Segmentation and Targeting in the Video Game Console Industry

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Segmentation, Targeting and Positioning in the Videogame Console Industry Microsoft Xbox 360 Kinect vs. Sony Playstation 3 Move vs. Nintendo Wii

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2 FREE TEACHING RESOURCES ON MARKETING MANAGEMENT at www.smathur.com/teaching.php Over 100,000 views by M anagement Students and Business Professionals from over 74 different countries These presentations are part of Sameer Mathur's teaching portfolio. They are free to view or download for non-profit, academic use. Disclaimer: These teaching materials have been compiled from multiple, non-credited sources for non-profit, academic use. Copyright is retained by the original content creators. Sameer Mathur , Ph.D . Assistant Professor (Marketing) Web: www.smathur.com Email : sameer.mathur@mcgill.ca Twitter: @ProfessorMathur Facebook: Click Here

Agenda:

Agenda Historical Context Current-Generation Consoles Introducing the Kinect + Introducing the Competitors Segmentation / Positioning Analysis Perceptual Map / Trends Suggestions for Repositioning the Wii

Historical Context:

Historical Context Seven generations of home video game consoles since 1972

Sixth Generation (1998 – 2004):

Sixth Generation (1998 – 2004)

Seventh Generation (2005 - Now):

Seventh Generation (2005 - Now)

Comparison of Sales, Year-by-Year:

Comparison of Sales, Year-by-Year

Gaming Market Trends (US):

Gaming Market Trends (US)

Microsoft’s Response::

Microsoft’s Response: Demonstration Video

Kinect Details:

Kinect Details Product: A “controller-free gaming and entertainment experience ” - Xbox 360 add-on Price: $299 bundle w/ Xbox 360 $150 for controller alone Release Date: November, 2010

Competitor #1::

Competitor #1: Price: $199 bundle

Competitor #2: PlayStation Move:

Competitor #2: PlayStation Move Product: A Wii-like motion controller add-on for the PlayStation 3 Released: September 17, 2010 Price: $399 bundle w/ PS3 $99 for existing PS3 users

Segmentation:

Segmentation “What are the consumer segments targeted by these three brands ?” – Wii , Kinect , Move

Market Segmentation:

Market Segmentation Geographic Demographic: Psychographic Behavioural :

Approaches to Positioning:

Approaches to Positioning Head-to-head positioning Differentiation positioning

Segmentation & Targeting: Wii:

Segmentation & Targeting: Wii Released: 2006

Segmentation & Targeting: Wii:

Segmentation & Targeting: Wii 2006: “Our focus is interactive game play, a whole new way to play, that puts fun back into this business. It allows everybody to pick up and play and isn't focused on the core gamer” – President, Nintendo US

Segmentation & Targeting: Wii:

Segmentation & Targeting: Wii 2006: “… In the end, prettier pictures will not bring new gamers and casual gamers into this industry. It has to be about the ability to pick up a controller, not be intimidated, and have fun immediately” – President, Nintendo US

Targeting: Wii:

Targeting: Wii 2006: Nintendo chose differentiation positioning Expansionary strategy Target “casual/non- gamers” Segmentation: Behavioural Demographic Psychographic

Wii Targeting - Behavioural:

Wii Targeting - Behavioural Benefits sought Usage rate User status

Wii Targeting - Demographic:

Wii Targeting - Demographic Gender Age Family Status

Wii Targeting - Psychographic:

Wii Targeting - Psychographic Lifestyle Personality

Positioning: Wii:

Positioning: Wii 2006: “Wii would like to play”

Top 10 Games: Xbox 360 (2010):

Top 10 Games: Xbox 360 (2010)

Top 10 Games: PlayStation 3 (2010):

Top 10 Games: PlayStation 3 (2010)

Top 10 Games: Wii (2010):

Top 10 Games: Wii (2010)

Wii Positioning Results :

Wii Positioning Results Best-selling console of the 7 th generation thus far Female users outnumber overall male users Wii has particularly high levels of appeal to boys 6-11, women above 35

Choice of Female “Primary Players” (US):

Choice of Female “Primary Players” (US) "This didn't happen by accident .. It's the result of a deliberate attempt to expand the market“ – President, Nintendo US

Segmentation & Targeting: Kinect:

Segmentation & Targeting: Kinect

Slide 30:

“Easy to use and instantly fun, Kinect … gets everyone off the couch. Want to join a friend in the fun? Simply jump in .”

Kinect Flagship Games:

Kinect Flagship Games

Segmentation & Targeting: Kinect:

Segmentation & Targeting: Kinect Kinect looks positioned to go head-to-head with Wii Segmentation: Behavioural Demographic Psychographic

Kinect Targeting: Behavioural:

Kinect Targeting: Behavioural Benefits sought Usage rate User status

Kinect Targeting: Demographic:

Kinect Targeting: Demographic Gender Age Family Status

Kinect Targeting: Psychographic:

Kinect Targeting: Psychographic Lifestyle Personality

Segmentation & Targeting: Move:

Segmentation & Targeting: Move

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“PlayStation Move takes family ‘Games Night’ to a whole new level. … Enjoy hours of fun with top-tier games for the core gamer in your family [and] party and sports titles for the kid in all of us”

PS Move: Selection of Games:

PS Move: Selection of Games

Segmentation & Targeting: Move:

Segmentation & Targeting: Move PS Move is using differentiating positioning Flexible game selection – casual & hardcore games A motion controller for “real games” “It only does everything ” Segmentation : Psychographic Behavioural Demographic

Move Targeting: Psychographic:

Move Targeting: Psychographic Lifestyle Personality “Move into the Action”

Move Targeting: Behavioural:

Move Targeting: Behavioural Benefits sought Usage rate User status

Move Targeting: Demographic:

Move Targeting: Demographic Family Status

Summary:

Summary Wii and Kinect : head-to-head competition targeting casual gamers Move : differentiation strategy with focus on flexibility Targeting casual & hardcore gamers

Positioning:

Positioning What is the positioning for each brands on a perceptual map? Are there any trends favour one brand over the other ?

Perceptual Map: :

Perceptual Map: Inexpensive Expensive Casual / Family Game Oriented Hardcore Game Oriented

Primary Trends Affecting Brands:

Primary Trends Affecting Brands Price sensitivity Casual gamers very price sensitive (The Economist) Current economic climate Activision CEO: “ Kinect’s price must come down” Favours Wii ($199) Vs. Kinect ($299) Vs. Move ($399)

Repositioning the Wii?:

Repositioning the Wii?

Repositioning the Wii:

Repositioning the Wii No re-positioning Change marketing only slightly in response to Kinect

Emphasise Social Aspects:

Emphasise Social Aspects Emphasise that four players can play at once Vs. Kinect – only 2 at once

Emphasise Simplicity:

Emphasise Simplicity Emphasise simple, quick, uncomplicated fun No complicated graphics, gestures, controls Just “make your Mii ” and play

Emphasise Value:

Emphasise Value Most important: Emphasise the price of the Wii $199 vs. $299/$399 Potential price cut in 2011 to $149

Repositioning the Wii - Conclusion:

Repositioning the Wii - Conclusion Emphasise simplicity, social aspects, and especially value Attributes important when going head-to-head Maintain brand loyalty among core target audiences

Slide 53:

53 Sameer Mathur , Ph.D . Assistant Professor (Marketing) Web: www.smathur.com Email : sameer.mathur@mcgill.ca Twitter: @ProfessorMathur Facebook: Click Here RELATED SLIDES CLICK BELOW TO LEARN ABOUT: 1. Consumer Decision Process 2. New Product Development POPULAR SLIDES CLICK BELOW TO LEARN ABOUT: 1. Segmentation and Targeting 2. Positioning, Perceptual Maps

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54 FREE TEACHING RESOURCES ON MARKETING MANAGEMENT at www.smathur.com/teaching.php Over 100,000 views by Management students and business professionals from over 74 different countries These presentations are part of Sameer Mathur's teaching portfolio. They are free to view or download for non-profit, academic use. Disclaimer: These teaching materials have been compiled from multiple, non-credited sources for non-profit, academic use. Copyright is retained by the original content creators. Sameer Mathur , Ph.D . Assistant Professor (Marketing) Web: www.smathur.com Email : sameer.mathur@mcgill.ca Twitter: @ProfessorMathur Facebook: Click Here