Wii Are Family

"Nintendo's for kids," people always tell me. "It's the Playskool of video games."

Yet the system that brought us Super Mario Bros. and the Legend of Zelda continues to kick ass.

Just as interesting as how Nintendo has changed the gaming world, however, has been its business approach. Nintendo sells games along the time-honored razor-razor blade model, namely pushing out the console and then enticing users to buy more games.

"More casual players aren't as likely to be attracted by hardware features, so it's all about delivering a fun, easy-to-use and addicting game experience," says Anita Frazier, toy and video game analyst at NPD Group.

Another factor in enticing those casual users is keeping its console cheap. "The key thing about Nintendo is they want their things to be at price points that anyone can respond to," says Hiroshi Kamide, director of research at KBC Securities Japan. Nintendo's strategy is to buy inexpensive components instead of making them in-house, allowing the Wii to sell for $260 while the PS3 costs $300.

But here's the winning point: Unlike its competitors, Nintendo has figured out how to make money from its console sales. Sony loses money on each Playstation sold. Microsoft might just break even. But every Wii brings in $6 of operating profit for Nintendo, says David Gibson, an analyst at Macquarie Securities.


Everytime these guys would put out a console with very little games, I'd think, "WTF? They're gonna get creamed." I thought that when they fought Sega. I thought that when they fought Neo Geo. I thought that when they were up against hand-helds like Tiger. Guess what those systems all have in common?

As long as a good percentage of Nintendo games are made by Nintendo, they can keep the loyalist and wrangle in newbies. Nintendo's philosophy has been a altered version of that Cyndi Lauper song: Kids Just Wanna Have Fun. Everything they do, everything they've done...has been geared toward that. Now? They're expanded that demographic to read "families."

In short, Nintendo has created a video game system that can keep you physically active and be fun for mom, dad and the kids. And when compared to it's competition, it's relatively inexpensive.

Yet once again, there's doubt in the face of Xbox and Playstation. When will people learn?

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