Something is happening to Nintendo's Wii which has been unheard of in its existence, hardware sales forecast have been declining, and projections say it will fall second to PS3 by Q3 2012. The Wii came about to be a low technology platform that was friendly for all users, while relying on established franchises for software rather than investing in new Intellectual Property. They turned the industry around, where the norm was to create increasingly high tech products and target the hard core gaming audience. Competitors have realized this and have released similar functionality on their consoles and apparent saturation may have been reached for the Wii.
On another side, which is sometimes overlooked, another of their star products continues to strive, the Nintendo DS, with the second largest Hardware base in Video Game history, at around 145 million units sold. As other competitors have fallen behind on traditional "mobile" gaming Nintendo has gone strong in this aspects with new models being sold almost yearly (DS, DSi, DSi XL, 3DS) with the same proprietary software model, including some new features, such as WiFi and an internet browser. Information on the margins for these Hardware products aren't public, but due to the difference in price one could assume that the Wii has higher margins, specially due to the fact that they sell much more accessories through it.
What do experts think? That the purchase of software has been reducing in terms of number of consoles in existence, a major indicator that a new platform may be on the horizon. Add this to the news that the PS4 is already in development and it seems that a new generation of console wars may be coming. With distribution moving continually towards digital and technical specification wars escalating, business might be changing for Nintendo. Traditional players have the threat of micro payment gaming online, companies such as Zynga (with their social application games) and a seeming consensus that the future and big bucks may lie away from consoles and more towards mobile and online.
If we look at this objectively, a recent study by PWC forecasted that a in a 30 month period Video Games will be a 70 billion dollar industry, with 40 billion coming through traditional distribution platforms. This doesn't take away from the current trend towards more online mobile gaming; so we can see there is an established way of doing business and a growing trend, but certainly no the death of traditional distribution.
All this being said reports are that Nintendo will come with a High End product to rival the new generations to come with high processing capabilities and 3D support. This seems to be radically different from what is said in this post and increasingly similar to what their competitors might do. This means, probably another traditional console war, in which over time the most consistent winner is Sony with most absolute HW and SW sales through all their platforms. How will Nintendo maintain its advantage from their competitors is hard to know, specially if they do the same as them. There is a significant amount of money to be distributed in the future of video games, but can Nintendo effectively compete?
This is hard to say, specially if they go from not being technologically proficient machine to one that is. If asked a visionary might say that the future of gaming will be totally mobile and digital; but numbers might suggest something different, business as usual (indicated by high investment from traditional players).
It would be interesting to see if their next console would gravitate towards being more portable and less "techy", competing in a different market than Sony and Microsoft. They would then maybe enter in direct competition with tablets and smartphones, a whole other battle in of itself. It seems that the battle lines may be drawn between traditional console gaming and more portable online gaming, with Nintendo going back to business as usual; respecting the difference between both.
Why doesn't Nintendo come up with another seemingly disruptive business idea and try to combine console and portable? They seem like a smart company and the time probably hasn't arrived yet, and more interestingly, it may never arrive.
Thanks to the following sites for information:
http://www.vgchartz.com/article/86406/the-big-three-shipment-update-through-march-2011/
http://schedule.sxsw.com/events/event_IAP7078
http://uk.wii.ign.com/articles/113/1135489p1.html
Tuesday, May 31, 2011
Sunday, May 29, 2011
Google and Time's Person of the Year
Going forward, Google will have its biggest challenge in dealing with Time's most famous person of the year, YOU. Why do I say this? Well in my opinion this mammoth of a company will find its greatest challenge in the future, and probably in their existence with your sense of security and privacy, as well as how you are being probed by a company.
This doesn't convince you? Let me illustrate an example that might give you an idea. As a digital business man/woman you're contracted by a growing company to help it "develop its business", and one of your ideas is to move IT operations to the cloud (email), with Google. How comfortable will you feel relying on a professional solution platform, that consistently revises your data and uses it actively. Do you think an older generation that is not used this will approve of you decision to let another person to be completely privy to what you and your customers share. Now apply this to your personal email, where potentially you have very personal information as well as credit card numbers and other small things you wouldn't want others to see.
You can ask yourself, why does Google do this, why probe around. Well the answer is easy, and they can't say it clearer, through the systematic analysis of your data they can (through their mythological algorithms) deliver contextual ads to you which might be of interest and more importantly increase their click through rate. A personal example; I recently booked a trip within Europe and while I received confirmation of it to my email, suddenly ads were appearing through my Google navigation of hotels in that exact same city. To my taste a little bit to personal...
It is true that now a days most digitally native people wouldn't actually mind this as much (as proven by a biased survey in my Digital Business specialization class) but I believe this will change as our life becomes even more mobile. All our interactions are becoming digital and mobile (in which Google will surely win, in my humble opinion) and we're being exposed more and more to digital probing. I would say I am overreacting, but another example might complete the loop on my story. Imagine your a Digital Native, and you really don't mind that your email and personal information (such as maybe personal finance documents) are being probed; then the digital September 11 happens. One security failure, one big PR disaster, when one person like you is completely exposed to the public, terrorist use this information to strike, credit card numbers are released or a case of corporate espionage. How do you feel now?
The point of all this is that Google has clearly shown in the past that they are experts in creating value for users and how they understand user experience. As well they have monetized this by advertisement, and are expanding to other sources, such as SaaS; they are very healthy monetarily. Albeit this they rely on knowing the customer intimately, and as time goes forward this becomes a wholly holistic view of the person, from the people they interact with to their location and financial information. This can spur discontent within the populace and rejection of their services to a certain degree where it has to be managed and dealt with (an idea is a pay for service "sans" all the revision of your data). This discontent can be brought to a tipping point through any major scandal which would become viral and raise people's awayness of how their are exposed digitally and increase opposition to such behavior by corporations. As said before, I believe that if Google continues in its current state of business it will continue to prosper, but I see a latent problem with users privacy and data security.
Unfortunately for this blogger, this is probably a told you so post, in which if Google properly manages the problem it will never become an issue, but if it explodes, I can certainly say I told you so...
A brief video from Google related to the subject: http://www.youtube.com/watch?v=1SCZzgfdTBo
This doesn't convince you? Let me illustrate an example that might give you an idea. As a digital business man/woman you're contracted by a growing company to help it "develop its business", and one of your ideas is to move IT operations to the cloud (email), with Google. How comfortable will you feel relying on a professional solution platform, that consistently revises your data and uses it actively. Do you think an older generation that is not used this will approve of you decision to let another person to be completely privy to what you and your customers share. Now apply this to your personal email, where potentially you have very personal information as well as credit card numbers and other small things you wouldn't want others to see.
You can ask yourself, why does Google do this, why probe around. Well the answer is easy, and they can't say it clearer, through the systematic analysis of your data they can (through their mythological algorithms) deliver contextual ads to you which might be of interest and more importantly increase their click through rate. A personal example; I recently booked a trip within Europe and while I received confirmation of it to my email, suddenly ads were appearing through my Google navigation of hotels in that exact same city. To my taste a little bit to personal...
It is true that now a days most digitally native people wouldn't actually mind this as much (as proven by a biased survey in my Digital Business specialization class) but I believe this will change as our life becomes even more mobile. All our interactions are becoming digital and mobile (in which Google will surely win, in my humble opinion) and we're being exposed more and more to digital probing. I would say I am overreacting, but another example might complete the loop on my story. Imagine your a Digital Native, and you really don't mind that your email and personal information (such as maybe personal finance documents) are being probed; then the digital September 11 happens. One security failure, one big PR disaster, when one person like you is completely exposed to the public, terrorist use this information to strike, credit card numbers are released or a case of corporate espionage. How do you feel now?
The point of all this is that Google has clearly shown in the past that they are experts in creating value for users and how they understand user experience. As well they have monetized this by advertisement, and are expanding to other sources, such as SaaS; they are very healthy monetarily. Albeit this they rely on knowing the customer intimately, and as time goes forward this becomes a wholly holistic view of the person, from the people they interact with to their location and financial information. This can spur discontent within the populace and rejection of their services to a certain degree where it has to be managed and dealt with (an idea is a pay for service "sans" all the revision of your data). This discontent can be brought to a tipping point through any major scandal which would become viral and raise people's awayness of how their are exposed digitally and increase opposition to such behavior by corporations. As said before, I believe that if Google continues in its current state of business it will continue to prosper, but I see a latent problem with users privacy and data security.
Unfortunately for this blogger, this is probably a told you so post, in which if Google properly manages the problem it will never become an issue, but if it explodes, I can certainly say I told you so...
A brief video from Google related to the subject: http://www.youtube.com/watch?v=1SCZzgfdTBo
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