Nintendo's branding success

The Nintendo Wii is a popular topic in my marketing classes. Nintendo looked at the videogame console industry, saw its competitors Sony and Microsoft battling over performance and graphics, and rather than joining the fray sought to take a different path altogether. They subsequently targeted non-consumption: casual gamers, older individuals and families while Sony and Microsoft continued to cater to the  “hardcore gamers”. Nintendo’s new-market disruption is clearly seen in the numbers of US hardware units sold in March: (Source: NPD)

DS – 1,040,000 (Note “DS” is Nintendo’s handheld device)
Wii – 340,000
Xbox 360 – 175,000
PS2 – 172,000
PS3 – 127,000
PSP – 116,000

But is disruption all that is at work in these numbers? I’ve been reading Al and Laura Ries’ 22 Immutable Laws of Branding, and they mention the concept of over-extending a brand. That is, proceeding to use line extension as a means of growing their company and brand. The Ries argue that expansion is actually hurtful for the brand in the long run, and the strong brand is the one that narrows it focus. Looking back over Nintendo’s history, their consoles have had the following names (in chronological order)

NES, SNES, 64, Gamecube, Wii.

Looking at competitors, we have Sony with: Playstation 1, Playstation 2, Playstation 3; and Microsoft with Xbox and Xbox 360

Whats the difference here? Nintendo (with the exception of the first two generations) opted to launch new brands each time they released a console, Sony and Microsoft opted to line-extend from their previous console brands, the Xbox and the Playstation brands. Sony has even retained many asthetic similarities of the Playstation 2 in the Playstation 3, and adorned the console with the classic Playstation logo and similar controller designs.

Both Microsoft and Sony are enormous corporations, with interests in a wide variety of industries besides video game hardware. They have each sought to distance their umbrella brands from the consoles, however they chose not to do so between console generations.

So while Microsoft and Sony struggle over the same piece of the pie with the same branding and product strategies, Nintendo went the other direction and branded their console differently. The numbers show. The Wii has consistently outsold both Microsoft and Sony’s offerings since its release in 2006, lacking both the strength of hardware performance and software library of its competitors.

Apparently product features and quality aren’t everything, especially to the end consumer.