Monday, March 20, 2017

Death of Simple Technology, As Told Through the Fall of Nintendo

The Death of Simple Technology, As Told Through the Fall of Nintendo The Death of Simple Technology, As Told Through the Fall of Nintendo
by Andrew Samuel
Technology has come to define how we live our lives. It constantly changes the way we talk with our friends, do business, travel, and even wake up in the morning. A large part of technology’s influence is due to its kinetic growth. Moore’s Law has accurately predicted that processing power, and thus technology, will exponentially grow every two years. With this added power, tech companies have focused on making more machines to match this new potential.

These technological changes are not only affecting perceptions of products but also brands. For example, the Galaxy has focused on appearing as the new, cool thing that is stronger than the iPhone, the same way the Mac did with Windows PCs in the 2000s. Despite this pressure to constantly innovate, some brands have continued to make simple technology, relying on brand recognition or  accessibility to weather the storm. One of the most recognized brands to do this is Nintendo, which has redefined the gaming industry time and again. However, Nintendo has done so not by making the best machines, but by making fun products. Unfortunately, Nintendo’s most recent foray into console gaming can only be described as a total flop, and its brand has deteriorated as a result.

In 2013, the video game industry made over $21 billion. Through the release of a new generation of consoles and the continued popularity of games from the previous generation, sales have grown faster than GDP, at a rate of nearly 10 percent from 2009 to 2012. As powerhouses Sony and Microsoft lead the charge into the current console war, Nintendo has struggled with the Wii U, with sales barely passing 10 million units since its launch. While some attribute the failure of the Wii U to the lack of powerfully engaging games or the prominence of consumer tablets, others blame its failure on its inability to perform in relation to the other gaming machines of the generation, such as the market leader – the PS4. As a result, the overall brand for Nintendo has suffered over the time period, lagging in comparison to Microsoft and Sony.

Figure 1 shows how Nintendo’s brand equity has changed over the life of the Wii U, in comparison to Sony’s and Microsoft’s. From 2013 to 2015, Sony and Microsoft have remained fairly consistent. However, Nintendo has fluctuated heavily in comparison, with a net drop in Brand Strength of nearly 10 points.Nintendo Power Grid In addition, Figure 2 shows that Nintendo lags behind the other two companies in Energized Differentiation, Relevance, and Esteem, only maintaining a lead in Knowledge.

Nintendo Pillars

While we must remember that Sony and Microsoft benefit from being diversified electronics companies that work outside of gaming, Nintendo’s declining brand equity is apparent in other parts of the BAV Data. When looking at the BAV’s 48 Brand Attributes, Nintendo outperforms by a wide margin when it comes to Fun, Social, and Simple; however, it loses on vital metrics such as High Quality, Leader, and High Performance. This analysis raises important questions about consumer perceptions of technology brands and their products. In the world of video games, and possibly technology as a whole, it is important to consider the value in aiming to be a fun and social brand. While it may generate a loyal consumer base and a unique industry position, which Nintendo has enjoyed for the majority of its history, brand leadership is now determined by high quality, as shown by the Playstation 4 and the Xbox One.