-Nintendo won Ad Age's "Marketer of the Year"
-Beat out Apple
Question: Can a new product not only radically revive a company but also reinvigorate an entire industry?
In much the way Apple made music aficionados out of mere music buyers, Nintendo via its Wii system has created a passionate group of devotees out of people who previously couldn't have cared less about video games. Wii broke open a market long confined predominantly to young men and welcomed in the rest of the family.
"They have absolutely changed the industry," says Julie Shumaker, VP-sales for in-game agency Double Fusion and former Electronic Arts national sales director. "They brought people who don't consider themselves gamers into gaming. Data show people ... still don't consider themselves gamers -- and they own a Wii. Sheer marketing brilliance."
Born in marketing
One might argue that a hot product with innovative features and styling is not a marketing coup. But Wii and the handheld DS, along with their innovative software titles and accessories, were born in marketing.
Stocked with family-friendly games and the motion-sensing Wiimote that gets couch potatoes on their feet, Wii embraced all entertainment-seeking consumers. Entire workouts are built around Wii, as users shed pounds by playing games. Nintendo is extending its influence beyond the world of gaming to make its mark on how mass audiences interact.
"Just look at the way people consume entertainment today. The idea that you would spend hours playing video games is just not real anymore," says Robert Matthews, senior director-consumer marketing at Nintendo of America. Wii can just as well attract users for a quick set of tennis as it can for an uninterrupted afternoon of play.
"A major insight that Nintendo had early on was that they saw that gamers were getting bored, even though they didn't know it yet," says Perrin Kaplan, VP-marketing and corporate affairs at Nintendo of America.
Gamers and nongamers
Video-game sales were starting to flatten in North America. In a dash of in-home market research, Nintendo executives saw their own families divided into gamers and nongamers. Instead of a problem, they saw an opportunity.
So while other video-game makers were busy trying to incorporate gamers' intense demands into their next-generation hardware, Nintendo set out to create products that could change the dynamics of gaming and expand the audience well beyond what it had been before.
MARKETER OF THE YEAR
3. Al Gore
Wii made its debut last November with $200 million in marketing support, but Nintendo and its agencies had been forming the game plan since January 2006.
It began almost as a study in how to ignore your best consumers -- in this case, the young males who dominate gaming. If Nintendo had followed the traditional road map of shooter games popular with the Microsoft Xbox and Sony PlayStation crowds, there likely would be many more powerful and expensive boxes gathering dust in the gaming aisle.
Nintendo has "always had a wonderful conviction about the market they will own," Ms. Shumaker says. "They saw Xbox and PlayStation duking it out over tech specs ... and realized, 'Hey, let them go ahead and let them fight it out over the 18- to 34-year-old males. We can expand the market.' "
Nintendo executives and designers conjured up a new target. And it began to look like, of all people, a mom. They settled on the household power purchaser -- or at least the one with veto power.
"When Nintendo contacted me, I said to them, 'You must have the wrong person; I don't even know what Nintendo does,'" says Tracey Clark, a mom, photographer and blogger who was one of the first Wii Ambassadors.
Ms. Clark and other Alpha Moms, such as Stefania Pomponi Butler of the CityMama blog; Linda Perry, who founded online parenting community Peachhead; and Jennifer Lauck, a creator of Mommybloggers, were influencers but not gamers by any stretch of the imagination.
Ms. Butler says her 38-year-old husband was at least "an old-school gamer," but even he hadn't picked up a controller much since his Atari and "Space Invaders" days.
Yet Nintendo invited her, like the others, to become a Wii Ambassador in a program that began before the November launch and continued after the system's debut. GolinHarris, Los Angeles, devised the ambassador program and handled an aggressive press push for the Wii.
The "ambassador" title, though lofty sounding, basically meant hosting a Wii party for 30 or so like-minded friends. Ms. Butler's "Moms Night Out" drew 27 maternal units -- no kids or dads -- and was a "huge, smashing success," says Ms. Butler, mother of a 3-year-old and a 5-year-old. "Everyone who came who didn't already own a Wii ... ordered one or two. Plus a lot of them are bloggers, and they all blogged about what a great experience it was." Ms. Clark says the same thing happened at her party.
Appropriate for a tech-driven company like Nintendo, it was word-of-mouth marketing that started at the grass roots and then spread digitally.
With the Alpha Moms, Nintendo did more than just ring sales. Aside from converting a bunch of nongamers into customers, it created fans and advocates for Wii gaming.
"My perspective as a parenting blogger who gets hit up big time by PR companies all the time is [Nintendo] really did it right," Ms. Butler says. "You can send out products to people all day, but they took the time to come to my house and set up a party. ... If they had just shipped me one, it would probably still be in the box."
That careful attention to detail infused Nintendo Wii marketing pre- and post-launch. Along with the influencer moms, Nintendo extended the Wii experience to vacationers by placing units on Norwegian Cruise Line ships. Wii also reached out to senior-citizen-home residents, concertgoers via the Nintendo Fusion Tour, college students and mall rats.
It was Nintendo's creative marketing that bridged the gap from "just interested" to sales. The hands-on experiences of thousands of consumers, along with tie-ins with brands including 7-Eleven, Pringles and Comedy Central, were complemented by a clever TV and print campaign from Leo Burnett USA, Chicago, that featured two Japanese gentlemen traveling across America in a Smart car, ringing doorbells and politely inviting us all to join them with the signature phrase, "Wii would like to play." Publicis Groupe sibling Starcom handled media buying.
If consumers somehow still didn't get it, they could go online and watch scores of globally created videos designed to show people the possibilities.
The attention to detail carried into the design of the product as well. Über-game-designer Shigeru Miyamoto (inventor of "Donkey Kong," "Super Mario Bros." and "Zelda") insisted that the machine be small, elegant and simple to appeal broadly. He reportedly sent the Wii remote back to the drawing board time and time again to make the controller as uncomplicated as possible.
"Marketing played a huge role in the success of the Wii and DS, and I think the power of having a focused message executed throughout all the elements of the marketing campaign is evident," says NPD Group analyst Anita Frazier. "It's sort of like Marketing 101, but too many marketers forget that having a solid positioning and messaging is the most important thing to do before you spend the first dollar on executing the campaign."
"We were optimistic before we showed [Wii] the first time ... [but by the reaction] we knew we had something even bigger than we had hoped for," says George Harrison, senior VP-marketing and corporate communications at Nintendo of America.
The marketing for Wii, on which planning had already begun a few months earlier, needed to play to that big impact.
"It was one of our biggest [campaigns] in terms of impact, although the actual [media] spending was about the same as the year before," Mr. Harrison says. "We didn't just double our budget to blanket both audiences [gamers and nongamers]."
Instead, Nintendo shifted its strategy to include more-aggressive public relations, more-creative media buying and, most important, more flexibility.
"In our PR, we've always done outreach, but in this case, when we noticed something interesting happening online -- like the weight loss using Wii Sports -- we would draw it to the media's attention," Mr. Harrison says. "The little things that kept showing up were picked up and blown out in marketing. ... When we saw what people were doing or how they were getting creative, we would move on it."
But why does the enthusiasm Nintendo has stirred up among a bunch of moms, cruise-ship lovers and old folks matter anyway? Because until now, no video-game marketer has been able to do it. For all the discussions and hype and strategizing, no one else has been able to expand the global $30 billion video-gaming market into a social experience that includes everyone from grandparents to babies (on YouTube there's a video of a 22-month-old playing Wii tennis).
Before Wii, Nintendo's market share was flat. Its GameCube console, while profitable, ranked a weak third to Xbox and PlayStation. In 2007, Wii and DS have been No. 1 and No. 2 in U.S. video-game-hardware sales for six of the eight months so far tracked by NPD. Estimates put Wii unit sales to date at more than 9 million globally, and DS and DS Lite at more than 40 million. Nintendo says it won't be able to meet demand for Wii this holiday season.
A 44% leap
While it's hard to say exactly how much Wii has propelled the video-game industry, at the end of the pre-Wii era, total U.S. video-game sales reached $10.5 billion in 2005, according to NPD. They rose 19% to $12.5 billion in 2006 and are on track to jump 44% to $18 billion this year.
Some data are starting to bear out the demographic shift sparked by Nintendo. Its internal research shows a 42% increase in DS purchases among women, a 127% increase among people over 30 and a 212% increase among people over 35 during an 18-month period ending in spring 2007.
DS experienced a big renewal of interest thanks to the summer 2006 launch of the smaller, brighter DS Lite. The launches of gamer titles "Pokemon Diamond" and "Pokemon Pearl" for DS were huge, while nongamer titles such as "Nintendogs" and "Brain Age" continued strong.
It's uncertain how much the competition is suffering from Wii's success. Rather than converting Xbox or PlayStation 3 fans to Nintendo, analysts believe, gamers are adding Wiis to their Microsoft and Sony setups.
There are nonbelievers who write off Nintendo's game systems, particularly the Wii, as a passing fad.
"They're doing to Sony what Sony did unto them," says Mike Goodman, an analyst at Yankee Group. "They're capturing gaming households. ... And they've done the best job in marketing that they've expanded the marketplace."
But Mr. Goodman says he sees only another year or maybe two of Wii dominance, pointing to a slowing in the Japanese market, where the Wii is outselling the competition 3-to-1 vs. 6-to-1 earlier in the year. "They're tapping out their market," he says.
And while most believe sales will continue to be strong in the near term, Nintendo in 2008 will face serious marketing challenges of its own making. Much of its seasoned marketing staff in the U.S., including its chief marketing executive, Mr. Harrison, as well as Ms. Kaplan and Mr. Matthews, will leave the company at the end of the year when Nintendo of America relocates its sales and marketing offices from Redmond, Wash., to San Francisco and New York.
"That team did much to build this success, and I'm concerned that a new marketing group might not get it," says IDC analyst Billy Pidgeon.
But the departing team has faith. "It really comes down to a very essential strategy if Nintendo is truly going to expand the marketplace with products," Mr. Matthews says. "It can't be an 'or' strategy; it has to be an 'and' strategy, and it also needs to be built on a strategy of advocacy."
In 2007, Nintendo didn't just change the video-game industry; it changed entertainment dynamics. In addition to coaxing generations of consumers to play, it inspired a new kind of entertainment interaction that's got the whole world trying to figure out how to cash in.
As we all await the next Wii-nomenon.
What's in a name? A lot when it comes to Wii
And now the back story on that crazy name.
When Nintendo announced in April 2006 that it was changing the code name of its forthcoming console from Revolution to its permanent moniker, Wii, the world said, "What?"
Nintendo executives can't be that naïve, right? They do know what people will think of, right? Wait, is it maybe just a strategy to build buzz?
No, yes and sort of.
Nintendo was not naïve. In fact, it hired a respected branding and naming giant, Interbrand, to come up with the name (along with dozens of others that were discarded).
And, yes, Nintendo executives did know the urinary connotation of the word. They were prepared for the jokes and snickers but also knew those would run their course.
And while executives insist the name wasn't meant purely to inspire buzz, the selection and announcement were indeed wellfounded in strategy. Wii the name cannot be shortened or bastardized.
Wii the name refers to the inclusiveness and we-ness of playing together. Wii the name has two i's that physically mimic two people or two remotes. And Wii the name is global -- it's pronounced the same way in most any language.
As for the announcement, it was the timing that was strategic. It came just weeks before the console's first public unveiling at E3, the most important gaming show of the year. The intent was to let the comments and snickers rise up and then die down by the time it came to checking out the hardware and software, says George Harrison, senior VPmarketing and corporate communications at Nintendo of America.
"We knew that people were going to make fun of it," says Perrin Kaplan, VP-marketing and corporate affairs. "We knew there would be a little rainstorm before the sun showed up again."
And, they ask, a year and a half later, can you imagine it being called anything else?
Well, no, actually, Wii can't.