9-712-416
REV: SEPTEMBER 1, 2011
ANDREI HAGIU
Wii Encore?
“’To renew’ applies when we are fighting with the enemy and an entangled spirit arises where there is
no possible resolution. We must abandon our efforts, think of the situation in a fresh spirit then win in
the new rhythm. To renew, when we are deadlocked with the enemy, means that without changing our
circumstance we change our spirit and win through a different technique.”
-Miyamoto Musashi, A Book of Five Rings
The second week of June 2011 must have been an exhausting one for Nintendo President Satoru
Iwata. He had just attended E3 Expo 2011. Held every June in Los Angeles, E3 (Electronic
Entertainment Expo) was the videogame industry’s biggest event, where videogame developers and
the major console manufacturers showed their latest products. Nintendo had experienced an
unsettling three days at the 2011 E3. On Tuesday, it unveiled a prototype of its upcoming Wii U
console, which met with great enthusiasm from participants. On Wednesday and Thursday,
investors made it clear they did not share that enthusiasm: Nintendo’s stock price dropped by a
combined 10%, reaching its lowest level since March 2006, right before the company had introduced
its wildly successful Wii.1
Iwata would have done well to look for inspiration in the writings of master swordsman
Miyamoto Musashi. The problem was that no swordsman had ever had to deal with a situation quite
as complex as that faced by Nintendo. Musashi had fought against a series of well-defined
opponents –once against each (he had killed most of them). Nintendo had to fight against the same
two rivals – the much bigger Microsoft and Sony – over and over again.
With the launch of the Wii and its novel motion-sensitive controller in 2006, Nintendo had caught
Sony and Microsoft flat-footed and had beat their much more powerful consoles soundly by
appealing to a broader, casual gaming audience. As of June 2011, total sales of the Wii stood at over
86 million units, compared to 50 million for PlayStation 3 and 55 million for Xbox 360.2 But the two
larger companies had already begun turning the tide, especially after the introduction of their own,
superior, motion-sensitive technologies. As a result, the Wii had fallen from leader to third place
against the PlayStation 3 and Xbox 360 in terms of total sales for 2010.
In addition, Nintendo was now also facing a series of less clearly defined opponents in the form of
substitutes for console gaming: casual games played on smartphones and on online social networks.
Faced with attacks on two fronts, Nintendo was in a dangerous spot. If the history of
swordsmanship was not going to help find a way out of it, perhaps that of the videogame industry
might?
________________________________________________________________________________________________________________
Professors Andrei Hagiu and Hanna Hałaburda prepared the original version of this case, “Responding to the Wii?,” HBS No. 709-448. This
version was prepared by Professor Andrei Hagiu from published sources. HBS cases are developed solely as the basis for class discussion. Cases
are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
Market Birth, Collapse, and Rebirtha
The videogame industry got off to an uncertain start in 1972, when television maker Magnavox
introduced Odyssey, the first home videogame console. Priced at $100 (the equivalent of $532 in 2011
dollars),b Odyssey needed a television screen to project its very limited action. The system came with
12 games.3 However, partly due to some uninspired marketing and distribution decisions, Odyssey’s
appeal proved limited. Magnavox sold more than 100,000 game systems by year-end, but sales
quickly declined and Odyssey was pulled from the market.4
Enter Atari
Around the same time, a young entrepreneur named Nolan Bushnell was developing arcade
games with the use of then-new microprocessor technology.5 In 1972, the company he started, Atari,
launched its first hit game, Pong: two players batted a ball of light back and forth between on-screen
paddles. The game instructions were simple: “Avoid missing ball for high score.”6 Pong was an
immediate success: 8,500 arcade consoles were sold in the first year.7
Bushnell and Atari then went on to create the home videogame industry. In 1974, the company
developed a home version of Pong. While most retailers were wary of the videogame market after
the failure of Odyssey, Sears took the plunge in 1975, and by the end of the year it had sold more than
150,000 Pong systems for $100 each ($414 in 2011 dollars).8 At the same time, thanks to a chip
developed by General Instruments, dozens of toy makers were able to introduce Pong clones. By
1977, almost 75 types of clones were available, each selling for a few dollars.9
All of these early game systems came with one or several games hardwired in their circuits; they
did not allow consumers to add other games.10 This changed in 1976 with Fairchild Camera’s
Channel F, the first console that could play multiple games stored on interchangeable cartridges.
Fairchild sold each cartridge for $19.95 and the Channel F console for $170 ($665 in 2011 dollars).
In 1977, Atari introduced the Video Computer System (VCS) 2600 with games on interchangeable
cartridges and a novel peripheral—a joystick.11 With consoles and games now separated, Atari (and
its competitors) had more flexibility in how they priced their products. Computer makers at the time
were giving away software to sell more hardware, from which they earned their profits. Atari turned
this model upside down. The VCS retailed at $199 ($731 in 2011 dollars), which was just a small
margin over the console’s manufacturing cost. Each cartridge cost less than $10 to manufacture and
sold for $30.12
By 1980, thanks in part to the introduction of the Space Invaders game for VCS, Atari commanded
an 80% share of the videogame market.13 According to an Atari history website, “designers had
unknowingly created a console whose hidden potential was quickly discovered by programmers
who created games far outperforming what the console was originally conceived to do.”14
One group of such developers was Activision, founded in 1979 by four programmers15 who had
left Atari. Activision was an instant success, which stimulated further defections of Atari employees.
a This case focuses on the market for home videogames played on consoles; it does not cover arcade games and videogames
played on handheld devices.
b All conversions to 2011 dollars were calculated using the Federal Reserve Bank of Minneapolis’s “CPI Calculator,” available
at http://www.minneapolisfed.org/.
2
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
712-416
Atari perceived these first independent developers as a threat to its business. It sued Activision
for $20 million, claiming unfair competition and conspiracy to appropriate trade secrets.16
Eventually, Atari had to agree to allow any independent game designer to market games for the
VCS 2600, on the condition that Atari receive a fixed royalty for each cartridge sold.17 Since Atari had
not foreseen this arrangement before VCS 2600’s launch, it had not designed the console with the
technological capability to lock out unwanted developers. Therefore, it had very little success
enforcing the payment of royalties. Most independent game makers developed their games without
obtaining permission from Atari—or paying anything to Atari. Soon, more than 100 independent
developers were marketing more than 1,000 games of highly variable quality for the Atari system.18
Too Much of a Good Thing—Prices and Volumes Crater
The quick growth of the home videogame market ended abruptly in 1983. After reaching a peak in
1982, the industry lost 97% of its annual sales volume in three years. Many blamed the industry’s
crash on the proliferation of cheap and uninspired game software.19
Independent software houses collapsed into bankruptcy like dominoes, unloading their unsold
game cartridges with retail prices as low as 99¢, lowering demand and depressing prices for all other
games in the process. According to one source, of more than 130 significant videogame software
firms in 1982, only five or six survived the crash.20 One of the most notorious examples of the
inventory nightmare associated with the market crash involved an Atari game based on the movie
ET: The Extraterrestrial. After the game turned out to be a dud, Atari was forced to dump six million
ET cartridges into a landfill.21
Atari, the industry’s leader, was the biggest casualty of the crash. With games that were meant to
be priced at $40 selling for $4,22 Atari’s console unit sales fell from 5.1 million in 1982 to 3 million in
1983, a year in which it recorded an operating loss of $539 million. In 1984, Atari was sold by its
parent company (Warner Communications) at a loss.23 In the process, however, Atari had been
approached by a little-known Japanese game manufacturer that offered to license to Atari the nonJapanese rights to a new game system. With Atari in dire straits, negotiations stopped short of any
agreement.24 The Japanese game manufacturer was Nintendo, whose new gaming system revived the
home videogame industry and then dominated it until the beginning of the 1990s.
Nintendo Takes Control
Nintendo, based in Kyoto, Japan, was founded in 1889 as a maker of Japanese playing cards. In
the 1970s, Nintendo expanded into arcade games. In 1977, the company acquired a license to
manufacture and sell a home videogame system based on Magnavox’s technology. The company’s
engineers focused on improving image quality. Nintendo introduced its Famicom system in Japan in
1983 and in the U.S. two years later under the name Nintendo Entertainment System (NES). The NES
retailed for $249 ($557 in 2011 dollars)—at an operating loss.25 Nintendo’s approach for designing inhouse games was to focus resources on developing one or two hit games per year rather than a larger
number of lesser successes. Among the hit games put out by the Nintendo team were Super Mario
Brothers (1985), The Legend of Zelda (1987), and Metroid (1987).26
Nintendo also entered licensing agreements with third-party game developers in order to reach a
critical mass of games for its new system. Nintendo decided, however, that it had to closely monitor
the quality of games sold on its platform in order to avoid the fate of Atari during the 1983 crash.
Each NES cartridge was equipped with an authentication chip, without which the game software
could not connect to the console circuits. This chip served two purposes: it enabled Nintendo to
3
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
extract royalties from third-party developers, and to maintain tight control over the supply of games
for its console through its “Seal of Quality” policy. Indeed, no game could be published on the NES
without Nintendo’s approval, and no single developer could publish more than five games27 per year
for the NES.c
Initially, U.S. developers who had survived the 1983 crash were reluctant to sign up with
Nintendo and preferred to remain focused on the emerging PC gaming market.28 By 1990, however,
most developers had signed up.
At the time, NES consoles could be found in one of every three homes,29 and 70% of U.S. homes
with children between ages 8 and 15 housed a Nintendo console. Nintendo controlled 90% of the
gaming market, and it was estimated that in the U.S., 16 cents of every dollar spent on toys in 1989
went to Nintendo.30 Indicating the prevalence of Nintendo’s Super Mario Brothers game series, a
market evaluation company found that the Mario character was more popular among U.S. children
than Mickey Mouse.31
Dynastic Successions
Competition in the videogame industry took place in five- to six-year cycles or “generations,”
defined by advancement of the underlying technology (see Exhibit 1). Consoles in each successive
generation allowed for games with superior graphics and more realistic action. Nearly all
technological leaps from one generation to the next were marked by a change of industry leadership,
as illustrated in Figure A.
Figure A
Leaders by Generation
Generation
8-bit
8-bit
Datesa
Contending Consoles
1976–1983
Fairchild Channel F, Atari VCS 2600,
Coleco’s ColecoVision
Atari
Nintendo NES, NEC’s TurboGrafx-16,
Sega Master System
Nintendo
1983–1988
Volume Leader
16-bit
1988–1994
Sega Genesis, Nintendo SNES
Sega
32-bit & 64-bit
1994–1998
Sega Saturn, Sony PlayStation, Nintendo N64
Sony
128-bit
1998–2005
Sega Dreamcast, Sony PlayStation 2,
Microsoft Xbox, Nintendo GameCube
Sony
128-bit
Source:
2005–present
Microsoft Xbox 360, Sony PlayStation 3,
Nintendo Wii
Nintendo
Compiled by casewriter.
a The dates between the release of the first console in one generation and the first console in the next generation.
Sega Dethrones Nintendo
Nintendo’s dominance with its 8-bit NES in the late 1980s and early 1990s did not last long. Sega
Enterprises, Japan’s leading operator of arcade centers, launched its Genesis console with a 16-bit
c Several very successful developers, such as Acclaim, were later granted licenses for an additional five games per year.
4
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
712-416
microprocessor in October 1988 in Japan, more than two years before32 Nintendo released its own
16-bit Super NES.d Although Nintendo had developed and pre-announced its new machine in late
1989, it delayed its release to avoid cannibalizing sales of the 8-bit NES. When it did release the Super
NES, Nintendo decided not to make it backward-compatible with NES 8-bit software, which meant
that games purchased for use on the 8-bit system could not be played on the 16-bit Super NES.33
Sega took full advantage of this window of opportunity. Sega set the price of Genesis at $190 ($342
in 2011 dollars) in the U.S., with games retailing for $40 to $70. By comparison, the Super NES was
priced at $20034 with games retailing for $50 to $80. Starting in June 1991, Genesis came bundled with
Sega’s popular game, Sonic the Hedgehog, at a price of $150; Nintendo matched this price soon
thereafter.35 Like Nintendo, Sega used a security system to lock out unlicensed game developers, and
for profits it relied on sales of its own games and royalties from licensees. Sega charged its thirdparty developers a $16 royalty and imposed no exclusivity clauses from the get-go. Meanwhile,
Nintendo abandoned its exclusivity requirement with the Super NES but charged an $18 royalty.36
Promoted with the slogan “Genesis does what Nintendon’t,”37 the Sega system developed a
“cool” image among teenagers. Sales took off, and software houses scrambled on-board. By January
1993, 320 titles were available for the Genesis console versus only about 130 for the Super NES.38
Even at the end of 1993, after the Super NES had been universally available for more than two years,
the Sega Genesis had outsold its Nintendo counterpart in the U.S., Europe, and worldwide39 — 22.8
million Genesis consoles had been sold worldwide with 126 million associated cartridges versus 21.3
million Super NESs with 113 million cartridges.40 However, Nintendo and Sega achieved similar
profit margins in 1993 (Exhibit 2).
By the end of 1993, both Sega and Nintendo had turned their focus to the development of nextgeneration (32-bit) consoles. Nintendo approached electronics giant Sony Corporation with a
proposal to manufacture a CD-ROM drive for a game system that would use both CD-ROMs and
cartridge software.41 The deal went sour, however, and Sony announced that it would independently
introduce PlayStation, a 32-bit CD-ROM videogame machine, in Japan in late 1994.
Sony PlayStation Overtakes Sega
As it entered the videogame industry, Sony enjoyed a strong, but not unblemished, track record in
the consumer electronics industry. Its Walkman product line set the pace for personal portable stereo
systems during the 1980s, and its televisions commanded premium prices in the 1990s. Yet it had
suffered a serious setback during the 1980s with the failure of its Betamax video cassette recorder
(VCR). The Betamax standard for VCRs was, by most assessments, a superior technology to the VHS
standard promoted by rival JVC. However, Betamax lost out to VHS largely because JVC convinced
movie studios to release movies sooner and more commonly on the VHS standard than on Betamax.
Sony launched the PlayStation in the U.S. in September 1995 for $299 ($437 in 2011 dollars), with
games selling for about $40–$50 each.42 It initially competed against Sega’s 32-bit system named
“Saturn”; Nintendo’s 16-bit Super NES; and later Nintendo’s 64-bit N64 (Exhibit 1).
PlayStation software was targeted at a more mature audience than the traditional core videogame
market of 10- to 16-year-old boys. Early PlayStation hits included advanced sports games such as NFL
GameDay and fighting games such as Mortal Kombat 3, whose graphic violence failed to meet the
content standards of Nintendo. According to Andrew House, then vice president of marketing for
d Super NES was released in November 1990 in Japan and September 1991 in the U.S. Sega entered the U.S. market with
Genesis in September 1989.
5
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
Sony, “We’ve dignified video games. It’s OK to be 30 and to play videogames.”43 Whereas Nintendo
and, to some extent, Sega had always restricted the number of software titles and enforced strict
quality and content standards, Sony was willing to license any PlayStation software that did not
cause the hardware to crash. By 1998, there were more than 400 PlayStation titles available in the
U.S.44 and nearly 1,300 titles available in Japan.45 This proliferation of PlayStation titles led Nintendo
president Hiroshi Yamauchi to warn in 1997 that Sony could kill off the industry with all of “its
garbage.”46 And indeed, Nintendo set the bar high: Many companies had seen costly game
development projects derailed by seemingly arbitrary decisions from Nintendo’s management.
Sony also gave third-party developers an unprecedented array of development tools and software
libraries that made it easier to write games for the PlayStation than for the competing systems from
Nintendo and Sega.47 The latter companies often discriminated in favor of their internal game
developers when it came to supplying tools.48 In addition, the PlayStation read game software from
CD-ROMs, whereas Nintendo continued to rely on cartridges, both for the Super NES and the N64.
While cartridges allowed for faster data access, CD-ROMs had more storage capacity, could be
obtained easily if game makers needed to increase production, and were cheaper to manufacture.
Thus, the price of the PlayStation software was about $15–$20 lower than Nintendo games. Yet
despite the premium price of Nintendo games, third-party software developers earned gross profits
of only $11 per unit for the Nintendo format (versus $18 for the PlayStation format), because
Nintendo charged higher royalties (over $20 vs. $9 charged by Sony) and because the cartridge
format was more expensive.49
As a consequence, Nintendo attracted less support from outside developers and was forced to
develop 57% of its N64 games in-house, versus only 23% in-house development for the Sony
PlayStation.50 On the other hand, N64 software titles averaged sales of 284,000 copies, compared with
85,000 copies for the average PlayStation title.51
By 2000, more than 81 million PlayStations had been sold worldwide, compared with 29 million
N64s. Sega’s Saturn came in third place, having sold only 17 million units by March 1998, when it
was discontinued.52 (The 16-bit Sega Genesis had achieved an installed base of 40 million units.)
Round 128: Exit Sega, Enter Microsoft
Dreamcast and the fall of Sega In November 1998, only eight months after discontinuing
Saturn, Sega launched its next-generation console in Japan.53 Named Dreamcast, this was the first
128-bit system to hit store shelves. Sega hoped that being the first to offer a 128-bit system would
give it an advantage over Sony.
However, because the supplier of graphics chips for Dreamcast had manufacturing problems,
Sega was forced to reduce the supply of machines available at launch. In addition, only four games
were ready for the Japanese launch. As a result, Dreamcast sales were sluggish and, in turn, thirdparty developers were hesitant to commit significant resources to it. By September 1999, 10 months
after launch, Sega had sold fewer than a million consoles.54
The launch of Sony’s PlayStation 2 in March 1999 and the anticipated releases of two other 128-bit
rivals—Microsoft’s Xbox and Nintendo’s GameCube—put the final nail in Dreamcast’s coffin.55 Sega
discontinued the console in January 2001 and three months later announced its permanent exit from
the console hardware business. From then on, the company would focus on developing game
software for other companies’ videogame console platforms.
6
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
712-416
PlayStation 2
Second out of the gate in its generation, Sony’s PlayStation 2 was widely
expected to be the 128-bit bestseller. Sony had already established itself as the industry leader with
the original PlayStation and had cultivated an extensive consumer base and strong relationships with
game developers. PlayStation 2 was set to raise the stakes for the entire industry: With DVD-playing
capability and Internet connectivity, it was, in the words of an industry executive, “a Trojan horse”
for taking control of the living room.56
The new console was also backward-compatible with the original PlayStation, a first in the
industry. The launch price of the PlayStation 2 was $299 ($387 in 2011 dollars), about $100 below its
initial manufacturing cost according to estimates by industry observers.57 Both cost and price were
expected to come down over the console’s lifecycle. According to one estimate, Sony had managed to
reduce the cost of the original PlayStation from $450 at launch to $80 five years later, while pricing it
at $300 initially and gradually decreasing the price to $99 after five years.58
Nintendo was third to launch its new console—called GameCube—in September 2001. GameCube
retailed for $199.59
The new entrant The fourth and last console launch, in November 2001, introduced a new
contender: Microsoft. Its Xbox console carried an initial price tag of $299.60 Microsoft’s entry into the
videogame console business was driven mainly by its concern that the rising popularity of console
games relative to PC games, coupled with PlayStation 2’s novel multimedia capabilities (e.g., Internet
connectivity), might enable Sony’s console to supplant the PC as the electronic platform of choice in
the home. The nascent competition between Sony and Microsoft for leadership in the evolving hometechnologies market was dubbed the “battle for the living room.”61
Initially, Microsoft hoped to establish in the videogame business a set of business arrangements
that resembled arrangements in the PC industry. Microsoft had become a software giant by making
the PC industry revolve around its software platform, the Windows operating system. The strategy
that had allowed it to achieve this position relied on two key pillars. First, Microsoft licensed
Windows to many competing PC manufacturers (e.g., Dell, Hewlett-Packard, Lenovo, NEC) in
exchange for license fees of around $50 per PC sold. Second, it always provided unmatched support
to third-party software developers: Microsoft supplied developers with extensive information and
tools for creating applications compatible with Windows, and it did not charge royalties in exchange.
Contrary to the Xbox team’s expectations, however, game developers and potential hardware
suppliers alike did not want to participate in PC-like arrangements for the Xbox. Microsoft had
expected game developers to embrace the no-royalty proposal enthusiastically, given that Sony, Sega,
and Nintendo were charging $7 royalties and reserved the right to exclude developers or games they
deemed inappropriate for their respective consoles. Yet to Microsoft’s surprise, most established
game developers balked at the proposal, preferring to pay a royalty. When Microsoft’s Xbox team
approached potential third-party console makers, it met with a similar response: Dell, Mitsubishi,
Panasonic (Matsushita), Samsung, Sharp, and Toshiba all declined to manufacture Xboxes.62
In response to this feedback, Microsoft decided to apply the industry norm—$7 royalty fees—to
Xbox games and use a selective certification system for third-party games, similar to the other console
vendors.63 As for hardware production, Microsoft had no choice but to produce the Xbox console
itself (although it sourced the console’s chips from Intel and Nvidia and outsourced actual
manufacturing to Singapore-based Flextronics). Finally, in order to ensure the availability of some
high-quality games at launch, Microsoft acquired Bungie Software Products Group, a computer game
and videogame developer. Bungie’s most notable videogame developed for Xbox was Halo, a bestselling science-fiction videogame.64 In the subsequent years, Microsoft bought a number of other
7
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
game developers. In an interview about the Xbox, Larry Probst, CEO of Electronic Arts, said, “Bill
Gates knows he will not win in this generation of console. But he wants to be in a position to win in
the next round. He told me he will spend as much as it takes.”65
And the winner is… By November 2005, Microsoft had sold 23.7 million Xboxes, slightly
more than Nintendo’s 20.6 million GameCubes. Both were dwarfed, however, by the 89 million
PlayStation 2 consoles that Sony sold.66 Sony’s victory marked the first time in the industry’s history
that the same company dominated two console generations in a row.
In light of GameCube’s poor sales performance, some industry observers suspected at the time
that Nintendo would, like Sega, withdraw from the console business. Xbox was also seen as an
underachiever. Its disappointing sales volume was attributed to Sony’s first-mover advantage;67
others believed the Xbox was priced too high,68 that the console’s design was too large and bulky to
appeal to the Asian market,69 or that Microsoft had suffered from weak relationships with Japanese
game developers.70 Between 2001 and 2008, Microsoft’s Home and Entertainment Division—whose
main products were the Xbox and some of its games—lost over $8 billion (Exhibit 2).71
The Last Generation
Believing that Sony’s victory in the previous generation had been largely due to its earlier release,
Microsoft worked hard to snatch the first-mover advantage. As a result, the Xbox 360 fired the first
shot by launching in November 2005, a full year before Sony’s PlayStation 3 and Nintendo’s Wii hit
U.S. store shelves.72
According to a December 2006 article, “If Sony and Microsoft are the major-party nominees,
Nintendo is more like a cool third-party candidate.”73 The author of the article and many other
industry watchers were expecting the main battle to take place between Microsoft’s Xbox 360 and
Sony’s PlayStation 3. This was because the Xbox 360 and the PlayStation 3 were remarkable
technological achievements and were packed with features that went well beyond videogames.
Referred to as a “digital amplifier” due to its ability to stream digital media (videos, music, and
photos, for example) from PCs, the Xbox 360 also allowed users to chat with and play games against
each other online through its Xbox Live service.74 Sony’s PlayStation 3 had 10 times the power of a
PC and had been called “the most powerful gaming console ever to hit markets.”75 It played highdefinition DVDs in Sony’s Blu-Ray format, stored photographs and music, enabled video
conferencing and allowed users to purchase movies and games through its online PlayStation Store.
Compared with its two rivals, Nintendo’s Wii was significantly less advanced from a
technological standpoint.76 Its graphics processing power was much lower than that of the Xbox 360
and PS3, it was not DVD-compatible, it did not support Dolby Digital audio surround sound, and it
did not have either an online shopping store ora large hard drive to store downloaded games.
Consequently, some of the most popular game franchises in the industry created by third-party
developers (e.g., Take Two Interactive’s Grand Theft Auto) were not made available on the Wii.77
Nintendo did, however, outfit the Wii with one key feature, the first of its kind in the industry:
wireless motion-sensing controllers. Holding these controls, gamers moved their limbs—swung,
batted, punched, etc.—to dictate the actions of on-screen characters. In an interview, Iwata had
explained: “Some critics said we neglected technology and abandoned the high performance-oriented
approach, but I disagree. To enable anyone to enjoy games, we employed cutting-edge technology
where it is not so obvious. High-level technology is necessary to reproduce the motions picked up by
the built-in sensor.”78
8
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
712-416
The Wii Hit
Nintendo introduced the Wii in the United States in November 2006. For $250, consumers
received the slim, all-white console, one motion-sensor controller, one “nunchuck” controller (used
for certain games), and the videogame Wii Sports. Fifteen Wii games were available at launch time, as
were various accessories, including traditional horizontal controllers for “old school” gamers.79 By
comparison, the Xbox 360 and PlayStation 3 started at $299 and $499 respectively for the basic
versions (both offered more expensive versions with additional accessories). Eighteen games were
available during the Xbox 360’s launch80, while 21 games were gradually released for the PlayStation
3 throughout the holiday season following its November launch.81
Despite the lack of sophisticated graphics, the Wii’s innovative and user-friendly motion-sensing
controllers turned out to be a hit with audiences other than the traditional gamer. This confirmed a
2006 press release, in which Nintendo had asserted that “Wii will break down the wall that separates
videogame players from everyone else.”82 Indeed, the Wii met with such enthusiastic consumer
reception that production fell far short of demand for more than 12 months after initial release.
Between release and August 2008, the Wii outsold its two rivals in every month except one. The
Wii’s enthusiastic audience ranged from preschool children to nursing home residents. Even Queen
Elizabeth of England was reportedly a fan.83
Sony and Microsoft strike back
But Sony and Microsoft were quick to learn their lesson and proceeded to respond. In 2010, both
Sony and Microsoft launched their own motion-sensing controllers, the PlayStation Move and the
Kinect for Xbox 360. Sony’s Move controller combined a gyroscope, accelerometer, and magnetic
sensor to track motion in three dimensions for more accurate motion-sensing than the Wii. The Move
itself retailed for $99, or for $399 as a bundle with the PlayStation 3 console. Microsoft’s Kinect
featured a depth-sensing camera and voice-recognition microphone for hands-free, voice-controlled
gameplay without the use of an actual controller. The Kinect was available for $150, or as a bundle
with the Xbox 360 for $299.84 The Move and the Kinect were big hits: Microsoft sold over 2.5 million
Kinect units in its first 25 days, while Sony announced it had shipped over 4 million Move controllers
to retailers in its first ten weeks.85 In addition to the new controllers, Sony and Microsoft further
extended their consoles’ capabilities, including agreements with Netflix that allowed users to stream
movies and television shows on both the PlayStation and Xbox 360.86
As a result, both the Xbox 360 and the PlayStation 3 surpassed the Wii in 2010 sales. U.S. sales of
the Wii during the first 10 months of 2010 were down 24% from the same period in 2009, while Xbox
360 sales were up 24% and PlayStation 3 sales were up 14%.87 The momentum of the Xbox 360
continued to grow: sales during the first four months of 2011 were up 29% over the previous year.88
New substitutes
Meanwhile, dedicated console gaming was coming under increasing competitive pressure from
several new, emerging gaming platforms.
Mobile devices such as Apple’s iPhone, iPad, and iTouch were capturing a growing share of the
casual gamer audience. Mobile game sales were projected to increase to a 15% share of all game
software spending in 2011,89 while software sales for handheld consoles had fallen by 19% in 2010.90
There were over 200 million devices running Apple’s mobile operating system and sales of games in
the Apple App Store were expected to approach $2 billion in 2011. The App Store offered 100,000
9
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
games, each typically retailing for several dollars, which could be purchased and downloaded
directly.91 Apple collected a 30% royalty on each App Store sale.92
Online social games also competed for the attention of casual gamers. Founded in 2007, Zynga,
the largest developer of social games, had grown to over 200 million monthly active users in 2011.93
Zynga developed games for social networking sites such as Facebook as well as applications for the
iPhone, iPod Touch, and iPad. FarmVille, one of Zynga’s most popular games, peaked at 83.8 million
monthly active users in March 2010.94 Users of FarmVille created and managed a virtual farm and
interacted with other users. The game was free, although digital goods such as crop seeds could be
purchased for small amounts.
Other companies were developing innovative game delivery systems that competed with
traditional console gaming. The most prominent example was Silicon Valley-based OnLive, which
offered a cloud-based on-demand service that streamed games to a user’s computer. In 2010, OnLive
had introduced a system for television sets that allowed users to stream from a lineup of over 35
games using a $99 MicroConsole and broadband access.95 By 2011, OnLive was offering over 100
games, renting access to individual games for periods of three or five days at prices under ten dollars.
OnLive also offered users unlimited access to over 60 games for a flat monthly rate of $9.99.96
In 2011, OnLive announced that its service would be integrated into Vizio’s new TV sets, enabling
users to stream games without the use of a MicroConsole.97 The company also announced an OnLive
Player App for iPad and Android, which would let users play OnLive games on tablets either by
touch or with a Universal Wireless Controller. In addition, the Player App would allow the tablets to
be used as touch or motion controllers with high-definition TV sets or computer screens.98
The Next-Generation Dilemma
Nintendo had had a rough first half of 2011. Sales of its new 3DS handheld console, launched in
February, had been sluggish. By the end of March, 3.61 million units of the 3DS had been sold
worldwide, short of Nintendo’s forecast of 4 million units.99 Sales in Japan took 13 weeks to surpass 1
million units, a target reached by its predecessor, the Nintendo DS, in only four weeks.100 And the
Wii continued to lose ground relative to Xbox 360 and PlayStation 3: Wii sales in June 2011 had been
273,000, compared to 507,000 for Xbox 360.101
The major earthquake that had hit Japan in March and the ensuing economic slowdown were
partly responsible. But financial analysts had deeper concerns. They viewed the new gaming
platforms as putting particularly strong pressure on Nintendo, whose recent success had been built
on appealing to casual gamers. Furthermore, in the aftermath of the 2011 E3, they were questioning
Nintendo’s ability to maintain industry leadership over Sony and Microsoft into the next console
generation.
In this context, Iwata needed to find answers to two questions. First, what could his company do
to come up with something completely novel once again (a Wii Encore) in order to escape head-tohead competition against its two larger rivals? Second, how could Nintendo fend off the new
substitutes, which were competing for a large portion of its customers?
10
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Atari
Nintendo
Sega
Nintendo
Sega
Sony
Nintendo
Sega
Sony
Microsoft
Nintendo
Microsoft
Sony
Nintendo
VCS 2600
NES
Genesis
SNES
Saturn
PlayStation
N64
Dreamcast
PlayStation 2
Xbox
GameCube
Xbox 360
PlayStation 3
Wii
11/2006 (U.S.) 12/2006 (Japan)
11/2006 (Japan) 11/2006 (U.S.)
11/2005 (U.S.) 12/2005 (Japan)
9/2001 (Japan) 11/2001 (U.S.)
11/2001 (U.S.) 2/2002 (Japan)
3/2000 (Japan) 10/2000 (U.S.)
11/1998 (Japan) 9/1999 (U.S.)
6/1996 (Japan) 9/1996 (U.S.)
12/ 1994 (Japan) 9/ 1995 (U.S.)
11/1994 (Japan) 5/1995 (U.S.)
11/1990 (Japan) 9/ 1991 (U.S.)
10/1988 (Japan) 9/ 1989 (US)
1983 (Japan) 1985 (U.S.)
1977
Launch Dates
3.2 Ghz
729MHz
128-bit
3.2 Ghz
485 MHz
733 MHz
300 MHz
200 MHz
93.75 MHz
33 MHz
2 x 28.6 MHz
3.58 MHz
7.61 MHz
1.79 MHz
1.19 MHz
Clock Speed
128-bit
128-bit
128-bit
128-bit
128-bit
128-bit
64-bit
32-bit
32-bit
16-bit
16-bit
8-bit
8-bit
Data Width
Features
512 MB
512 MB
512 MB
40 MB
64 MB
32 MB
16 MB
4 MB
2 MB
2 MB
128 KB
64 KB
2 KB
Motion-sensor controllers
Online game library
Internet connectivity
20 GB upgradable hard drive
Internet & media connectivity
Blu-Ray DVD (25 GB)
Bluetooth-enabled
20 GB upgradable
hard drive
Internet & media connectivity
Mini-CD
DVD (8 GB)
Internet connectivity 8 GB hard
disk
DVD (4 GB)
Internet connectivity
DVD (1 GB)
Cartridges (64 MB)
CD-ROM (650 KB)
CD-ROM (650 KB)
Cartridges (6 MB)
Cartridges (4 MB)
Cartridges (0.5 MB)
128 bytes Cartridges (4 KB)
Memory
249
275
552/662
341/455
299/399
499/599
250
376
387
266
283
437
583
327
342
516
731
In 2011 ($)a
199
299
299
199
199
299
399
200
190
249
199
Launch Price ($)
a Represents 2011 equivalent of console launch price in the year of its U.S. release.
Source:
Compiled from David S. Evans, Andrei Hagiu, and Richard Schmalen, “PONG,” from Invisible Engines: How Software Platforms Drive Innovation and Transform Industries (Cambridge:
MIT Press, 2006); Steven L. Kent, The Ultimate History of Video Games: From Pong to Pokemon—The Story Behind the Craze That Touched Our Lives and Changed the World (New York, NY: Prima
Publishing, 2001). The following were accessed via Lexis-Nexis Academic on November 14, 2008: Matthew Fordahl, “New Xbox Processor Offers Powerful Speeds,” Associated Press Online,
October 25, 2005; James Clement, “Sony Quietly Upgrades PSP Processor,” vnunet.com, June 25, 2007; “The Next-gen Gaming Experiment: Finding the Right Consoles for You,” Australian PC
World, March 1, 2007.
Company
Characteristics of Selected Consoles
Console
Exhibit 1
712-416
-11-
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Compustat, Thomson One Banker, Capital IQ, company annual reports.
Gaming Console Producers’a Operating Margin, 1985–2010
a Microsoft and Sony data are for the business segment that includes gaming; Sega and Nintendo data are companywide.
Source:
Exhibit 2a
712-416
-12-
Wii Encore?
712-416
Exhibit 2b Gaming Console Producers’ Operating Profit ($) and Operating Margin (%), 1985–2010
($ in millions)a
SEGA
Operating
Profit
NINTENDO
Operating
Margin
Operating
Profit
Operating
Margin
1985
$268.6
78.7%
1986
$322.3
40.5%
1987
$354.8
34.9%
1988
$442.6
29.7%
1989
$583.6
29.0%
1990
$976.9
42.5%
1991
$1,108.5
33.2%
1992
1993
$359.9
$1,386.2
32.8%
18.0%
$1,009.3
18.3%
SONY
Operating
Profit
MICROSOFT
Operating
Margin
1994
$96.9
4.2%
$1,099.0
23.3%
1995
-$34.0
-1.6%
$673.6
14.0%
-$84.3
-4.4%
1996
-$316.1
-20.0%
$525.7
15.9%
$460.0
13.6%
1997
-$226.3
-17.1%
$958.0
28.4%
$885.0
16.2%
1998
-$241.0
-42.8%
$1,318.6
32.9%
$1,138.0
17.4%
1999
-$88.2
-15.5%
$1,414.0
29.2%
$730.0
11.8%
2000
-$417.9
-23.8%
$675.9
13.1%
-$409.0
-7.7%
2001
-$547.9
-56.8%
Operating
Profit
Operating
Margin
$899.0
24.4%
$623.0
8.3%
-$1,666.0
-85.0%
2002
$844.3
20.2%
$939.0
11.8%
-$866.0
-35.9%
2003
$1,035.1
24.3%
$650.0
8.7%
-$940.0
-33.8%
2004
$1,042.7
21.1%
$404.0
5.9%
-$894.0
-31.1%
2005
$765.7
15.9%
$75.0
0.9%
-$484.0
-15.1%
2006
$1,914.2
44.4%
-$1,973.7
-22.8%
-$1,284.0
-26.7%
2007
$4,895.0
59.8%
-$1,246.1
-9.7%
-$2,066.0
-33.7%
2008
$6,151.3
29.1%
-$1,573.9
-9.7%
$314.0
3.7%
2009
$7,010.9
30.2%
-$739.1
-5.6%
-$3.0
2010
$4,515.4
24.9%
---b
Source:
---
$598.0
-.03%
7.6%
Compustat, Thomson One Banker, Capital IQ, company annual reports.
a Microsoft and Sony data are for the business segment that includes gaming; Sega and Nintendo data are companywide.
b
Not available due to change in segment data reporting.
13
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
Endnotes
Juro Osawa and Daisuke Wakabayashi, “Nintendo Investors Remain Wary Despite New Wii,” Wall Street
Journal, June 9 2011.
2
“Consolidated
Sales
Transition
by
Region,”
Nintendo
Co.,
Ltd.
http://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1103.pdf, accessed July 12,
2011; Paul Tassi, “Xbox Sales Surging, Meaning No New Console Necessary,” Forbes, June 3, 2011; “PlayStation 3
Sales Reach 50 Million Units Worldwide,” Sony Computer Entertainment Inc., April 15, 2011.
1
3 David Winter, “Magnavox Odyssey: First
story.com/odyssey.htm, accessed November 2006.
home
video
game
console,”
http://www.pong-
4
David S. Evans, Andrei Hagiu, and Richard Schmalensee, Invisible Engines: How Software Platforms Drive
Innovation and Transform Industries (Cambridge: MIT Press, 2006), p. 115; David Sheff, Game Over: Press Start
to Continue (Wilton: Game Press, 1999), p. 141.
5
Steven Poole, Trigger Happy: Videogames and the Entertainment Revolution (New York: Arcade Publishing,
2004), p. 19.
6 “Bushnell Creates the Gaming Industry,” GameSpy.com, http://archive.gamespy.com/articles/july03/
25smartest/index26.shtml, accessed December 27, 2008.
7
“How Atari Changed Our Lives for the Better,” Fortune City website, http://lavender.fortunecity.com/
fullmonty/22/atari.htm, accessed December 27, 2008.
8
Jim Stafford, “Ahead of the game: Pong creator likes to get ball rolling on companies,” Knight Ritter Tribune
Business News, October 17, 2006, via ABI/INFORM, December 27, 2008.
9
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, p. 120.
10Ibid.,
11
pp. 120–121.
Scott Mendham, “Close to the heart: Atari,” Australian PC World, January 1, 2002, via Factiva, December 27,
2008.
12
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, pp. 121–122.
13
Ibid., p. 121.
14
Atari Museum.com website, http://www.atarimuseum.com/videogames/consoles/atari_videogame_
consoles.htm, accessed November 2006.
15
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, p. 124.
16
“A Decade of Change: 1980–1989,” Consumer Electronics, January 1, 1990, via Factiva, January 5, 2009.
17
Leonard Herman, Phoenix: The Fall & Rise of Video Games (Union, NJ: Rolenta Press, 1997), p. 75.
18
Dean Dierschow, “The Classic Video Games Cartridge
http://www.xocolatl.com/carts/, accessed December 28, 2008.
List
Server,”
October
21,
1994,
19 Richard Harrington, “Now, Play’s the Thing; Toy Time: It’s the Toast of Christmas ’88,” The Washington
Post, November 25, 1988, via Factiva, December 27, 2008; Evans et al., Invisible Engines: How Software Platforms
Drive Innovation and Transform Industries, pp. 124–125.
20
Martin Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog: A History of the Software Industry
(Cambridge: MIT Press, 2003), p. 280.
21
Steven L. Kent, The Ultimate History of Videogames (Roseville, CA: Prima Publishing, 2001), pp. 237–240.
14
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
22
David Sheff, Game Over: Press Start to Continue, p. 151.
23
Kent, The Ultimate History of Videogames, pp. 240, 268.
24
Ibid., p. 280-283.
25
Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog, pp. 284–286.
712-416
26
Peter J. Coughlan, “Competitive Dynamics in Home Video Games (B): Nintendo Power,” HBS No. 701-092
(Boston, MA: Harvard Business School Publishing, 2001), pp. 2–3.
27
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, p. 125.
28
Kent, The Ultimate History of Videogames, p. 307.
29 Chris Wloszczyna, “Nintendo may find success a hazard,” USA Today, December 27, 1990, via Factiva,
January 5, 2009.
30
Anthony Ramirez, “Waiting for the Zapping of Nintendo,” New York Times, December 8, 1990, via Factiva,
January 5, 2009.
31
Steven Levy, “Hey, It’s More Than a Game,” New York Times, July 18, 1993, via Factiva, January 5, 2009.
32
Marty Schroeder, “Commentary: History of Video Games: From ‘Pong’ to the Wii,” Notre Dame Observer
via UWire, via Factiva, December 27, 2008.
33
Andy Pargh, “Nintendo Plays Hardball with Incompatible System,” Chicago Sun-Times, June 23, 1991, via
Factiva, December 27, 2008.
34 “Sega MegaDrive/Genesis” and “Super Nintendo NES/Super Famicom,” ConsoleDatabase.com,
http://www.consoledatabase.com, accessed January 5, 2009.
35
Russell Blinch, “Sega Proves Nimble in Nintendo Market Fight,” Reuters News, December 30, 1991, via
Factiva, December 27, 2008; Joyce M. Rosenberg, “Super Soaker Leads Summer Toys, Other Outdoor Toys Are
Also Strong, although Video Games Retain Appeal,” Buffalo News, July 8, 1992, via Factiva, December 27, 2008.
36
Oppenheimer and Co., The Video Game Market, November 1, 1993.
37 “CPTV Appoints Former Sega of America President to Board,” PR Newswire, June 27, 1995, via Factiva,
December 27, 2008.
38
Milt Schulman, “New Technology Adds Fuel to Video Game Fire,” Playthings, January 1, 1993, via Factiva,
December 27, 2008; Richard Grant, “Game Console War: Will Dreamcast Be a Nightmare for PlayStation?”
The Mail on Sunday, December 13, 1998, via Factiva, January 5, 2009.
39
Peter J. Coughlan, “Competitive Dynamics in Home Video Games (D): The Nintendo Super NES,”
HBS No. 701-094 (Boston: HBS Publishing, 2001), p. 1.
40 Nintendo Annual Report; Sega Enterprises Annual Reports; Toy Industry Review, Gerald Klauer Mattison,
October 1992; Tokyo Business Today, May 1993, casewriter estimates; Peter J. Coughlan, “Competitive Dynamics
in Home Video Games (D): The Nintendo Super NES,” HBS No. 701-094 (Boston: HBS Publishing, 2001), p. 2.
41 Louis Kehoe, “Nintendo and Sony in Video Games Deal,” Financial Times, October 14, 1992, p. 28,
via Factiva, November 2006.
42
“Console Yourself—It’s Only Money,” The Independent—London, January 8, 1996, p. 8, via Factiva,
November 2006.
43 Mike Snider, “Mario’s greatest challenge: Fighting Sega, Sony, sagging sales,” USA Today, September 26,
1996, via Factiva, January 5, 2009; Coughlan, “Competitive Dynamics in Home Video Games (I): The Sony
PlayStation,” HBS No. 701-099, p. 1.
15
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
44
Matt Byrne, “Action Games More Realistic with 64-bit Program,” The Plain Dealer, December 16, 1998,
via Factiva, January 5, 2009.
45
Irene Kunii, Steven V. Brull, Peter Burrows, and Edward C. Baig, “The Games Sony Plays: Can it use
PlayStation to win mastery of cyberspace?” Business Week, April 15, 1998, via Factiva, November 2006.
46 Ibid.; Coughlan, “Competitive Dynamics in Home Video Games (I): The Sony PlayStation,” HBS No.
701-099, p. 1.
47
Jim Carlton, “Zap, Kaboom! Video Games Sizzle for Holidays,” Dow Jones Online News, November 13,
1997, via Factiva, November 2006.
48
Stefan Thomke and Andrew Robertson, “Project Dreamcast: Serious Play at Sega Enterprises Ltd.,”
HBS No. 600-028 (Boston: HBS Publishing, 1999), p. 8.
49 Robert Fagin and Lenny Brecken, Computer Software: Videogame Industry Outlook, CIBC Oppenheimer,
March 5, 1998, via Thomson Research/Investext, November 2006.
50
Fairfield Research, Video Games State of the Market 1999.
51 “Current Videogame Platforms to Remain Strong Through 2000,” Video Week, November 10, 1997,
via Factiva, November 2006.
52
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, pp. 130–131.
53
“Dreamcast: No Longer Just a Dream!” M2 Newswire, November 30, 2009, via Factiva, December 17, 2008.
54
Kent, The Ultimate History of Videogames, p. 564.
55
Ibid., p. 584–585.
56
Dean Takahashi, “Games Get Serious,” The Red Herring, December 18, 2000, via Factiva, November 4, 2008.
57
Evans et al., Invisible Engines: How Software Platforms Drive Innovation and Transform Industries, p. 131.
58
Dean Takahashi, Opening the Xbox (Roseville, CA: Prima Publishing, 2002), p. 184.
59
Peter Panepento, “Closet Entrepreneurs Find No Profit in Overhyped Xbox,” Knight Ritter Tribune Business
News, December 27, 2001, via Factiva, December 27, 2008.
60
Jennifer M. O’Brien, “Video Gamers Crank it Up a Notch Online,” Computer Dealers News, November 15,
2002, via Factiva, accessed December 16, 2008.
61
“Games People Play,” The Canberra Times, March 22, 2007, via Factiva, December 27, 2008.
62
Takahashi, Opening the Xbox, pp. 153, 167–169.
63 Microsoft Corp., “Microsoft Embraces the Worldwide Independent Video Game Developer Community,”
press release, November 7, 2000, http://www.microsoft.com/presspass/press/2000/Nov00/XPKPR.mspx,
accessed September 30, 2008.
64
Microsoft Corp., “Microsoft to Acquire Bungie Software,” press release, June 19,
http://www.microsoft.com/presspass/press/2000/Jun00/BungiePR.mspx, accessed September 2008.
2000,
65
Paul Abrahams, “Nintendo, Microsoft and Sony Are Pitting Their Consoles against Each Other in an
Industry Worth $20bnn a Year” Financial Times, May 19, 2001, via Factiva, December 27, 2008.
66 Patrick Seitz, “Microsoft vs. Sony Enters New Stage in Video Game Consoles,” Investor’s Business Daily,
November 21, 2005, via Factiva, accessed September 30, 2008.
67
“Get Ready for the Xbox Shootout,” BusinessWeek Online, November 18, 2005, via Factiva, September 30,
2008.
16
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
Wii Encore?
712-416
68
Erin White, “Marketers Tap Interactive DVDs,” The Wall Street Journal, December 27, 2002, via Factiva,
September 30, 2008.
69
Chris Nuttall, “A Defining View of the Future—Interview: Peter Moore of Microsoft,” The Financial Times,
September 6, 2005, via Factiva, September 30, 2008.
70
“Get Ready for the Xbox Shootout,” BusinessWeek Online, November 18, 2005.
71
Data from Computstat, Thomson One Banker, and company annual reports.
72 Rob Watson, “A mean game: In a pivotal year, video console makers battled for supremacy, online role
fantasies boomed, and violence appalled many,” The Philadelphia Inquirer, December 28, 2006, via Factiva,
December 16, 2008.
73
James Surowiecki, “In Praise of Third Place,” New Yorker, December 4, 2006, via Factiva, December 27,
2008.
74
Chris
Morria,
“Xbox
360
Makes
Its
Debut,”
CNNMoney.com,
May
13,
http://money.cnn.com/2005/05/12/technology/personaltech/xbox360/, accessed November 4, 2008.
2005,
75 Johnny Davis, “The PlayStation’s the Thing,” Times Magazine, September 10, 2005, via Factiva, September
30, 2008; Tom Ham, “PS3 vs. Wii: Power Takes On the Fun Factor,” The Washington Post, December 1, 2006, via
Factiva, November 4, 2008.
76 Nicole Ridgway, “Nintendo’s Wii Is Flying Off Store Shelves,” Smart Money, December 19, 2006, http://
www.smartmoney.com/investing/stocks/nintendos-wii-is-flying-off-store-shelves-20527/, accessed Dec. 27, 2008.
77
Brian Garrity, “Analysts see Wii bit of a problem,” New York Post, June 15 2008, via Factiva, December 27,
2008.
78 Fumito Akiyama, “Interview: Forsaking performance race, Nintendo targets non-gamers,” Nikkei Weekly,
December 4, 2006, via Factiva, December 27, 2008.
79
David Rudden, “Nintendo Wii Release Details: November 19, $250, with a Game Included,” CNet Reviews,
September 14, 2006, http://cnet.nytimes.com/4835-10921_7-6637970.html?scp=1&sq=wii%20release%202006&st=cse,
accessed October 1, 2008.
80
Chris Morris, “Xbox 360: How are the Games?” CNNMoney, November 21, 2005.
James Ransom-Wiley, “PlayStation 3 Launch Window Titles Announced,” Joystiq, October 19, 2006,
http://www.joystiq.com/2006/10/19/playstation-3-launch-window-titles-announced/, accessed July 15, 2011.
81
82 Scott Colbourne, “Nintendo Christens New Game Console, the Wii,” The Globe and Mail, April 28, 2006,
via Factiva, October 1, 2008.
83
“Make Way for the Q Wii N,” People, January 6, 2008, via Factiva, January 22, 2008.
Will Greenwald, “Kinect vs. PlayStaiton Move vs. Wii: Motion-Control Showdown,” PC Magazine,
November 6, 2010.
84
85
Ian Paul, “PlayStation Move vs. Kinect: Who Will Win the Holiday Crown?” PCWorld, December 1, 2010.
86
Brad Stone, “Netflix Movies to Stream to Sony’s PlayStation 3,” The New York Times, October 26, 2009.
87
Ben Fritz, “Once-Hot Nintendo Wii Now Struggling for Sales,” Los Angeles Times, November 30, 2010.
88
Ian Paul, “PlayStation Move vs. Kinect: Who Will Win the Holiday Crown?” PCWorld, December 1, 2010.
89
Mike Snider, “Apple’s Got its Eye on Mobile Games,” USA Today, July 12, 2011.
90
Matt Richtel and Hiroko Tabuchi, “3-D Wrinkle for Portable Gaming,” The New York Times, January 2, 2011.
91
Mike Snider, “Apple’s Got its Eye on Mobile Games,” USA Today, July 12, 2011.
17
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.
712-416
Wii Encore?
92
Arik Hesseldahl, “Apple: Soon to Be a Mobile Gaming Force,” BusinessWeek Online, November 5, 2008.
93
Gabriel Perna, “Zynga’s IPO Legitimizes Social Gaming,” International Business Times, July 4, 2011.
94
David Goldman, “Phrases Passes FarmVille as Facebook’s Top App,” CNN Money, November 24, 2010.
95
Mark Hachman, “Hands On: OnLive’s Cloud-Based Game Console,” PC Magazine, November 18, 2010.
96 “Games,” OnLive, http://www.onlive.com/games/featuredgames#&sortby=alpha; “PlayPack Bunde,”
OnLive, http://www.onlive.com/games/playpack#&sortby=alpha, accessed July 12, 2011.
“OnLive Everywhere: HDTVs, Blu-ray Players, Tablets and Phones—and a Sale to Celebrate,” OnLive: The
Blog, January 4, 2011, http://blog.onlive.com/2011/01/04/onlive-everywhere-hdtvs-blu-ray-players-tabletsand-phones%E2%80%94and-a-sale-to-celebrate/, accessed July 12, 2011.
97
98
“OnLive Unveils iPad/Android Tablet App that Far Outperforms New Consoles,” OnLive, June 7, 2011.
99
Juro Osawa, “Nintendo 3-D Hand-Held Misses Sales Target,” Wall Street Journal, April 26, 2011.
100 Yoree Koh, “Nintendo 3DS Slips to Sluggish Start in Japan,” Japan Real Time, The Wall Street Journal, June
15, 2011.
101
Jay Greene, “U.S. Video Game Industry Sales Continue Slide,” CNET, July 14, 2011,
http://news.cnet.com/8301-10797_3-20079621-235/u.s-video-game-industry-sales-continue-slide/ accessed July
15, 2011.
18
This document is authorized for use only by Arman Alluri in Fall 2022 MGMT 35200-005 LEC at Purdue University, 2022.