Nintendo Wii U: Launching in Apple's Shadow
Price and date for the Wii U launch are expected this week, but will Nintendo's press event be overshadowed by Apple?
Nintendo has a very important holiday season ahead of it with the launch of the Wii U, its next-generation console. Current console sales are lagging badly (August hardware sales in the US were 39 per cent lower than last year), and Nintendo's Wii is performing worst of all, as consumers anticipate the launch of the Wii U. After the lackluster launch of the 3DS, the industry is wondering if Nintendo's Wii U launch will be the success that so many are hoping for.
Nintendo has scheduled a major press event for September 13 in New York City, where it's anticipated it will reveal the launch date and pricing for the Wii U. On September 12, Apple is announcing the new iPhone in San Francisco. Rumors suggest Apple will introduce the iPad Mini (an iPad with a 7.85 inch screen) in October, which may be around the same price point as the Wii U.
Did Nintendo make a huge PR mistake by scheduling its event the day after Apple's? As you might expect, most PR professionals in the game industry prefer not to be named when talking about a major game manufacturer that's not their employer or their client. Some declined to to comment on the issue at all, but others provided some insight to GamesIndustry International about Nintendo's PR efforts.
One PR veteran feels that Nintendo has more to worry about than this event. "My main thought is that Nintendo has a bigger PR problem than the date of its press conference. The biggest issue Nintendo has is the lack of anticipation or confidence. They have not created enough excitement and confidence among both consumers and developers, nor has their quiet given people the sense that a delightful surprise awaits. There seems to be a cloud hanging above them of 'concern.' They did not do a great job after E3 of bridging toward the fall. If they want this press conference to succeed, making people believe that there will be a surprise or prrof of a big flagship title may help. Highlighting their focus on third party or any other innovations would also help."
The veteran exec continued, "It seems that Nintendo does not think of Apple as a true competitor, and they seem to be relying on the fact that their intense focus and disregard of the rest of the market will prevail again. It's interesting Nintendo is doing their press event in New York; that feels like a statement of appealing to the mainstream press, the mass market (as opposed to Silicon Valley or the game developers). But Apple is already mainstream and doesn't really need that, of course. It's possible Nintendo believes reporters who cover interactive, games and tech will simply cover both events, and since they don't seem to really think they are in the same business as Apple, they may be surprised."
The exec was clear about what Nintendo needs to do next: "From here on out they need to really close the gap, make a statement and gain consumer confidence for the retail launch."
Meelad Sadat, PR director at [a]list games, notes that the calendar doesn't have a lot of room for PR events at this time of year. "When it comes to organizing a big launch event you try to avoid conflicts, but eventually you have to pull the trigger. Here both products are coming out this fall for the holidays and there's key info still missing on both - with the Wii U, it's the price point. In about a month, press bandwidth is going to be eaten up with one holiday product push after another. So there's not much room to dilly dally."
The Wii U may be debuting the day after a new iPhone, but Sadat feels it may not be that much of problem. "This might be a case of different vibes for different tribes. The iPhone launch will surely get coverage on game sites, but at the end of the day it's a smartphone. It'll get launch coverage and a follow up piece or two to have its hardware dissected. With the Wii U, we're getting the first next gen console. I think with game press and for the people who religiously follow game news, they'll get their fill of Wii U coverage."
Sadat feels that Nintendo shouldn't change their timing as this point. "Whether this was an orchestrated showdown at high noon or a couple of gunslingers who bumped up against each other at the bar, neither should blink. That's my advice. Can you imagine the headlines? 'Apple's new iPhone sends Nintendo running for cover.' Maybe as a headline that needs an edit, but you get my point."
Nintendo's got some work to do to make the most of this press event, Sadat notes. "As for impact, unfortunately Nintendo's introduced a piece of hardware that's only raised questions since it was announced. There are questions around the system's capabilities compared to this generation, GamePad issues and how it might slow down game performance, and of course price point. The latter comes down to what it costs to take the system home with two controllers, whether that's a GamePad and Wiimote, and a game. If that's climbing towards $400-$500, look out. If I'm a hardcore gamer, do I spend that money or wait to see what powerhouse next-gen console Sony and Microsoft are planning?"
Sadat continued, "If I'm looking at making this the kids' best Christmas ever, is it with this pricey, cumbersome looking game console or an iPad (or even the iPad mini, which very well could be on deck for Apple's upcoming event)? Nintendo's event needs to be a wonderfully orchestrated, entertaining affair that answers troubling questions. I think I just talked myself into catching the live stream."
Scott Steinberg, head of business consulting firm TechSavvy, argues that Nintendo's event scheduling is not optimal, but that's not the whole story. "Few times are ever optimal in the fall/holiday corridor, but heightened media noise levels certainly won't help efforts here. Which is to say that going head-to-head with other firms, especially Apple - the 10-ton gorilla of the technology world - is always ill-advised. Timing here is unfortunate, and will almost certainly lead to dampened attendance and news pickup. However, actual traction is going to depend on just what information Nintendo has to reveal, and how emphatically it plans to go about promoting it. Don't underestimate interest in the new generation of consoles, though - while it may not receive as much media attention as it would have had conferencing timing been more spaced out, Nintendo's announcements will still be newsworthy, and should receive considerable pickup."
Will Nintendo's Wii U PR get lost in the noise over a new iPhone launch? Steinberg thinks the answer is obvious. "That depends on just what Nintendo has to reveal. However, let's put it this way: should the world's best-known technology company choose to reveal a new edition of one of the globe's most-beloved technology products, it's safe to say that it will command the lion's share of ink, and front-page headlines."
Would moving the date of Nintendo's event still be a good idea even at this late point? What would be your advice? "As veteran publicists and meeting planners might reveal, moving dates and key events is often an extremely difficult proposition, even in the best of circumstances, and one few organizations would opt to voluntarily undertake. At this point, I'd counsel letting key information points leak a couple of days early to providing better spacing between announcements and capitalize on lulls in news coverage before the press catches Apple fever and public speculation hits its high. Saving a few surprises for the event will of course be necessary, but the vital information points - pricing, release date - should be communicated and publicized strategically before potential windows of opportunity tighten or shrink."
What would you advise Nintendo do during the event in order to get the most impact during an increasingly noisy time period? "During the event, it's quite simple - stick to steak and potatoes, but serve up a special surprise for dessert. Which is to say it's time to talk turkey: to grab the most media attention, it's time to address consumer and media's key questions, showcase standout titles and reveal a major unforeseen announcement or two that the company's been keeping up its sleeve. Simply announcing new features, development partners and retail info alone won't be enough: This close to launch, it's time to see just what the machine has to offer and why we all can't afford not to be queueing up to buy it on day one."
It's clear from previous statements by Nintendo's CEO Satoru Iwata that Nintendo doesn't perceive itself in competition with Apple, and so it seems logical that Nintendo wouldn't care at all when Apple might be scheduling a press event (the approximate date of Apple's event has been rumored since July). For Nintendo to change the date now, that would be admitting that Apple products and what Apple does might have an effect on Nintendo's business. Nintendo's pride will make it assume that the gaming media will cover the Wii U in detail, while Apple's products will only get a cursory mention.
That's probably true as far as the gaming media goes, but for the mass media, Apple's products are clearly more important. It is, after all, the most valuable company in the world. Analysts expect Apple's iPhones to sell in the range of 30 million units in the last three months of 2012, which is at least 10 times as many units as Nintendo will be selling of the Wii U in that time frame. The timing of the two events will certainly reduce Nintendo's coverage in mainstream press outlets, and Nintendo's PR team in the US has probably informed management of that, to no avail.
A recent example shows clearly how much (or how little) the Nintendo of America team can influence Nintendo headquarters. At Nintendo's E3 press event, Nintendo of America president Reggie Fils-Aime ended the show with a statement to the effect that the crowd would get one more walk through NintendoLand. Naturally, the assembled press expected perhaps something exciting or interesting, maybe a reveal of more NintendoLand gameplay. Instead, the big screen showing NintendoLand displayed a fireworks display inside of the software. People stared around in puzzlement, still expecting something interesting... then the fireworks ended, and everyone shuffled out, still wondering what was going on.
This made no sense unless you know that to most Japanese fireworks are something very special indeed, and they'll drop everything to pay attention to them. So from the Japanese perspective, a fireworks display would be a thrilling way to end a press event. Undoubtedly Nintendo of America would have said something to Nintendo Japan about this idea not meaning much to the US audience. Yet, the press event ended with the fireworks... showing just how much Nintendo allows Nintendo of America to influence events.
Ultimately even if Nintendo's press event is lackluster, they may still be able to orchestrate a strong launch performance. If the hardware (and whatever it comes with) is seen as a great value, success will follow. That value proposition will need some compelling software, though. As Bing Gordon noted, Shigeru Miyamoto has created software worth at least $200 or more - since people bought consoles just to play some of his software titles. Super Mario Bros. for the NES, Zelda: A Link to the Past for the SNES, or Super Mario 64 for the N64; those are all titles that sold hardware. So far, none of Nintendo's launch titles for the Wii U seem up to that level; we may have to wait months for those killer pieces of software (as we did with the 3DS).
It's worth remembering that Nintendo has well over $10 billion in the bank, plus billions more in hard assets. It can well afford several years of losing half a billion dollars or so. The damage caused by a lackluster launch would be more to the third-party developers, who certainly wouldn't want to wait to see significant sales from Wii U games. A slow start for the Wii U would mean less investment by third-party developers into Wii U games, which in turn would mean fewer reasons to buy a Wii U.
Nintendo has a lot riding on this press event, and the entire industry will be watching to see how much excitement Nintendo can generate over the Wii U. Microsoft and Sony will definitely be watching closely, judging just how much excitement Nintendo is creating, so they can determine what (if any) moves they may make in response. How will we know what Sony and Microsoft really think about the Wii U? Watch what they do over the next month. If we see price cuts on consoles or significant added value bundles, that's a sign that Sony or Microsoft feel they need extra help to sell hardware this holiday season.
As for Nintendo, time is growing short before the hardware hits the market. It will need to generate some saturation marketing to create awareness and build demand for the Wii U, along with some excitement in the media and compelling launch titles. The excitement generated by its press event will be a good indicator of how well the Wii U will sell this Christmas. Nintendo, the world will be watching... if they can tear themselves away from ordering their new iPhone, that is.
TL;DR. Something about Nintendo dooming.