Business lessons from the Nintendo Wii

Wii

The new Nintendo Wii game console that just came out breaks the mold. Where the competing Microsoft Xbox 360 and Sony Playstation 3 machines are just more of the same (only faster and with better graphics) the Wii has broken new ground both with the product itself but also in the development process and in their marketing.

Nintendo are on to something here and the buzz right now seems to favor them over the competition, which of course begs the questions “How did they do it?” and “What can other businesses learn and steal borrow from them?”

Read on to see my favorite business lessons from the Nintendo Wii.

1: It’s not the specs, it’s how the customer feels

Too many companies compete and innovate almost only on product features and specifications. Make that car a little bigger, the PC a little faster, the mp3 player memory a little larger.

This article in Seed Magazine argues that the real innovation in the Wii is how it makes the players feel while they play, and that the user’s emotions are not necessarily affected by improved specs.

The Wii game controller can sense movement, so that a baseball game is played by swinging the controller like a bat and a boxing game is played by actual punching and ducking. From the article:

This is the Wii’s real innovation. While Nintendo argues that the wireless controller makes game play more intuitive—you no longer have to remember arcane sequences of buttons—it actually does something much more powerful: By involving your body in the on-screen action, the Wii makes video games more emotional.

In a further innovation, many Wii games will allow you to put your own face on the game character you control, in an effort to get you even more involved emotionally.

Genyo Takeda of Nintendo says this:

This may sound paradoxical, but if we had followed the existing Roadmaps we would have aimed to make it “faster and flashier.? In other words, we would have tried to improve the speed at which it displays stunning graphics. But we could not help but ask ourselves, “How big an impact would that direction really have on our customers??

This rocks. The best games are not necessarily the ones with the best graphics, but the ones that get you involved emotionally. That you can even do this completely without graphics or sound, is evidenced by this story.

2: Highlight your customers, not your product

Taking a further step in this direction, the Wii website has a videogallery that features the players, not the games. You get to see them duck, swerve, puch, swing, smile and grimace – you don’t see the game itself. In other words, you see what the game makes them feel – which is really what matters.

3: Don’t blindly give customers what they ask for

The pressure was on Nintendo to come out with a console that was more powerful than the competing ones. They chose to buck this trend. Takeda says:

There is no end to the desire of those who just want more. Give them one, they ask for two. Give them two, and next time they will ask for five instead of three. Then they want ten, thirty, a hundred, their desire growing exponentially. Giving in to this will lead us nowhere in the end. I started to feel unsure about following that path about a year into development.

Making the Wii less about great graphics means they could focus on making it small, quiet and energy efficient. Mike Wagner talks about the same thing in this great blogpost – that sometimes you need to dig into what the customers say they want, to find out what will actually make them happy with the product.

4: Be open

On the Wii website, Nintento president Satoru Iwata interviews some of the people who were involved in developing the Wii in a feature called Iwata Asks. This is both a great way for Nintendo to learn from their own development process, and also a great way to showcase and appreciate the people behind the product. These people often get little credt, at least publicly and now they’re featured in a very prominent way.

They can even be honest about the tricky parts in the interviews. Kou Shiota says this about the decision not to compete with xBox and PS3 on raw power:

To be honest, I even felt quite anxious about it. After all, it takes a lot of courage to divert from the Roadmaps. I was especially concerned when it was still not very clear to me what could be done with such a machine.

5: Involve many people in innovation

The Iwata Asks features clearly show that Nintendo is great at involving many people in generating and developing ideas. Here are som various quotes:

“Wii’s one-handed controller is not the great idea of a single person, but a fantastic fusion of ideas from all kinds of people.”

“I first asked a lot of employees for their opinions regarding the hardware.”

“We had to rely on the know-how of Nintendo’s handheld gaming device team.”

“A number of years ago I created somewhere between ten and twenty teams, each consisting of around three people. These teams were given free rein to couple a dedicated controller or peripheral with a GameCube title, and then see whether or not the end result was marketable. This project gave rise not only to the “Donkey Konga” Bongos and the “Dancing Stage Mario Mix” Action Pad, but to a number of ideas and designs that would find their way into the Wii Remote.”

This is excellent. Some companies take the approach that innovation is the responsibility of the R&D guys and everybody else should just do their jobs. Nintendo obviously tries to involve as many people as possible in the creative process.

The upshot

Nintendo obviously need to be technologically innovative, but with the Wii they’ve moved the innovation to other areas.

Rather than competing in one area only (raw power), they’ve moved their efforts to where it really matters: User experience. Predictably some people love this while others hate it – which, according to Kathy Sierra, is exactly where you want to be.

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25 thoughts on “Business lessons from the Nintendo Wii”

  1. Wii could be great. Wii could be the best thing since sliced bread. Wii could very well win this generation, but you know what? It hasn’t done any of that yet so I think it would be wise to keep your enthusiasm in check.

    I spent months arguing with Nintendo fans who believed that just because a game was made for the Wii it would automatically be better than everything else. Forgive me but lol. Rayman Raving Rabbits and Wii Sports (which are glorified mini-games) are good and all but there are much much better games on other platforms right now. Even the FPS which are supposedly made for the Wii fail when compared to shooters on other platforms. This is nothing unusual. Launch games for the most part are generally uninspiring, so this isn’t a problem with the Wii itself. But it does show that perhaps the Wii isn’t all it is hyped up to be. I mean, an average game is still and average game wherever you put it.

    What bothers me most about how you mainstream guys are reacting to this.
    You have one genuine superstar game on the system and it hardly gets a mention. Yes, Twilight Princess is a contender for Game of the Year and you guys are raving about Excite Truck…

    Wha?

    Moving on. Emotion.

    Again, wha? Nintendo’s game do inspire emotions but not the kind of emotions inspired by a game like Planetfall (except for maybe the Zelda games). They simply do not and don’t think the Wii is going to change that because all Nintendo has been talking about for the past 3 years is simplifying gaming. The kind of emotions inspired by Planetfall come from good videogame storytelling which is definately NOT Nintendo strong suite. I am sure some developers out there are going to use the Wii controller to enhance this side of gaming greatly and that gives me hope, but so far I have of heard of maybe 3 that that doing such. For the most part it has been “Oh look we can make the Wii controller move like a sword/club/bat… AMAZING!!!” -_-‘ Honestly, if you are really interested in games with strong storytelling and not just using them as a bullet point for your argument I would point you to upcoming games like Mass Effect, Alan Wake and Bioshock or currently released games on last gen platforms like FFXII, Okami, Star Wars: Knights of the Old Republic, Eternal Darkness etc.

    As for traditional gaming, say what you will but for the past decade I have been having a great time so this ‘new’ fun Nintendo is supposedly bringing must be exclusive to people who rarely play games. Also, you say that thier competitors are bringing nothing to the table except more power but that is not true. As far as online is concerned MS is peerless and when they unveil Live Anywhere, which should be a big step for cross platform gaming, that gap should extend even further. Also concerning games that seek to push artistic side of gaming you will find a far greater number than on any other consoles. Even Sony… well you might be right about Sony, however, if developers like Kojima, Jaffe and Ueda have anything to say about it the console will likely have it share of exceedingly creative games (inspite of Sony’s numerous bungles).

    Now, I am sure it sounds like I am bashing the Wii. I’m not. In fact, I like it a hell of a lot more than Sony’s bloated, marketing-driven mish-mash. However, I don’t believe in Nintendo’s vision for it. I appreciate the idea of bringing new people into gaming but if that means more these throw away party games then I pass. You were talking about how great Nintendo’s adverts were because they were focusing on the players and not the product. Wrong. They have been focused on the controller. Sure it shows people jumping around and having fun… with the controller. There is nothing inherently wrong with this but listening to people it seems they are more excited about the controller than about the games themselves. As a gamer, I can’t tell you how depressing and dissapointing that is. That should NEVER be the case, no matter how special a controller is.

  2. Hey lumziv, looks like you are the passionate hater. You should start a blog about how much you hate nintendo.

  3. First, I enjoyed reading the article A LOT.

    Feedback / Commentary:
    “Where the competing Microsoft Xbox 360 and Sony Playstation 3 machines are just more of the same (only faster and with better graphics) the Wii has broken new ground both with the product itself”

    Sorry but in the last days I more often have to ask myself what did Nintendo do that is so innovative? The sentence above could be rewritten like this:

    “Where Nintendo presents nothing new in the audio/visual department the deliver just more of the same (just with a new controller) …”

    I only see Wii Sports which by itself is nothing innovative from a certain perspective because you have all the games done in video games 1000 times over (Tennis, Golf, Baseball…)

    I’m still waiting for the “real deal” that shows me that Nintendo can break news grounds – I’m thinking about Brain Train or Nintendogs non-games and the such…

    Personally I’d say that Guitar Hero on PS2 is more innovative than Wii Sports – in my opinion!

    “Wii website has a videogallery that features the players, not the games.”

    *cough*

    Wii website has a videogallery that features *beautiful models*, not the games.”

    Topic 3: I AGREE 100% but the same did Microsoft with Xbox 360.

    Topic 4: I enjoyed these questions – my poor printer ;)

    Overall great article that I will have to revisit often – yet sometimes I have to strongly disagree.

  4. Mike Nikols,

    Of course, someone has issues with Nintendo and all of a sudden he must hate them. Nevermind producing a convincing counter argument. No, the best you can do is claim that I hate them. Honestly, I am about ready to burst into tears. Someone hold me. Some guy named Mike Nikols on the internet thinks I hate Nintendo. Good-bye cruel world etc. etc.

    Seriously, I don’t even know what say. Actually I do. And I will say something that I am sure even your fanboy mind can comprehend. If a game like FREAKING AMAZING LEGEND OF ZELDA can get ignored in favor of stuff like Wii sports, then something is simply not right. Call me a hater or whatever you like, but if you consider yourself to be any kind of gamer then we will atleast agree on that point… unless you are not a gamer, which would make you the sort of person I am talking about.

    Anyway, whatever. Now, I will go to my little corner now to write emo poetry about how Mike Nikols thinks I’m a ‘hater.’

    Internet, indeed.

  5. I am still very excited about Wii. I have owned it since the launch day, and I have been playing it non-stop. Ironically, the game I play the most is Zelda. I don’t play Wii sports alone at all – I have tried it, it’s fun, but this is not my type of game. But when a bunch of friends come over, without thinking, it’s Wii Sports time. It’s a blast.

    I guess people who are not impressed with Wii’s hardware and controllers are traditional gamers who like big traditional games. Traditional games, to me, include Halo, Metal Gear Solid, Zelda, Gears of War, whether they support online multi-player or not. Yes, they are now “traditional games”. Those games need great graphics, many buttons and some sitting down play time.

    To the average non-gamers, Wii is very innovative and very impressive. I was at a friend’s place and we were playing Wii Tennis. I handed over a controller to play and she asked, “ok, what do I do now?” I said, “Just swing”. She did and said, “WOW!” Nintendo can’t please everyone and they know it. But able to impress a majority of non-gamers and casual gamers is not an easy task. I think they are doing it very well with Wii.

  6. lumzi, do you own the Wii? I am going to take it that your write up means no, and as far as I am concerned, unless you own one, you aren’t entitled to an opinion on it that is as scathing as your own. The Wii is a wonderful play experience, and that is all it ever had to be. We Nintendo buyers were never lied to, and we never got the feeling from Nintendo that we were buying something that we weren’t. At least it doesn’t have to pad its 22GB disk for Resistance (a game that the Bluray storage was touted as having to be a requirement with the development due to excessively large HD textures) with over 18GB of the same files to make it appear as if the “HD Era” was really a requirement in gaming as some big name console makers do. I mean the game didn’t even run in 1080P. Who did they think they were fooling? I think that is ’nuff said.

  7. So much to address when it comes to the Wii for there are those who speak against it and those who are huge fans…all very vocal and all previously video game fans. To all those who are saying the Wii is not yet a success I want to tell two stories. I should note as an aside that I am one of the crazies who camped out for the Wii on release night, but I had some severe reservations about it. Ok on to the stories:
    1) Black Friday: On Black Friday I was going out to look for a Wii for my brother. He couldn’t stay out all night (and it would have been a waste of time him living in L.A.) so he was asking for one from our family for Christmas (and me being the gaming nut I was designated the person best able to find one). Anyway there were rumors that a new shipment was going to arrive at Gamestop on Black Friday, so I went to every store I could find and asked about their stock. At one store I asked if they had any Wiis and was told “No, but we have PS3s.” This itself is hugely surprizing since this occured at about 1pm on a day where people have been up and shopping since 6am. I told him no and heard someone behind the counter say “See, noone wants these things.” If that is not a mark of a failure, where Sony can’t even sell out when they have a huge lack of supply, I don’t know what is. As I was leaving I heard another version of this play out where the mother of a video game fan came asking for a Wii, got the same response, but she asked how much the PS3 was ($500), to which the mother said “No thank you” and walked off.

    These show exactly what Nintendo was talking about when they talked about video games not being a mass media. Nintendo of America’s President said during E3 “Have you ever met someone who has never read a book. How about someone who has never seen a movie or watched tv? Now, have you ever met someone who has never played a video game?” Which leads into my second story:

    2) Thanksgiving Day: My parents came over to my house for Thanksgiving this year and I was excited to see how they reacted to the Wii. Prior I had some friends of mine test it out who don’t like playing video games but like watching others play. They LOVED it, so much so that one of them is going to purchase just a controller so she can play at my house (not a system, a controller). But I wanted to see if that was just a youth thing and if maybe the older generation was not as flexable as mine. My dad (a minor video game fan but a horrible player) was excited to try it out and my mom had no desire either way. We just played the packaged game (Wii Sports) and within 2 hours my dad was beating BOTH me and my wife in tennis (he had managed to perfect the super serve which I still have trouble doing). Now this was a huge blow to my ego. I have spent my entire 25 years playing video games and taking it easy on my dad whenever we played, but try as I may I could not beat him. My mom was not as good but she still had lots of fun, so much so that when we had finished eating Thanksgiving dinner SHE of all people said she wanted to play. This comes from the woman who I have tried to get to play simple games all my life (like Tetris) and she would previously get too nervous after the first few levels. Now she was challenging me to tennis. The other big twist was when she lost, she didn’t just give up, she wanted a rematch (when she would loose the first time in Tetris she would quit).

    Ok my comment is now too long and too far down to read, but hopefully this will show some evidence to those interested that while many video game fans still cry foul when the Wii is mentioned, EVERY person I have showed the system to has fallen in love. (As a side note, the Zelda game for the Wii is by far the most innovative game made to date. People say it is just a rehash and the same “style” of game as done before, but never before have you been able to joust, save a run away carraige, or many other things with the ease and flexability as you can in this game. While the topics of the games may have been done before, its always been clumsy or non engaging. Today I feel like I was really in the game and I did not need instructions on how to do weird flips or special buttons to do somethign specific to the battle…I just did what I would do in real life, and it worked)

  8. @ Jim
    Have you SEEN the video gallery? I hardly classify a severly obease black woman as a “beautiful model”. In fact my favorite video there is this one of a father (who is clearly a beer swilling sports fan) and his kid (who has clearly played video games since birth). The son is confused when pressing the button doesn’t do anything, but the father revels in his ability to play the game and beat his son.

  9. Wiinar,

    Obviously you are mistaking me for some kind of Sony fan which is certainly not the case. As for the part that is relevant to me, I don’t believe I ever stated anything about Nintendo lying or saying the Wii was something it wasn’t. My issue is what they HAVE said it is. Also, I have concerns with the reactions to the Wii games themselves. Say what you like but by any standard Twilight Princess is vastly superior game to the likes of Excite Truck.

  10. I am not arguing the quality of either game. I have had decent to extensive play sessions with both, and both equate to the only thing they need to equate to, fun. If you want something more than fun out of your gaming console, then maybe you didn’t want a gaming console in the first place. The Wii is a SDTV console with proprietary hardware designed for gaming. It wasn’t built for power, it was built for play. And it was never marketed any other way. If that bothers you, no worries. Just don’t buy it.

    Or either that you always just get one, play it to death, and then come back and let us know what you think then. At least then you have experience to speak from. What you need to stop doing is speaking about something as if you know something personally about it, and in all actuality you don’t even own it, and thus don’t have any real clue what you are talking about.

  11. @Nik

    It is strange to say, but I really literally had almost the exact same experience as you, but it was with bowling. My parents were enamored with it after the first round. To top it off, my roughly 70 year old grandmother almost tried it out as well, but only didn’t because my grandpa got sick and had to leave. Now that is saying something to me.

  12. Thanks for all the comments people. Not many of my blogposts have aroused this level of passion in the resonses. Reminds me a little of me and my friends warring over whether the Amiga or the Atari ST was the best machine waaaaay back.

    I guess there’s only one way for me to settle the issues: I’ll have to get one myself.

    Unfortunately, it’s not coming out in Denmark for a long while yet :o)

  13. I agree so much with this article. I own a Nintendo Wii, and I have to admit I have never had as much fun with a video game than with this system. It’s a great party system and Nintendo was smart in appealing to non-gamers. For me, I play video games for fun, and I prefer to play them with friends (I’m a real party person) and getting interactive on this system with friends just brings a positive atmosphere into the room.
    Even though the Wii lacks great graphics, honestly I could care less. As long as I’m having a great time, just chillaxing with my friends and playing some Wii Tennis, that’s all I really need. It’s fun. I do enjoy games with high graphics as well, though I prefer having a social fun time than a secluded fun time.
    The Nintendo Wii isn’t for everyone, though it is for me.

  14. The people who are going on and on about how Wii controller isn’t innovative are just cracking me up. I bought a Wii last week, and something astonishing has happened: It’s turned into a virus. People who never even considered video games have bought one (or are currently trying to buy one, but they are sold out everywhere). I took it with me to work, and the whole company (12 people) preetty much wasted an afternoon playing Tennis. All ages, all genders. I’ve gamed against my dad (and lost a few games), something that has never happened before. Friends of mine even played against their grandparents, and from the looks of it, had tons of fun. Nothing like this has ever happened before, simple as that.

    The Wii is the most innovative console since the Atari 2600, it’s the only console everyone can – and wants to – play regardless of gender or age, and it’s the most fun console I’ve ever had the fortune to play (and I own dozens and dozens of consoles).

    Do yourself a favour and get one if you can.

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  16. The biggest problem I have with Nintendo, is that they aren’t making it readily available. Believe it or not it has other uses than entertainment. WiiFit proves that this has many other marketable areas, not to mention that some children have motor skill disorders that specialists are recommending the Wii for.

    I’ve been trying to get one for 6 months for my son for that very reason.

    They made a great product, but who cares? You’ll spend twice the value of the Wii driving around to find one. The online scams inflate the price to well beyond MSRP by selling you “bundles” with games that couldn’t otherwise make any money on their own. There are websites like Wii Finder that will tell you you can make your money back, which is complete bullcrap. They are still stuck with the games in the bundle they bought over 7 months ago after wasting a lot of time and money trying to sell them on ebay. Hell, even the local Blockbuster wouldn’t take them ( they already had dozens of copies from other people trying to do the same.)

    Sure the PS3 and XBOX 360 are junk in comparison, but they are available. The most popular games out there right now are available on all three consoles, and I’ve seen a LOT of business flowing towards Sony because people simply can’t get the Wii. This morning I showed up at a Best Buy ( for about the tenth time) only to find there was no shipment. I’ve shown up as early as an hour before they open for four straight weeks, and the one time they managed to get a shipment, I was the 15th person too late. ( An hour in advance!).

    Caring about the customers? What a crock of horse putty. The customers are spending exorbitant amounts of money buying extra games, wasting gas, eating at McDonalds and Burger King while they wait in their cars, etc.
    The poor sales reps for the game companies are having to answer constant phone calls, and get lip from angry people after successive weekends of disappointment. People are taking off work to get these things, because most of the shipments are mid week. I’ve been looking for SIX months, and in that time only ONE shipment arrived in a 40 mile radius of where I live on a weekend. The rest were all weekdays, and they were always sold out before the end of the day.

    You are right about the age range. People of all ages share the disappointment. Little kids walk out of these stores in tears because Nintendo either can’t manage their manufacturing schedule properly, or potentially because this was all intentional.

    Think about it, any one with half a brain can predict the outcome of a product shortage. Their little fiasco sends people to a specific set of stores. They are guaranteed to use gas. I wouldn’t be surprised if Nintendo realized what they had done, deliberately stopped making as many as they should, and started investing in oil and electronics stores. Hell, if they invest in the stores that sell their gear, then they still make money even if people do buy the competition.

    It’s one hell of a marketting scam, and anyone who wants one has to live with it.

  17. Ed, Nintendo has increased production regularly since they started selling the Wii. It’s obviously nowhere near where it should be, but Nintendo has always been conservative with buying production capacity for its consoles. It’s not a scam, it’s just the behaviour of a company whose operation has never lost money in its whole history. Nintendo produces more consoles than Sony and Microsoft combined; the reason you can buy PS3s and 360s is not because these companies produce more, but because demand is lower.

    As for most popular games being available on all consoles, this is obviously false. You need at least two consoles to get most popular games.

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