Marketing Case Study
Wii U launch: make or break for Nintendo
Three years ago, Nintendo was king of the $78 billion videogame industry. The Wii was a smash hit and Nintendo's DS hand-held was the best-selling portable gaming device. But a series of stumbles—a lukewarm debut for Nintendo's 3DS hand-held game player and a sharp decline in Wii sales—raised questions about whether the company is on the wrong side of a generational divide.
Nintendo has refused to veer from its tried-and-tested formula of creating dedicated videogame machines, passing up a potentially lucrative opportunity to apply its game-making prowess to billions of smartphone and tablet users.
In packing more technological muscle, Nintendo aims to win over the core gamers who never fully embraced the motion-sensing games of the original Wii.
Nintendo started dabbling with the concept of a game machine with a second-screen controller in 2009. At the time, the Wii was still selling well, but Nintendo executives saw its broader reach as a living room hub limited because it required the Wii to monopolize the family's TV when it was in use.
The wireless controller can function separately from the television, so a person can continue playing a game on the GamePad when someone else is using the TV. It only works within close proximity to the console, so the controller isn't meant to be a portable device outside the home.
To push the idea of making the controller a key device in the living room, Nintendo built in a Web browser and video chat capability. The company also added a remote control function that works with video recorders, set-top boxes from cable and satellite providers, and online video services such as those from Hulu LLC and Netflix Inc.
The tablet-style controller can also allow for games where one player has different information than the rest of the players (known as asynchronous gameplay). One of the early games Nintendo created that uses this...