As mid-November approaches, one can feel the propulsive rumbling of new systems as though they were a stampede of terrified bison ready to buffalo-jump onto unsuspecting consumer's heads. The date's not here yet, but it isn't hard to play armchair quarterback at this point.
Let's get one thing straight; the strategies of the next two systems are inherently as different as the corporate cultures the two organizations represent. Nintendo, for all its lack of technological mucle, understands gaming culture (which isn't hard when you're in the business as long as they are) and better yet, understands non-gaming culture.
Sony, who's background is made on solid products with high quality standards understands how to make hardware that sounds a new boundary in capabilities and consumer expectations.
Both companies have strengths and weaknesses; however, I feel Nintendo's in a better position to be successful in the next round of gaming hardware.
Why? It would seem obvious that the strongest system should win out the day, but I think the next generation of systems are coming into a different culture than their forebearers. The market is no longer in "growth" mode. Video games are now a major market, surpassing that of movies - more importantly, the gaming market is entering the "mature" stage. Nintendo understands this, Sony does not.
Nintendo, in the last few years especially, has understood that market share is not the final determinant in profitability. Rather, Nintendo has agressively filled a niche of innovation, with games that are inexpensive to produce, but sell exponentially due to the inherent "newness" to the gaming. The first experiment, the much-maligned-by-me-and-then-completely-retracted, Nintendo DS proved that a system did not have to be a juggernaut to gain wide appeal. The DS games pale in comparison to the PSP, but the gaming offered by the DS far surpasses what the PSP is capable, regardless of the amount of money and firepower Sony through into its little system. The stats are the stone cold truth; the DS has outsold the PSP considerably and there is a lesson shining like a bright beacon to both companies.
The DS showed Nintendo that the key to the mature gaming market is not making bigger, more expensive systems and games. Instead, the key is finding new gamers - essentially appealing to the wider audience of people who don't play games.
Looking at Nintendo's recent Wii promotions, the company is only going further down the path it set with the DS. The promotional videos Nintendo has recently released show regular people playing the Wii. The concept is genius. There's nothing that makes me more excited to play a system than watching a regular person have a riot playing it; I'm sure this applies moreso to regular people who watch the videos. Further, the system and game design itself is basically targeted to people who don't like the complexity of current games. There's little adaptation to the Wii, like the DS, it's relatively a pick-up-and-play kind of system.
Sony on the other hand, hasn't learned its PSP lesson and it about to try the same trick with the PS3. The company assumes that the market can be wowed with powerful hardware; as I've argued in the past, they're going to be wrong, again.
The problem with Sony's approach is that they are trying to appeal to existing gamers, an already if not diminishing market. This market segment is probably the most difficult to get full engagement and the most costly since they already are the target of most competitor's advertising and marketing. True gamers are not necessarily brand-loyal, rather they are game loyal. The demographics show that most people who align themselves as gamers, play games on a number of systems - it's the games that they are loyal toward.
The PSP, while awesome in capability, is failing because the games can't cut it; additionally, price played a major role in gamer turn-off for the system. It only gets worse with the PS3. Quite a few gamers were "stung" with the PSP and will be more skeptical of Sony's next offering. It certaintly doesn't help that Sony doesn't seem to have an over-arching strategy to its next system; it's not innovative like Nintendo and it's not properly online like Microsoft. As I've said before, in a mature market, simply having good hardware, isn't going to be enough.
Add to the fact that Sony's online capability seems to switch everyday and it doesn't exactly elicit consumer confidence; what little communication from the company has been contradictory. As a communications person, I am amazed at the amount of dis-coordination from Sony's North-American marketing group.
Ironically, the best communications about the PS3 have come from Sony Europe, who's campaigns have been in full effect for some time; in fact, most news about the PS3 has been coming from the European division. That's especially funny since Sony just annouced that Europe won't even be on the list for when the first systems ship. So the gamers with the most knowledge of the system will have to wait until March, while the gamers who have no idea what the system can do will get it November. Good strategy.
The marketing campaigns, and I guess the systems they advertise, are emblematic of the position of the two companies. Nintendo understands the competitiveness of the market and need to grow it to be successful. Sony, on the other hand, assumes the old strategy; that firepower will win just like it did with PS2. While ultimately, I think Sony will do well (it has too much financial backing not to), I think the company is in for a rude awakening come November. As for Nintendo, congratulations on running a good marketing campaign that reflects your product's vision. As a consumer, I get it, and I want to get it.
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