"Some people make money on the screen, but we decided to spend ours on the gaming experience. It's an investment ... not simply to improve the market, but to disrupt it."
- Satoru Iwata, CEO of Nintendo
Nintendo reported its fiscal year results last week. Ho hum. $3.3B in profit and a nice tidy growth of 142% year-over-year. Sales of its new star product offering, the Wii soared, beating expectations by more than 53%. They expect to sell 25M units in the upcoming year. Meanwhile, Microsoft and Sony posted disappointing results in their competing offerings. Microsoft's gaming division lost $228m and Sony's Playstation continues to languish behind in sales. Why is Nintendo winning?
We think they're great example of tuning in to create a breakthrough experience.
Far too many companies limit themselves in development to producing a product that solves only one component of the problem they've observed in the market. There is another level to get to these days and it involves tapping into the perspectives that your buyers build about the 'experience' of doing business with you. We're seeing the trend time and time again.The key to a product that breaks through in today's market is not how clever it is or a unique capability that it offers vs. the competition. It's much more aligned to how simple it is to create an enjoyable experience.
The Wii is remarkably simple. Easy to setup and use and provides an environment for a whole family to play and be entertained. Two weekends ago, I thoroughly enjoyed an evening at home with my 8 year old daughter, 19 year-old daughter and her boyfriend, my wife and my parents (ages withheld due to privacy concerns). We spent hours playing golf, tennis, bowling and baseball with my 8 year old's Wii. Not a one of us had any issues learning how to use the device (no weird joysticks or some other device to master a complicated game). It was as simple as simple could be.
Simple is smart!
So how do you create simple? Interestingly enough, the behavior we studied in Tuned In that is driving these companies is the opposite of what you think. It's not as much about understanding the nuances of the technology to be developed or what the competitors are doing, it's much more about tapping into what we call the marketplace of 'potentials'--people who have yet to buy anything in the product category--and figuring out how to provide an experience that will attract them. It's what Scott Anthony calls the growing market of "nonconsumers" and it's fueling a whole new generation of breakthrough products.
When you study the potentials, really study them, you'll develop a much more complete picture of all the little things that are barriers to adoption. Breaking down those barriers is the single most important thing to focus on if you want to create resonators like the Wii. And once you do it, the key is to keep focusing on the next level of barriers and the next wave of potentials. Just this month, Nintendo announced an extension called the Wii Fit, a "Balance Board" that enables you to use your Wii for things like Yoga. Wow. This has the potential to capture a casual user (maybe Mom and Dad) and turn them into passionate daily users.
It IS the experience that you should focus on. The title of this post is a rip-off from Jim Carville's famous mantra for Bill Clinton's first presidential campaign (It's the Economy Stupid). I apologize for that but in today's environment with so many competing visions for what you should be focusing on, we felt like the analogy was an appropriate one. Forget about the many things wasting your time and focus on the one that matters ... create a simple experience that new buyers will embrace!
