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How Nintendo Can "Win" E3

How Nintendo Can "Win" E3

Fri 17 May 2013 4:52pm GMT / 12:52pm EDT / 9:52am PDT
HardwareMarketing

"Effectively, Nintendo needs to relaunch the Wii U and make sure the audience understands what it is"

Is there really such a thing as 'winning' E3? There is the external victory of being the thing most talked about in the mass media, in the game media, and on social media. Those are really three different audiences: The broadest possible audience of anyone who sees, hears or reads news; the audience of gamers who are always interested in game news, and hardcore Nintendo fans. Then there's victory internally for Nintendo, by whatever standards it chooses to set. Ultimately, it's the votes cast by consumers in the form of spending that counts.

Nintendo is heading into this E3 in a difficult position. Sales of hardware and software have not been meeting the company's projections. CEO Satoru Iwata has gone on record that he intends to deliver a billion yen in profits for Nintendo this fiscal year, and implied that he may step down if that's not achieved. This puts Nintendo in a difficult position for marketing strategy, since any marketing spending has to return a profit within the fiscal year. No long-term brand-building here; Nintendo will be looking for marketing efforts that can produce solid short-term results.

This may be the reasoning behind Nintendo's decision to forego the usual massive E3 press event, instead having a smaller media event and a separate event for trade partners and analysts. Nintendo also announced it will step up its production of Nintendo Direct videos, a cost-effective way of directly reaching Nintendo fans.

Nintendo has not shared any more about its marketing strategy, but we can make some guesses. Nintendo put out a flyer at PAX East that compared the Wii U to the Wii, clearly indicating Nintendo feels gamers aren't really sure of what the Wii U is or why they should own one. Worse, if gamers are confused, the mass market must be completely baffled. Effectively, Nintendo needs to relaunch the Wii U and make sure the audience understands what it is. Unfortunately, Nintendo will have to do this in the face of what is sure to be a major push from Sony and Microsoft for their next-gen consoles. Nintendo will need to have clear, focused television ads hitting the key demographics, and those ads will need to be memorable to overcome the barrage of ads hitting the same audience.

One of the biggest weapons Nintendo could use in this battle is a price cut for the Wii U, but that is unlikely. Nintendo's already losing money on each one sold, and dropping the price $50 would just mean an additional $50 loss on each unit. That might get made up in software sales eventually, but it would have to be at least three or four titles during a time when Nintendo doesn't have all that many compelling titles for the Wii U. Hopefully we'll see some strong Wii U software for the holiday season, more than just Pikmin 3.

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14 Comments

Jim Webb
Executive Editor/Community Director

2,237 2,191 1.0
Steve, that's much more balanced article than I've seen lately. Thank you.

I would like to note that Pikmin 3 is a summer title, not holiday. And given that they will have a new 3D Mario, Mario Kart, Smash Brothers, Mario and Sonic, Zelda: Wind Waker HD, Wii Fit, Wii Sports U plus more all in playable form at E3, it's pretty safe that most if not all of them will launch by the end of the year. Nintendo isn't known for having playable demo's for games due out years later.

Posted:A year ago

#1

Steve Peterson
West Coast Editor

107 72 0.7
Marketing alone won't get Nintendo out of the spot it's in; the company desperately needs some massive hit software on the Wii U to really convince people to buy one. It can't just be the same old game with new graphics, either; there has to be some compelling new game play that only the Wii U can deliver. It will be very interesting to see what Nintendo has planned for the holidays. Mario Kart could be impressive, and Smash Brothers needs to be rescued from the last version (which did not please the fans of the original). Zelda could also be a killer title, as could a new Wii Sports... but we'll see.

Posted:A year ago

#2

Jim Webb
Executive Editor/Community Director

2,237 2,191 1.0
No doubt it needs more than marketing and the same IPs. But those are factors both in Nintendo's control. They'll have a good Christmas. That's a lock given the fanbase of those evergreen IPs. But expansion and retention of old fans will certainly take something new and intriguing.

They turned around the 3DS with a major price cut and solid software. This time, they can't count on the price cut but they will have the solid software (at least from the usual mascot suspects) but they will need some outside help or new IPs to really push things in a brighter direction post Christmas.

Posted:A year ago

#3

Adam Campbell
Associate Producer

1,147 925 0.8
For some reason I've always tied winning E3 with having a killer press conference...

Posted:A year ago

#4

Jim Webb
Executive Editor/Community Director

2,237 2,191 1.0
Adam, winning those over the past few years has come down to who can embarrass themselves the least.

Posted:A year ago

#5

Patrick Frost
QA Project Monitor

393 188 0.5
If the last 3 Nintendo systems are anything to go by, main Zelda and Mario games have been mostly excellent but always seem to be the warm up for when Mario Kart arrived. When that title hits the momentum usually gets to level where the consensus is that the platform is performing pretty well.

I'm not calling anything until Christmas about the Wii U as Nintendo have in no way pulled out any of their big guns.

Posted:A year ago

#6

Private
Industry

1,176 182 0.2
Since when is Nintendo selling the Wii U at a loss?

With next gen on the horizon Nintendo won't be the talking point in the media and among gamers at the E3, especially not in the US that is more MS centric. The Nintendo direct might have been better positioned a week before the E3 with better chances of grabing more headlines in the media.

Surely they need more games and a price cut wouldn't hurt either. I know Ninty sees it as a next gen console but the hardware power is on par with current gen and they are a lot cheaper to buy. A great selling point of the Wii was that it was cheaper and by the time it was released Xbox1 and PS2 had been mostly abandoned, but thatsnot the case this time with 360 and PS3 still going well and the majority of games still being released for them.

Posted:A year ago

#7

Steve Peterson
West Coast Editor

107 72 0.7
Werner, Iwata admitted early on that Nintendo was selling the Wii U at a loss, though a slight one; profits on one piece of software would make up the difference, apparently. The situation is unlikely to improve on the cost of goods unless and until the volume gets much higher.

The Wii's advantages were that it was half the price of the competition, and it was amazingly simple to use its unique motion control feature. The Wii U lacks all of those advantages. This makes the marketing challenge that much harder, and makes high-quality games even more important to have. Nintendo will not only want to have several must-have games for the holidays; it must convince consumers there will be a stream of such games coming in the next year. This is a tall order if third-party support is weak.

Posted:A year ago

#8

Jamie Read
Junior 3D Artist

126 64 0.5
Things will start to get interesting for the Wii U by the end of the year, Iwata tweeted this yesterday: "We will discuss new Smash Bros., 3D Mario game, Mario Kart and other Wii U titles in our #NintendoDirectNA before the start of E3".
Source: http://www.officialnintendomagazine.co.uk/49731/smash-bros-wii-u-mario-kart-and-3d-mario-game-to-be-revealed-in-next-nintendo-direct-before-e3/
It's been a case of Nintendo having to rush the Wii U out because of the steep decline in new Wii titles and to beat Sony and Microsoft out of the gate. In an ideal world the Wii U would have been launched later this year with some of these killer first-party available from launch.

Edited 1 times. Last edit by Jamie Read on 18th May 2013 8:54am

Posted:A year ago

#9

Daniel Hughes
Studying PhD Literary Modernism

436 496 1.1
I'm not convinced "winning" E3 is important. E3 isn't a storm in a tea cup, but it is a storm in a swimming pool. Gaming sites will feature dozens, hundreds of articles during E3 week. Sites such as the BBC will feature perhaps half a dozen. I also think your point about Smash Brothers was way off the mark--Brawl was the most commercially and critically successful iteration yet, selling in excess of 11 million copies. A tiny, vocal minority of tournament players took a dislike to it because Nintendo removed tricks that aided them. Hardly enough to dent the commercial viability of a flagship Nintendo property.

That being said, you've made an excellent point in the comments:

"Nintendo will not only want to have several must-have games for the holidays; it must convince consumers there will be a stream of such games coming in the next year. This is a tall order if third-party support is weak."

This is Nintendo's biggest challenge, and it was Nintendo's failure to accomplish this in 2012 that slowed 3DS down. 2013 is different for 3DS, but Nintendo don't have until next Christmas to accomplish this with Wii U if they want to avoid N64 or GameCube level sales. Nintendo need to have convinced the consumer that kept GameCube afloat to jump on board within the next 18 months. They need to have built a healthy software market that encourages continuing third party support, and allow first party content to appear on a regular basis. No easy tasks, but not impossible.

But yes, the next few months, and next few Nintendo Directs, are critical. Nintendo can't beat out the hype that will surround Microsoft and Sony, but they can do enough to beat them to consumers wallets in the next 18 months. Nintendo need to get their core base motivated and on board so that from 2015 onwards, they can concentrate on moving outside of their core base and building up a bigger install base.

I'd also point out that Pikmin 3 is most definitely not Nintendo's Christmas title, it'll be out in August globally, and that the target set by Iwata was actually one hundred billion yen.

Posted:A year ago

#10

Private
Industry

1,176 182 0.2
Must haved missed those news about the production costs. The hardware isn't exactly top notch even the GamePad isnt that advanced with a simple touchscreen that doesn't manage multitouch. But we still don't know exactly at was level the console is. Most Wanted showed that it can look better then 360 or PS3, but there are no indications yet how much better it can be.

I think the Wii was already a bit in a dilemma, it sold very good but the core Nintendo base from the past years wasn't exactly set on fire. It had some very good games like The Last Story, Xenoblades and the usual Nintendo games. If you look at the top game sales you see a lot of very casual games like Just Dance, Wii fit etc. With the current price the casual gamer from the Wii doesn't want to get the new console and I suspect the Nintendo core gamer might be more cautious now after the 3DS launch that had Nintendo introduce a price cut shortly after release.

Right now I dont see a clear message from Nintendo and the last 2 years they had a real problem at the E3. I remember watching the Wii U announcement and wondering if the tablet is the new console or not. It got better by now but still far from perfect. The general public doesn't watch Nintendo direct they read the news in the paper or see consoles on Jimmy Fallon.

Posted:A year ago

#11

Adam Campbell
Associate Producer

1,147 925 0.8
Adam, winning those over the past few years has come down to who can embarrass themselves the least.
But even then, Nintendo aren't having a conference.

Posted:A year ago

#12

Jack Pochop
Studying Telecommunications

27 16 0.6
I'm actually all for Nintendo dropping out of a big, over-inflated E3 conference. Sure, these kind of things are fun and give E3 viewers an absolute barrage of news, unreleased game footage, and surprises -- but we've recently been getting these things on a month-to-month basis. Nintendo's Direct system has shown that reveals don't have to wait until June, and gamers can get excited about new software anytime of the year -- not just Holidays and Summer expo season. Sony, too, absolutely nailed it in February, and didn't need E3 to do it.

Nintendo's real enemy is narrowcasting. This new, Direct-only form of information segments an entire audience of potential buyers. Most people watching Nintendo Direct already own a Nintendo Wii U or 3DS. They're not watching for hardware clarification, they're watching for new software. Again, while I'm all for it, Nintendo Direct often leaves mass audiences with a Yahoo or MSN filtrated version of their jam-packed streams, with only a fraction getting the news straight from the tap.

Nintendo needs more than comparison charts at PAX to boost the Wii U, and they certainly don't need a price drop. Nintendo has never marketed the Wii U. The Wii had infinite amounts of "Wii would like to play" commercials, and the Wii U received one shamefully terrible commercial reminiscent of Hollywood Squares. Nintendo needs something bold like, "Not just a Wii." They need to be straight-up with the public, who constantly assume the U as some latent peripheral.

Nintendo not pushing a huge keynote at E3? Not a problem. Nintendo continuing to narrowcast, barely market, and blur the line between last generation's Wii and this one's U? Big problem.

Posted:A year ago

#13

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