How do you win in the PC/CE industry?

Every engineer…every marketing “expert” knows the answer.

You give ‘em more.

More features. More fun. More quality. More bells. More whistles.

Qsonix Music Management System

You give ‘em less.

Lower cost.

That’s the way the gaming industry does it and conventional wisdom (don’t you love that word?) “proves” it works.

After all, “everyone” knows gamers are 14-24 year old guys who:

– love the smell of napalm in the morning and squealing tires
– want their women overly endowed and ready for action
– like their mechanical and alien competitors big, ugly and without conscience
– can sit in their dank rooms 4-8 hours straight without bathing or relieving themselves

If any of the other 6+ billion people on the planet buy into the gaming buzz fine.

Figure 1 – Global Population – Today there are over 6.6 billion people on the planet. All are potential customers for …something. All those of us in the industry need to do is figure out what it is…boy that was simple!
Source – U.S. Census Bureau

They don’t really count though.

You may think of this stuff as simply…games.

To the hardware/software folks involved…it’s serious stuff!

Right now the market is on track to become a $50+ billion global business.

Figure 2 – No Game – Those of us who play them just think of gaming systems as idle time games. But to the hardware, software and subscription service people who make their living in this space it is serious business.
Source – Informa Telecoms & Media

Even by MS standards that’s not chump change!

Ok so it’s big…huge even.

So how would you have like to have been the guys who bounded into Iwata-san’s (now president) and Yamauchi-san’s (founder and CEO until 2002) offices and said you wanted to develop game systems that wouldn’t compete with Sony’s PS or Microsoft’s Xbox?

They want to develop this people-oriented system that anyone could buy and play.

They wanted it kid and adult friendly.

They wanted to call it something that was part of the family.

How about…Wii?

Bad idea?

While MS and Sony were pushing the fast track, Nintendo took the road less traveled.

Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Words flowed in adrenalin fashion over the systems and the games.

Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job.

But something went awry in the brilliant MS/Sony planning and reviewer accolades.

As Walter/Dennehy said… “Every 10 or 11,000 years I make a horrible mistake.”

Time to step back and look how and why Nintendo tapped a market that logic (don’t you love that word?) says wasn’t there.

It’s a shift in the post-modern world that can help the entire PC/CE.

The signs were there…we just didn’t pay any attention.

The Internet and gaming isn’t a 20+ stud domain!

Truth is:

– 18-49 gamers are only 44% of the market. 56% is “other” (see Figure 3)
– nearly 52% of the internet users are female (see Figure 4)
– 54% of the online game players are female
– 66% of females watch videos online
– 75%+ of the online gamers are women
– Women are different from men (surprise!)
– Older & younger players like to interact with others

Figure 3 – Not All 20-Something – Turns out that not everyone who is a potential game system/software customer is 18-24 and male. They are younger and older and also…female.
Source – Ipsos Insights

Figure 4 – Female Domination – While men tend to think that men dominate the Internet – and by that definition also gaming – but it turns out women are on the iNet in greater numbers…over 51% are female.
Source – eMarketer

Faith Popcorn, president of BrainReserve, identified two concepts – clicking (pinpointing lifestyle trends) and cocooning (retreating into the home and doing things as a family) years ago.

She identified females and families as a dominant force – for long term sales – in the market.

Sometimes referred to as the Nostradamus of marketing, her work and predictions rang true for Nintendo and software/online subscription services have gotten the message.

Maybe the rest of the industry will follow suit!

The world’s demographics are in an important transition:

– Nearly 1/5th of Japanese and Italians are 65+…and its increasing. The US with 12% age 65 or older ranks 15th in this category
– Aging is proceeding rapidly. Japan doubled its percentage in 26 years and the acceleration is even grater in Brazil, Singapore and Thailand
– 60% of the women 75+ are widows in Australia, Malaysia, Croatia
– Older Canadian women living alone increased 8x between 1961 – 2001
– By 2050 nearly 1.5 billion will be 65+ and an almost equal number will be 0-14

The big guns in gaming – Microsoft, Sony, and Nintendo – are following different paths.

Come on face it.

Gaming is a sideline to MS and Sony. Their agendas aren’t really to give you heart pounding, sweaty palm game action!

They want their systems as your home entertainment hubs. If you happen to play a game now and then…great.

But they are adding the features, capabilities and connections you need around the house. Complex stuff they “know” you need.

You know:

– Connection to your TV
– Internet surfing
– Connection to your stereo
– Connection to your refrigerator, stove
– PC “things” (remember MS wants to rule your world!)


They want you to have fun!

They’ve got stuff that:

– is multiplayer, community focused
– is of interest to the casual gamer (the majority of us)
– gets you off your fat *** and lets you participate with more than your fingers
– makes it fun on a casual, communal, friendly level

So what has that got to do with the rest of the industry?

Glad you asked!

In our converged/converging world people want personal communications. Personal solutions. Personal devices.

While manufacturers keep adding value…adding capabilities…adding features…adding complexity…adding cost.

It’s an unsavory set of design compromises.

They’re compromises that techies love.

For example the PSP is a pretty good game system.

It’s good for watching movies (lot better screen size than your iddy bitty iPod screen !

It can store/play your music.

Nintendo’s DS?

Plays games.

Of course people are hacking it to do all sorts of things beyond that but hey…that’s what hackers do!!!

It’s a product that is outstripping the PSP sales !

It’s a product that could have legs even into 2011 in the U.S. when there will be 59 million kids (0-14) and boomers + of over 90 million.

Figure 6 – Tapping The Market – Whether they knew it or it was just dumb luck, Nintendo built systems – Wii and DS – for the marketplace. The older and younger population as well as females and family folks have flocked to the systems and software. So much so that other software developers are suddenly warming up to Nintendo. What can you learn from this shift?
Source – U.S. Census Bureau

The rest of the population? Well as Walter/Dennehy said… “I promise you, you will all lead productive lives.”

Seems to us that Iwata-san was a brain surgeon and Yamauachi-san was a rocket scientist.

The guys who suggested the Wii and DS were more than just snake oil sales people.

The Nintendo approach so far has shown that the Swiss-army PC/CE solution may get a techie’s pulse racing but doesn’t get everyone into the pool.

Consumers – around the globe – want personal products and solutions that they can easily optimize for specific applications, specific activities.

Certainly we could be wrong.

Or as Ben Luckett said in Cocoon, “Well there is the one school of thought that says they don’t know nothing.”

It’s time that PC/CE companies takes a closer look at the Nintendo phenomenon and implements those lessons that apply for their firm.

After all the lowest common denominator must know something.

There are so many of them and…their numbers are increasing !!