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One of the hottest products this Xmas is the Nintendo Wii. But why? It was only 24 months ago that CE had written Nintendo off as a has been player in the games market.

Unless you’ve been living in a cave for the past year or so, chances are you’ve heard about this thing called the Nintendo Wii.

It’s the video game console making headlines around the world because retailers can’t keep it in stock this holiday season. It is being used as a physical therapy tool at retirement homes, has become a Sunday night family pastime and has converted thousands of non-gamers into video game buyers.

But the Wii is also the centrepiece of one of the biggest corporate comebacks in history. Just five years ago, analysts were writing off Nintendo Co. Ltd. The company, which made video games a staple of living rooms everywhere, faced increasing console competition from tech heavyweights Sony Corp. and Microsoft Corp. Suddenly, Nintendo had to reinvent video gaming to save itself.

So Nintendo cast its gaze inward in an effort to bring back its glory days of the late 1980s and early 1990s. It wasn’t long before the Japan-based company had the solution. Twelve months later, the Wii has sold more than 5.5 million units in North America, and Nintendo is back on top.

 

But according to Nintendo of America president Reginald (Reggie) Fils-Aime, the story of the Wii doesn’t begin with the console’s launch last November or even the lacklustre sales of the Nintendo GameCube in the early part of this decade.

To tell the story of the Wii, you need to go back to 1997, when Nintendo was still selling the N64 console, Will Smith was still Gettin’ Jiggy Wit It and Titanic was king of the box office.

THE THREAT “When Nintendo was at its height of success we had the Nintendo Entertainment System and the Super Nintendo products that appealed to all types of consumers from [age] 5 to 50, all playing games that they enjoyed and found the controllers easy to manipulate and the experience quite rewarding,” Mr. Fils-Aime said.

Everything changed in the summer of 1997 with the release of the James Bond-themed game GoldenEye 007. The first-person shooter game required players to use “fast-twitch” or lightning-quick reflexes to succeed and went on to become one of the most popular and best-selling games to that point.

“That product begat other, more intense fast-twitch oriented games …which resulted in the gaming industry becoming more insular, more focused on complex controllers, and more focused on games that if you weren’t very knowledgeable, you were really left out,” he said.

Sony and Microsoft seized on the trend and designed their new PlayStation 3 and Xbox 360 consoles to maximize the dedicated gamer’s experience with flashier graphics and controllers with more buttons for increased precision. As a result, casual gamers began to drift away as the Internet became more popular.

THE FORMULA FOR CHANGE Nintendo had two options: Try and keep pace with Sony and Microsoft by tweaking the existing gaming experience, or embark on a radical departure and offer consumers a new way to play.

The company opted for the latter, and the first manifestation of this approach was the handheld Nintendo DS, the new version of the company’s ubiquitous Game Boy device.

 

“To talk about the Wii out of the context of the DS is to only get half of the story,” Mr. Fils-Aime said. “The Wii and the DS are the real brought-to-market executions of our strategy to make gaming more immersive, more involving and more accessible for all types of consumers. By doing that we’ve tapped into players who never saw themselves as gamers before.”

The Game Boy dominated the handheld market for years before Sony announced it was developing a new portable game system, the PlayStation Portable (PSP), which was designed to replicate the home gaming feeling in your hand.

But instead of creating prettier visuals, Nintendo developed a system that features two screens, one which was touch sensitive, a microphone to process voice commands and wireless capability allowing users to race their friends in Mario Kart over wireless and cellphone networks.

“Our success with Nintendo DS told us we were on to the right strategy,” he said. “That a simplified input that would allow all types of consumers to get into the gaming would be our best path to the future. That thinking is what led to the Wii remote.”

The Wii remote, or “Wiimote” as it is sometimes called, is a one-handed, motion-sensitive controller that allows the user to manipulate games through physical movements rather than by pushing buttons. Players can swing the remote like a bat while playing a baseball game, or simulate a rolling motion to play a bowling game. “We had to make the games more immersive, not from a visual standpoint, but from a game-play standpoint,” he said. “We felt that was a better strategy than investing in faster processors and graphics chips where all it does is take the current experience and make it prettier.”

 

MORE THAN ANYONE EXPECTED To say the Wii was a long shot would be an understatement. Experts didn’t give it a chance against either the PS3 or Xbox 360, which both featured high-definition graphics and faster processors. It wouldn’t get more than 20 per cent of the market share, they said.

The experts were wrong. To date, the Wii has sold more than double the PS3, and is only two million units behind the Xbox 360 despite the latter’s year-long head start, according to data from the NPD Group.

INSATIABLE DEMAND Demand for the Wii has completely overwhelmed Nintendo. The company has increased production rates three times, and still the Wii sells out as soon as it hits store shelves. Nintendo is cranking out 1.8 million units per month and expects to sell 17.5 million units worldwide in fiscal 2008, almost as many as the Nintendo GameCube sold during its time on the market.

“These are rates and ramp-ups that this industry has never seen before,” he said. “Our biggest challenge in the coming year is truly understanding the consumer demand for both Wii and DS and being able to satisfy that demand …We have to find ways to understand it and manufacture to it. Otherwise all we’re doing is disappointing consumers.”

Copyright: Globe & Mail Canadea

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