Wednesday, December 06, 2006

Wii vs. PS3: Motley Fools Take Off Base

I think this article by Motley Fool is off the mark from what I see. This is the passage that I take issue with:

This market clearly represents a huge opportunity for Nintendo, but it also
poses a dilemma for Sony. As Christensen accurately explained in his first book,
The Innovator's Dilemma, Sony must now figure out how to create products for
this new "nonconsumption" market of first-time gamers.

I agree that this "nonconsumption market" will be big for Nintendo but only at the very beginning. Mark my words it is going to wane before too long. Nongamers don't become gamers for the most part. What I mean by gamer is one that buys multiple games per year (or sometimes per month.) A nongamer will buy a few games at first but eventually forget about the system once they get tired of it. They might go out and buy a new game later on based on word of mouth or media reports but they can't sustain the system for a number of years. More then likely the nongamers' Wiis will be collecting dust by this time next year. It might be possible to turn these nongamers into gamers but the numbers will be too small to sustain the console throughout its life. So Sony could safely ignore this fickle market and focus on the true cash cows of the industry, the gamer.

Nintendo however could keep up with the PS3 if they serve up enough exclusive fare that will make the gamer crowd stick with them instead of Sony. That means they need to crank out the Metroids, Zeldas, Mega Mans, Mario games and make them compelling for both crowds. It would be a tough balancing act because a Metroid made for the nongamer crowd will make for a lot of angry gamers. Or they need to crank out enough nongamer titles and make them compelling enough for the these people to dust off their Wiis several times a year. If Nintendo can manufacture a Sims type of game (big seller with sustainable sequels/addons) that is exclusive to their console then they will move into the top console spot.

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