The market for video game consoles has been growing steadily for years and accelerated in 2006 with the introduction of next generation consoles from Microsoft (Xbox 360), Sony (PlayStation 3), and Nintendo (Wii). Advances in technology have made it possible for game console companies to affordably deliver powerhouse systems to consumers, providing them with an unparalleled level of game play.
As the video game industry continues to mature, many surprising consumer trends are beginning to emerge. First, graphics are no longer dominating consumer choices. People are looking for interesting and involved game play and are willing to sacrifice visuals if the game is fun. Second, consumers have shown a preference toward online play and user communities. Finally, customization and personalization have come to be almost commonplace.
Of the new crop of next generation consoles, only Nintendo seems to have truly capitalized on what users are demanding. While all three consoles include online gaming, both Microsoft and Sony decided to pack their machines with top of the line hardware. Nintendo decided to take an alternative path, including simpler hardware and instead concentrating on game play.
Two key features of the Wii exemplify this focus. First, Nintendo completely revolutionized the way games are played, including motion sensitive controllers that enable an added level of game play. Users are now required actively move and interact with games rather than just mash buttons. Second, Nintendo allows users to create Miis, personal avatars that can be used in various games. Miis can be sent to other Wii consoles and stored on the controllers so that users can bring their own characters with them. Also, Nintendo has set up "channels" which are available via the Wii where Miis can interact. For example, in the "Voting Channel" a user can use their Mii to cast votes and view worldwide results to various questions.
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Focusing on gameplay, Nintendo chose to use previous generation hardware when creating the Nintendo Wii. In fact, the processor in the Wii is very similar to the one used in the Nintendo GameCube, which debuted in 2001. Nintendo bundled its killer application, WiiSports, with every console so that users would be able to appreciate the innovation that went into the design of the Wii. (view source) The results speak for themselves: in March of ’07, Nintendo sold 259,000 Wiis, 60,000 more than Microsoft’s Xbox 360 and double that of Sony’s PlayStation 3. (view source)
Also, more an more users are using their consoles to interact online. According to a Nielsen media survey:
"Since Q4 2003, the universe of connected console households has grown approximately 77%. In Q4 2006, we estimate that more than 28 million US households owned or rented at least one console system capable of connecting to the Internet (even before consideration of the Sony Playstation 3 or the Nintendo Wii, both released in late 2006). Among those households that owned the Sega Dreamcast, Sony Playstation 2, Microsoft Xbox, Microsoft Xbox 360 or Nintendo Gamecube, we estimate that 16%, or approximately 4.4 million console households, subscribed to a service to connect their system to the Internet. In Q4 2003, just 2.5 million households (10.6% of those who owned a connectable system) subscribed to such a service." (view source)
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