After reading analysis again and again my eyes saw something interesting: I’m talking about the 2 generations rule. And I don’t talk about "You can’t be market leader for more than 2 generations". Something different. Let’s look at history:
Nintendo: When Big N launched the NES they focused on games for the younger crowd – and were successful with their strategy. We all know the NES sold more than 60 million units all around the world and became the most successful console of the 2D era.
The SNES continued to dominate, again with the same strategy. Nintendo focused on kids friendly games and the SNES sold 49 million units worldwide.
With the N64 Nintendo had to change it’s strategy – 3D games were new and looked impressive. But besides the new look Nintendos games were still all the same. As we know the N64 was fairly successful but couldn’t match the high sales of the PSX.
But still Nintendo didn’t want to change: The Cube tried to be an "N64 in better" but sold even worse and Nintendo seemed to get in some real trouble.
So they had to change their strategy and launched the Wii: The Wii focuses on funny games for all ages and Nintendo seems to be right with it’s new path at this point in time – the Wii sells like crazy and is a giant success.
But don’t forget Nintendos handheld market: The Gameboy reached high sales thanks to Nintendos good games and became a huge success.
The GBA continued this trend and sold well, too. Again Nintendo focused on the same games as they did with the original Gameboy.
Nintendo was in a strong position when Sony announced the PSP but they didn’t want to stand still and decided to change their handheld strategy: With the DS Nintendo brought the most successful handheld ever to the market and it’s sales continue to be outstanding.
Sony: When Sony entered the console market they tried to focus on a different audience: With the PSX Style began to be important for gaming consoles. With it’s CD player inside the PSX sold more than 100 million units worldwide.
The PS2 sold even better because Sony continued to walk down the same path they had entered with the PSX. As we know today the PS2 still sells great after the PS3 already launched.
The PS3 though sells fairly bad. What happened? Sony still followed the same philosophy with it’s 3rd home console so they should be more successful with the PS3, shouldn’t they?
Of course Sony was also into the handheld market: The PSP sells good but not nearly as fantastic as the DS does. Again it follows the same philosophy than the PSX and PS2.
Sega tried to focus on a more mature market when they launched master system but Nintendo was so mighty at that time they could never reach the NES sales.
The Megadrive / Genesis though was very successful. Again Sega used the same strategy but they had learned from their earlier mistakes. The Genesis fast became the second system close to the SNES.
Of course Sega wanted to continue this high sales and launched the Saturn – again following the same philosophy. And they failed with it because of the mighty PSX and the fair selling N64.
With the Dreamcast Sega gave it one last try. The forth time they focused on the bit older audience than Nintendo. The DC sold fair (but not that good) but because of Segas financial situation production had to be stopped.
At the same time Microsoft tried to enter the market. Xbox featured lots of games for the hardcore crowd but forgot about casual gamers and didn’t sell that well.
With Xbox 360 Microsoft focuses on the same market again but this time they didn’t have the big competition in this segment they had the last time. The 360 continues to sell fair and could reach the 30 million mark in it’s lifetime.
Conclusion: If you read carefully you probably noticed one thing: every time a console manufacturer kept it’s strategy for more than 2 generations it’s console became more or less a failure (N64, Saturn, PS3, Atari). How big this failure is depends on:
- your financial situation. Do you have bags of money left (N64, GC) or is there nothing left? (Dreamcast)
- How big your audience can be in the best scenario. Could it be big (Nintendo) or is it more or less small? (Sega, Atari in the past)
Sticking on the same philosophy the forth time is often even worse! Examples are Gamecube, Dreamcast, and again Atari. (WHY in the end this consoles were even less successful doesn´t matter. If it is the money or the games – in the end it is the same.)
Second: There are two kinds of changes. have-to-changes and want-to-changes. have-to-changes can be successful (Wii) but they don’t have to be, especially if you just change the look of your games but stick to your philosophy (N64, DC both featured 3D graphics but still the same games).
Want-to-changes are often successful if you
- expand your existing audience ( = focus on a market that is bigger than your previous ones) (examples: Wii (it’s both have to and want to), DS)
- don’t forget about your core gamers (again Wii and DS are good examples)
- don’t have a big competition on the market you want to enter (Dreamcast focused on adult games but the PS2 was better in it)
Third: Keeping the same philosophy for a second generation often brings you even more success (the second generation is nearly almost the most successful one) examples: Sony PS2, Microsoft Xbox 360, Sega Genesis / Megadrive, Atari.
Looking into the future: If we keep this thoughts in mind, what can we say for the next gen?
- Sony would have to change
- Microsoft would have to change
- Nintendo should keep the Wii strategy
- Nintendo should keep the DS strategy
And as we see those things will probably happen.
Now it’s your turn. What are your thoughts? (Note: this is not a "pro Nintendo thread"! Nintendo is just successful at this moment but if they keep their DS/Wii strategies for more than 2 times they could fail too.)
