It has been very competitive in game console market when Nintendo announced their new product “Wii”. XBOX and PlayStation had taken a major market share since Wii’s predecessor Game Cube lost ground in the game console market. Nintendo understands only price does not help them to gain back market shares. It is “Differentiation” will make things change.
i) Technology and R&D - Nintendo had been concentrated on R&D and technology design to make Wii different. These newly designed controllers are to fit human’s hand and make users feel they are holding tennis rackets, bowling...etc. It is totally different with the competitor’s standard handheld controllers. ii) Market Segment – New design are to position Wii as a console for gamers of all ages and teastes. The broad target audience is how Wii differentiate itself from other competitors in the market. Major competitors like XBOX and PlayStation are mean more for the teen and young age game fever group.
Although it is very obvious Nintendo applied “Differentiate strategy” for Wii, there are something we would suspect that Nintendo has stuck in the middle of “Cost Leadership” strategy. It is argued that if Nintendo select more than one approach, and then fail to achieve them, then Nintendo gets stuck in the middle without a competitive advantage. Wii, in compare with XBOX and PlayStation are much lower in cost because it does not include advance central processor nor a high definition video player. The graphics of the games displayed is behind its competitors. The concern now is not only its production problem but lower graphics quality in their games product.