultimately the consumer will decide."
Shelly Pearce: Yeah, I think so. Actually, I think having said a sell out I'd hope that we sell what we've got but still have something there for people buying. So I think the key for us, as I've said, is we want to get as much as we can in and hope that it's selling through. But we don't have any specific sales target.
Q: And what about in terms of your direct competition? 360 is still selling very strongly in the US, I think it managed 700,000 last week. Obviously it's at a heavily discounted price point now so it's got that advantage, but do you see it as a competitor in your direct market over this Christmas? Or do you think that it attracts a different type of customer?
Shelly Pearce: Well you know Nintendo is like, we tend to just do our own thing without focusing too much on what everyone else is up to. But I think ultimately the consumer will decide. I mean obviously we are the only new hardware launch this peak season, and obviously that stands us in a really good position. We've seen from pre-orders and just what we've been hearing online that there is big demand for it. So I think we're in a strong position. How that eventually plays out in terms of other people in the market then I guess it'll be up to the consumer to decide.
Q: Obviously you watch the sales figures of competitors and your own machines quite closely. Looking at some of the sales figures for the Vita, which has no doubt been a huge disappointment to Sony, and could cause them a lot of problems, does that sort of indication of a slightly declining market give you any cause for concern?
Shelly Pearce: No, I think we focus more on the sales of our products, and we've seen that 3DS and 3DS XL sales have been really increasing, so I think we're in a very good place with that. And obviously we've got the white 3DS XL bundle which we've just launched, which again has got off to a good start. And I don't know if you've seen one of these white 3DS XLs, I've just got one on my desk at the moment. It's beautiful. I'm very pleased with it.
So I think in terms of our market I think 3DS is in a really good position. Wii is selling, not big numbers, but you wouldn't really expect it seven years into its life cycle particularly due to the fact that we've got Wii U launching tonight. So I think we're in a comfortable place and it'll just be really interesting to see what happens over the coming weeks and months.
Q: I think I saw a confirmed report that Nintendo has stopped making Wii games, it's now all full steam ahead on the Wii U and the 3DS. Are you expecting third and second parties to continue making games for the Wii?
Shelly Pearce: I'm not sure of third party plans on Wii but certainly we're really focused on Wii U, and I think we'll see that more and more next year. Certainly our focus is Wii U.
Q: One of the things that's shown great success for you in the last few years is this sort of iteration on single pieces of hardware to seek out slightly more niche markets. As you mentioned,it's been doen with the XL and the various different colours, and now the Wii Mini for Canada. That seems like a sensible strategy. That is something you're presumably going to be continuing with the Wii U?
Shelly Pearce: Yeah, I mean I can't really talk about the long term plan is for Wii U in terms of different SKUs as we haven't launched the first one yet, so that would be premature to discuss that! But certainly looking at the DS and DSi and DS XL Nintendo is always looking at ways to enhance its hardware and the experience for the gamers.
"My hope is that the charts will be pretty dominated by Wii U software next week."
So with the XL it was about we could deliver a bigger screen which gives people a bigger view into their games and different colours to appeal to different people etc. So that's always something that we've looked at, but it's just too early to be talking about what will be happening in next phase of Wii U, so to speak. We're just focused on getting tonight nailed and getting through Christmas!
Q: Last week Reggie Fils-Aime said that the Wii U is the first console that Nintendo has launched without having a straight profit margin purely on the hardware. He also said that it becomes profitable after a single game is sold. What sort of attach rate do you have predicted for it?
Shelly Pearce: To be honest we don't have a figure that I'm aware of in terms of how many games we expect people to buy when they go in, I guess it will depend. Obviously for people buying the premium pack then it comes with a piece of software. I think my own opinion would be that if people are buying the premium pack with one game there's a chance they're going to buy another game in the run up to Christmas, or maybe buy the console themselves, request a piece of software for Christmas. But we don't have a sort of formal attach rate.
Again, we'll probably get a better idea of the coming weeks once we see the sales figures coming through, which I guess you guys get anyway from Chart-Track. So I'm not sure, I guess again we'll just wait and see. I mean there's a nice choice of games for people to purchase, I think particularly the people who would normally be buying on launch day are the more core, avid fans, and are more likely to pick up another piece of software while they're buying their hardware onm top of the one that comes with the premium pack.
Q: Outside of NintendoLand, what do you expect to be head of the Wii U chart at the end of next week?
Shelly Pearce: New Super Marios Bros U and ZombiU I think, but again, it's a good line up. My hope is that it will be pretty dominated, the charts, will be pretty dominated by Wii U software next week. But I think if I was to call it I'd say Mario and ZombiU.
Q: You mentioned earlier the difference in the UK and US markets, what do you see as unique about the UK market?
Shelly Pearce: I'm very focused on the UK market, so I wouldn't want to presume the subtle nuances of some of the other territories, but I think the one thing we do know genuinely about the UK is it's quite an early adopter market, so we tend to be high consumers generally of new technology, I think things sort of take off quicker here, just if you're looking at the rest of Europe - not Japan, because that's in a whole different league of its own. So I'd like to think that we'd be getting a strong share of Wii U sales because of the market we tend to always be consumers who are avid adopters of new technology. And I think you see that across all types of new technology.
The Wii U is available in the UK and Europe from November 30, 2012.