Wii & the 4 Types of Gamers (Great article on the 'Wii Bubble' theory)

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http://blog.wired.com/games/2007/06/opinion_the_wii.html

Opinion: The "Wii Bubble" and the Four Types of Gamers

" I think the Wii bubble will burst any day."

That's what veteran game journalist Steve Kent told USA Today at the recent Nintendo media summit. Steve Kent is a great person and a smart guy. He's more than entitled to his opinion. But we're on different sides of the fence, here.

More specifically, while I acknowledge that there's some truth to the idea that Wii's lowered graphical power might be a weak point as the years go by, you can't just look at that in a vacuum. You also have to weigh it against all the advantages that it brings.

Also, when we say that "gamers" will eventually be turned off by Wii's last-gen tech, who do we really mean? I think that by looking at the four different types of people who purchase game consoles, we can get a clearer idea of what is really going to happen. And I don't think it involves a bubble burst.

What got me thinking about this in the first place was a small back-and-forth that I had in a comments thread recently with a reader, talking about "casual gamers" and Microsoft's newfound, post-Wii pursuit of same. I've noticed this confusion come up a lot recently, especially during the year before Wii's launch.

Before blue oceans and innovators' dilemmas, the "casual gamer" was the guy who played Xbox but wasn't a game nerd. He'll play Halo with his buddies for hours. But the new definition of "casual gamer" is your grandma. She loves "Cooking Mama." Tyler B thinks she is ruining gaming.

These are two very distinct groups. Add them to the other two types of game console buyer and you've got four groups who are all affected very differently by fluctuations in price and hardware power.

1) Hardcore Gamer

Set apart from "people who play games a lot," these are the people who are deeply into video games, gaming subculture. Can spend more time a day reading game websites and posting on forums than actually playing games, sometimes. Love sales charts and interviews with executives. They have huge collections of games. Played ICO and Katamari Damacy back before it was cool.

Percentage of audience: Small. While they are the trend-setters, the early adopters, the vanguard, they are dwarfed by the #2 Casual Gamers, who make up the vast majority of console owners. They make up for it by being really loud and buying more software than anyone. So brand-loyal that a small company can eke out a living selling games just to these gamers, although it is a fine line they have to walk.

Console buying habits: They buy the major game consoles as soon as they come out, or as soon as they can afford to. (If they can't afford to buy all consoles, will choose one and become a rabid fanboy of that system to make up for it.) It's not that they are completely price-insensitive: they wouldn't drop $600 on a 3D0. Are not quite sure $600 on a PS3 is a good idea, either, but it's definitely tempting, which is significantly more than can be said for the other groups.

Affected by "Wii bubble burst": Minimally, if at all. Remember, these are people who even today will go back and play Revenge of the Gator on the black and white Game Boy. They like hot graphics, but by and large, as long as the gameplay is compelling, it's not critical.

2) Casual Gamer

The original "blue ocean" that Sony triumphantly sailed into in the mid-nineties. 18-34 year old males who think games are awesome but only own three of them, and two of those are Grand Theft Auto. Maybe they read IGN and put down preorders for Madden, but that is as dedicated as they get.

Percentage of audience: Huge. Sony sold most of their PlayStation 2 consoles to these guys.

Console buying habits: The prime example in the game industry of "price elasticity of demand." They want an Xbox 360 but most aren't willing to put down a huge chunk of change for one until there's a price drop and a game they've just got to have. As the price drops, the number of "casual gamers" you can get grows exponentially. Past a certain price point, they don't care a bit about longevity or making an investment. It's an impulse buy.

Since Wii was priced right off the bat at an impulse price, it is snatching up a number of these casual gamers earlier in the lifecycle. This is one of the ways that Nintendo "disrupted" the console market, because historically, you sell the early adopters an expensive machine, then gradually drop the price. Nintendo came in with a low-priced entry which was immediately appealing to the mass market, thus disrupting Sony and Microsoft's ability to rely on things happening the way they always have.

Affected by "Wii bubble burst": Significantly -- maybe. This is where the "Wii bubble burst" might have an impact. As the price of the Xbox 360 drops and more of these guys get high-def television sets, which are also plummeting in price, the Wii's price advantage might not matter as much, and the old tech might dissuade them. The novelty of the controller might not be enough of a counter-balance. Then again, it might be. This is where software becomes crucial.

3) Expanded Audience

These are the people being referred to, these days, as "casual gamers." The new "blue ocean." They're being targeted by Nintendo and by EA's new "Casual" division. Coveted -- but totally unreached -- by Microsoft. It's your grandma, and your dad, and everyone who would not have even considered for a second buying a PlayStation 2 -- even though they spent the last ten years playing Solitaire on their work computer and Bejeweled on their phone.

Percentage of the audience: Unknown. Nintendo says it's going to be massive. Skeptics say they are smoking crack. Nintendo's billions of dollars add a certain credibility to their position.

Console buying habits: They are buying the Wii, or nothing. Price is extremely important, which is why Wii was designed to be small and inexpensive. The vast majority of them would still not consider the purchase of an Xbox 360 or PlayStation 3, nor would they have paid $400 for Wii. Much like "casual gamers," each successive price drop on Wii will bring in exponentially more of them. (In theory.)

Affected by "Wii bubble burst": Minimally, if at all. They don't know high-def from high-top sneakers. Sure, they might own an LCD television, but to them the advantages are that it's flat, easy to dust, and matches the curtains. Could not care less if the Xbox 360 has better graphics because it's not at all appealing to them.

4) Kids

Like people, but smaller. Enjoy playing Hannah Montana and Spongebob games, but also family-friendly hardcore gamer fare like Zelda. Wish Pokemon were real.

Percentage of the audience: Sizeable. Are sort of like a combination of #2 Casual Gamers and #1 Hardcore Gamers because while games might be an obsession for them, it's also an obsession for all of their classmates. Kids might love games more than #1 Hardcore Gamers, but they don't buy as many of them: they only get them for birthdays and Christmas, so they play the heck out of fewer products. Can be lucrative with the right approach.

Console buying habits: None, because they don't have that kind of money. They have to convince Mom and Dad to buy it. And since Mom and Dad aren't going to play the thing, price elasticity of demand is huge here, since the one and only thing that affects M&D as consumers is price. Whereas #2 Casual Gamers might up and decide to forego food to blow way more than they can afford on a PS3, Mom and Dad never will.

Now, it's true that unless they're total jerks, M&D won't buy the kid a console he doesn't want. But when they're faced with getting a $250 Wii or not getting a $400 Xbox 360, you'd be surprised how fast kids change their console allegiances.

Affected by "Wii bubble burst": Minimally, if at all. Kids don't buy thousand-dollar home theater setups. They put sandwiches in the VCR. They just want the games that appeal to them. Since Xbox 360 and PlayStation 3 will be far less packed with kid-friendly content, the Wii, very much like GameCube before it, is going to be the kids' dream system. [Note: if they suddenly express the urge to get an Xbox 360 because they want to kill people in 1080p, your little angel has just grown up and graduated to a #2 Casual Gamer.]

Conclusions

So what is the point of all this? Simple: although the "Wii bubble burst" might certainly have an impact on what has traditionally been a high percentage of gamers, this is far from being set in stone. Maybe the majority of them really don't care. Maybe (probably) the Wii's price point will drop alongside the Xbox 360's, so that by the time 360 is scooping up what's left of the $250 crowd, Nintendo's already hitting up the casual gamers who won't buy a system until it hits $150.

And even if there is more backlash than positivity in this one group, you then have to look at how Nintendo's strategy impacts the other three groups. I don't believe it will have any significant impact, because -- albeit for different reasons -- these are groups of people who traditionally have placed far more importance on content than on graphics. And what will happen then is that any backlash that might come from technology-sensitive casual gamers will be offset by the fact that Nintendo's low-cost, low-tech approach will still be hitting the bulls-eye with every other type of human.

Does that mean that Nintendo is now challenged to continue to provide the content that these four disparate groups want? Yes. But that's a different editorial entirely.