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www.mygamer.com/index.php?platform=&publisher=&developer=&game=&page=articles&mode=viewarticles&id=337Wii Vs. PS3: A Marketing Analysis
Posted on 12 Dec 2006 by Skeith
The Shot Heard Around the World
By Keith C. Smith
19 year old Jerry Brown from Brooklyn waited in front of the Sony Store in Manhattan since Monday. “It’s all about Sony,” said Brown. “You can play your music while you play the game, it can play Blu-Ray disks, it’s got lots of memory, and the graphics are just sick!” He wasn’t even fazed by the $600 price tag of the system, declaring, ”You get what you pay for.”
Two nights later, a similar line of people snaked around the Times Square Toys “R” Us. People waited on line since only 6 a.m., but they were just as excited to get their hands on the Nintendo Wii that was to be released at midnight. Chris Sandoval, 21 and a student at Queens College, was one of the first people on line. He said he wants the Wii over the PS3 because of its different approach to gaming. “It’s probably one of the most interactive video game consoles ever,” said Sandoval. “Rather than sitting on your ass, you have to really interact with the game.” Using the motion sensing “wii-mote,” players can swing the controller like a bat, slash it like a sword or perform any other motion a game might require. And the fact that at $250, the Wii was less than half the price of its competitors is another boon.
Both Sony and Nintendo have spent the last year-and-a-half playing an elaborate game of marketing strategies to get the edge over their opponents. Now that both systems have made their debut, it’s time to look at how these two companies’ very different approaches have paid off and how each company hopes to win the console wars.
“Truthfully, I’m just here for the resale value,” said Geoffrey Goh, 22, who was near the head of the line for the PS3 release. Ebay bids for the system have reached over $2,500 due to its scarcity. That scarcity is a result of the PS3’s most highly boasted (and expensive) feature: Blu-Ray. Blu-Ray is a new disk format that Sony hopes will replace DVDs over time, but they still have competition from HDDVDs. Still, Sony was willing to push back production of its systems by several months to make sure Blu-Ray could be incorporated. That delay means that Sony will fall far short of its stated goal of delivering 1 million units to North America by the end of the year. SooAnn Roberts, a market expert, told Bloomberg News that she believes Sony won't ship more than 200,000. Of the thousands in front of the Sony Style Store, only 400 went home with a PS3. Security guards and police had to break up several violent confrontations as people hedged their way towards the front.
“I don’t like how Sony treated their fans,” said Taeko Baba, president of New York-Tokyo, which organizes several video game events such as the Gamers’ Night Groove. “They made people wait outside for a week and still so many went home with nothing? They had a release party in their store, but who was that for? Some press and a few people from the line.”
In contrast, people on line for the Wii were amicable and confident that they would be getting one. The system was well stocked, with over 5,000 units at the Toys “R” Us alone and Nintendo is expected to ship over 4 million units by the end of the year. Outdoor performances including the high bounding Zero-G entertained the crowd, and mobile Wii stations, rolling atop segways gave people a taste of what they were waiting for. Everyone on line also received a cap or wool hat with the Wii logo.
“Nintendo has always done lifestyle marketing,” said Baba, “giving to the average players and relying on them to spread the word. They have always been more about fun.”
Typically, video game consoles sell at a loss, with the company making its profit from the game and hardware sales. Sony is following this model, losing nearly $200 per PS3 sold. Sony estimates that it will break even on its investment after three years. Nintendo’s Wii, on the other hand, is actually the first in over a decade to be sold at a profit, albeit a slim one. “With all the money Nintendo will have from actually making money off the system, they should be able to afford making some decent games early on,” said Charlie Zimmerman, 21, who bought his Wii at the midnight release.
The way the two companies have advertised their systems was equally contrasting. Sony has relied on the time tested tactic of the media blitz, investing millions in television and billboard advertisements. Sony also put on an elaborate show at both the Electronic Entertainment Expo (E3) and the Tokyo Games Show, each costing several million dollars. However, because the system has been delayed so long, much of what was shown was seen the year before. Nintendo made a less flashy appearance at E3, but it still carried off most of the accolades from reporters thanks to the number of playable demonstrations. However, Nintendo opted not to appear at the Tokyo Games Show at all, considered to be the largest gaming exposition in the world. Instead, Nintendo invested in the Fusion Tour; a concert tour headlining Hawthorne Heights. Each show had Wii stations set up for people to play and free promotional material including DVDs and apparel.
It’s going to be several months before the winner of this console war is clear, but the first volley has been fired. Both systems have sold out with Nintendo having sold over 2 million units. Sony has declined to comment on the numbers it released.
Contact: Skeith@mygamer.com
