Responding to

the Wii
GROUP E
Avijit Singh Yadav, Bishwadeep Bagchi, Himanshu
Jha, Krupa Bathia, Tanmay Srivastava
Console Core Competency Target Segment Strengths Weakness
Wii Product Innovation Non Gamers • Innovation • No Online Costs
• Ease of Use • Low Hardware Capability
• Inexpensive

Generation Year Console What went right? What went Wrong?

8 Bit 1983 NES • Few hit games per year • Negative Profit Margin
• Authentication Chip
16 Bit 1991 SNES • Maintained similar profit • Launch Delay • Backward
margin as Sega • Image Issue Incompatibility
• Future Focus • Exclusivity Clause
32 & 64 Bit 1996 N64 • High Development Requirement
• High Royalty, High Price
• Relying on Cartridge
128 Bit 2001 Game Cube Low Price compared to PS • DVD Incompatible
128 Bit 2005 Wii • Innovative, User Friendly • DVD Incompatible
Capabilities
• Motion Sensing Controller
Console Core Competency Target Segment Strengths Weakness
PlayStation Most powerful Mature • Uses Blu-Ray DVDs • Expensive
Processor Audience(>16 years • Eight core cell processor • Weak online network
old)

Generation Year Console What went right? What went Wrong?

32 & 64 Bit 1995 PlayStation • Targeted more mature audience • Too many
• Provided developers with highly advanced tools PlayStation titles
• Used CDs- Allowed it to price $10-20 cheaper
than competition
128 Bit 1998 PlayStation2 • Compatible with PlayStation • High initial cost of
• Introduced DVD playing and internet production
connectivity feature
• First mover advantage
128 Bit 2005 PlayStation3 • Powerful game processor • Delay in launch
• Use of Blu-Ray DVD format • Supply shortage
Console Core Competency Target Segment Strengths Weakness
Xbox Connected Solution Hard Core Gamers • Video Game Halo • Expensive
• Online Games • Negative Profit
• Multimedia Capabilities Margin

Generation Year Console What went right? What went Wrong?

128 Bit 2001 Xbox • Purchase of Halo No royalty Proposal
• Purchase of Game developers
128 Bit 2005 Xbox 360, • First mover advantage – launch before holiday • High Cost
Xbox Live season • Supply Shortage
• Interoperability
• Windows Media Center
• HD-DVD Compatible
• Xbox Live – Multiplayer Games
Strategy options for
Incremental
Strategy First Mover Advantage Targeting Mass Market Reduced Console improvement in Status-
quo
Description Release a console Make simpler games to Reduce cost of console Target segment remains
before the competition target non-gamers hard core gamers. Focus
is on more advanced
games and additional
features
Advantages Allows gamers to Larger customer Increased operating Regular customers with
purchase the console segment providing margins high retention rates
first and gain traction higher sales volume
for network
externalities. Blocks
sales of later consoles
Drivers Fast R&D User friendly design R&D Number of game titles
Market timing Ease of use Console Components Quality of games
Distribution Developer support Developer support Console performance
Distribution Console Usability
Recommendations
Strategy Concern
Recommended Strategy: Incremental Status Quo
First Mover • Cannot capture highest
Advantage market share in either Customer Segment • Primary: Heavy gamers
this round or next of • Secondary: Target casual gamers in the
consoles short run
• Profits highly
dependent on
competitor timings Product Road Map • Introduce features and components
comparable to nintendo like motion
Targeting • Difficult to have sensing controller
Mass Market sustained sales from • Plan for collaboration via online gaming
casual gamers • Continue partnering with high quality
• Will lose the heavy developers to develop advanced games
gamers in the process
Reduced • Push away quality
Console conscious customers
• Might have reduced
features
Price • Target price reduction to capture the
heavy gamers who cannot afford the
console
Thanks.