Nintendo red dress

Roughly two years ago, The Guardian wrote this short article titled “Why Tech Advertisers Should Target Women”. The article reported a study released by YouGov and Lady Geek which claimed that women were buying more technology than men. But there was one line in the article that really caught my eye, and it made me think deeper about the gaming industry.

According to the study, “…a man’s influence on household technology declines after 35 – around the time when he stops buying toys for himself and starts thinking about his family. For a woman, the opposite happens, with her influence increasing at that age.”

This year, the Entertainment Software Association reported that the average age of the most frequent game purchaser is 35 years old and the average game player is 31 years old.  In other words, the average gamer is reaching the age of when a man’s influence over technology purchases (like game consoles) will slowly decline. Last month, the NPD reported that the ‘core gamer’ population had declined from last year’s 37.5 million core gamers to 34 million this year.

I’ve been thinking about how this relates to Nintendo.

From the NES through the GameCube, Nintendo’s core audience was mostly young males and children. Each console generation for Nintendo saw a decline in install base and market share. It wasn’t until the Wii and DS — products that were popular with women — when Nintendo would finally reverse this declining trend. The Wii and DS would go on to become Nintendo’s most successful products in the company’s history.

In the past, young males would buy Nintendo consoles for Nintendo games, and then they would purchase another console for third party titles.  But as young men grow older and start their own families, many of them will have less time for video games, and they may stick to just one videogame console — the one with the best third party support. The problem is Nintendo has always relied on the nostalgia of people who remember the “good ole days” to buy future hardware.  The most loyal Nintendo fans are not the kids who grew up on GameCube or Wii.  The most loyals fans – the ones who follow news on everything Nintendo does – are the ones who grew up on NES, SNES, and even the Nintendo 64.  Recent games such as “Nintendo Land” and “NES Remix” are all about tugging on those nostalgic heart strings.

Yes, there will always be a new generation of 8-year-olds introduced to Nintendo’s products, but children in 2014 have more options for entertainment than the children in the 90′s and early 2000′s. Nintendo faces many challenges when it comes to children, and they need to accept the fact that they aren’t the only company seriously targeting children.

The idea of three companies convincing twenty-something males to buy $300-$400 machines is a recipe for disaster, but Nintendo’s strategy of marketing to small children hasn’t proven to be very successful either. Last yeah, Microsoft reported that 51% of Xbox Live subscribers have children. Instead of advertising Xbox consoles directly to kids like Nintendo does, kids become familiarized with the Xbox brand through their parents. All of these “hardcore gamers” — the audience for Xbox consoles — are now reaching the ages of becoming fathers. Microsoft doesn’t need to spend significant amounts of money marketing to children when they can build Xbox’s kids audience indirectly through their gaming parents.

So, who should Nintendo focus on targeting?

Young adult women — not small children or grandmas — are the key to Nintendo’s future success.  The Entertainment Software Association says women age 18 or older (36%) represent a significantly greater portion of the game-playing population than boys 18 or younger (17%). This is why I believe that Nintendo should play their cards right, focus less on twelve year old boys, and focus more on young adult women. In 2013, the ESA reported that 48% of the most frequent purchasers of games are female, and adult women make up 31% of the game-playing population.

Flieshman-Hillard Inc. believes that women will control two-thirds of the consumer wealth in the U.S. over the next decade. Nielsen predicts that the average woman will earn more money than the average man by the year 2028. In the United States, women control 60% of personal wealth, 80% of consumer spending, and 85% of all consumer purchases. When it comes to technology, Bloomberg says women make up 66% of all computer purchases.

Whenever I speak to Nintendo employees, the one thing that is constantly brought up is women.  They believe that woman will decide whether Nintendo’s future hardware succeeds or fails.  Now, some of you might say, “Isn’t that a bit over dramatic to say women will decide this?”  The problem is Nintendo is struggling to reach the 16-27 year old male demographic, and there is a belief inside the company that targeting females is the best way to compensate for that.  You are already seeing it with Nintendo UK using the “Nintendo Girls Club” to reach out to young girls.  The Quality of Life plan from Satoru Iwata is all about bringing more women into Nintendo’s ecosystem of hardware. The reason why Tomodachi Life is coming to North America is because of Animal Crossing: New Leaf’s popularity with women.

I personally believe that the reason 3DS turned itself around (after launch) was because it was aggressively marketed to women. In September 2011, Nintendo CEO Satoru Iwata announced that his revival plan to save the 3DS was to do a better job at targeting women. “The balance between male and female customers has been a strength of Nintendo, but the 3DS has not had a high number of women players in comparison to the DS,” said Satoru Iwata. One month later, Satoru Iwata explained that the misty pink Nintendo 3DS and the release of “Nintendogs + Cats” helped bring in more females to the Nintendo 3DS.  Nintendo said the Misty Pink 3DS was picked up more than 75% by girls. Another 3DS title that proved to be successful with women was “Professor Layton and the Miracle Mask”.

The Mario Kart series has always been very popular with women, and the release of “Mario Kart 7” helped turn around the 3DS’s struggles.  By 2012, Nintendo launched the “I’m not a gamer” campaign featuring famous female celebrities playing games such as “Art Academy”, “Professor Layton”, “Style Savvy Trendsetter”, “Crosswords”, and other titles aimed at this demographic.

Nintendo’s stock hit a two-year high thanks to western sales of “Animal Crossing New Life” which boosted 3DS hardware sales to 225,000 in June 2013.  The Nintendo 3DS became the best-selling system in the country for the second consecutive month thanks to Animal Crossing.  During the first three weeks of release in Japan, 56% of customers who bought the game with a new 3DS console were female and ages 19-24 years old.

girls_wii

We are constantly told that the expanded audience from the Wii/DS days has moved on to mobile devices, and they are never coming back to Nintendo. Many analysts believe that Nintendo would generate millions of dollars from mobile gaming, but who is responsible for most of mobile’s digital revenue?

Research by eDigitalResearch and IMRG says that 58% of smartphones are owned by women. Furthermore, women install 40% more apps than men, purchase 17% more paid apps, and pay 87% more money for those apps. This is according to data that was released in 2013 by Apsalar, a mobile analytics and advertising company.

Don’t ask how Nintendo can persuade mobile audiences to purchase Nintendo hardware.  Instead, ask how Nintendo can make their hardware more appealing to women. Last year, EEDAR reported that nearly 60% of all mobile gamers are women. This year, social gaming network PlayPhone discovered that 68% of mobile gamers are women.

Satoru Iwata explained,“You often hear today that because smartphones exist, there’s no need for dedicated gaming machines. But, this 19- to 24-year-old female demographic, they’re the smartphone people, right? It’s often said that female casual gamers don’t need dedicated hardware, and yet here they are reaffirming the value of these machines.”

Mobile gaming is less about casual gamers and more about women. Investors want Nintendo to make millions of dollars from women again like the DS and Wii. When people claim that the “casual audience” isn’t coming back, what they are really saying is that Wii’s expanded audience were mostly women, and most women are never coming back to Nintendo. I would have to respectfully disagree with this opinion.

In mid-2013 — six months after Wii U launched — Compete reported that 54% of people who visited Nintendo websites were female, and 46% of visitors were men.  They also discovered that 4% more females were surfing Nintendo sites in 2013 than 2012. That means more women were surfing Nintendo websites after Wii U launched than before launch. The report claimed that Nintendo sites still attract more female visits than both PlayStation and Xbox websites.

Women are still interested to read about Nintendo’s products on the internet, but most of them are still waiting for a reason to purchase the Wii U.  The Wii U’s sluggish sales performance doesn’t mean Nintendo can’t win over women with future products. Most women might not be lining up to buy Wii U, but they are still very interested in the Nintendo brand.

But what about the women who do own a Wii U?

There are more women who choose Wii U as their favorite game console than men. In January 2014, Valued Opinions asked 10,146 people what their favorite game console is. They found that 13% of women chose Wii U as their favorite console, compared to 8% of men.

just dance girls

Before E3 2011, IGN reported on a national survey which measured the overall interest in a “Wii 2”. They discovered that purchase intent for women was 8% higher than it was for men.  You heard that correctly. Women were more interested in a next generation Nintendo console than men. This shouldn’t be surprising since Nintendo president Satoru Iwata explained that 50 percent of Nintendo’s users for Wii and DS were female. During the year that Wii U launched, Nintendo president Satoru Iwata told investors, “Nintendo platforms have almost the same number of female users as male users, which is extremely rare in the gaming industry. In cases of other companies’ platforms, the user proportion between males and females is about 70:30, or something like 75% : 25%.”

Now, it would make sense for Wii U’s reveal in 2011 to focus more attention on that growing female audience. Women were more excited for a next-gen Wii than men, and women were the demographic that helped give Nintendo a competitive advantage over Sony and Microsoft. Ubisoft senior brand manager Ann Hamilton called Wii the first console successfully marketed to the female demographic. “What’s driving the Wii sales is the use of Wii by women, girls and families,” Hamilton said. “It’s a really female-driven platform.”

But guess what happened instead?  Nintendo’s E3 2011 presentation was mostly aimed at hardcore, young adult males who were preferred Xbox and PlayStation over Wii.

BioShock creator Ken Levine told us that Nintendo had finally heard the voices of the hardcore gamer. Electronic Arts asked us to imagine Battlefield 4 on the Wii U with “jaw dropping graphics” with amazing online multiplayer. Ubisoft held an event at E3 2011 to demonstrate “Killer Freaks From Outer Space” and “Ghost Recon Online”. We were told that shooters and realistic racing games like “Metro Last Light” and “Dirt” were coming to the Wii U, and we saw multiple trailers promising ports of popular franchises like Assassin’s Creed, Darksiders, Madden, and Tekken.

During that E3 2011 presentation, they spent only a few minutes showing a woman stepping on a Wii Fit U balance board and swinging a remote like a golf club.

This was a huge mistake.  If most women wanted a PlayStation or Xbox, then they would have bought one of those two consoles. There is a reason why 80% of women preferred Wii over PS3 and Xbox 360 in 2009.

At E3 2012, the company even admitted that most of Wii U’s launch games were aimed at young male audiences. When a reporter asked how the company would maintain Wii’s 50% female audience with Wii U, Iwata reminded us that the Wii U has video stream services like Netflix, Hulu, and Nintendo TVii.

Iwata explained, “A number of the videogame genres will be for male audiences, and the male audiences will increase, but on the other hand, this device is capable of many other things. On this device you can see video streams of Netflix, or you can use in conjunction with the TV. Regardless of the gender, you may want to use it … Our hope is it will be equal number of males and females who will be interested in this device.”.

The company’s obsession with winning over the hardcore, pre-dominantly male Xbox audience backfired on Wii U’s launch. They wasted too much time, money, and energy trying to attract an audience that didn’t give a damn about anything Nintendo had to offer. Nintendo could have shown Grand Theft Auto 5 and Metal Gear Solid 5 for Wii U, and this audience still wouldn’t see any value in the system. Nintendo could have released a more powerful console, but most hardcore gamers would still wait one more year for the next Xbox or PlayStation due to brand loyalty. The Wii U GamePad was nicknamed the “Swiss army knife” of game controllers because it was designed for hardcore gamers. Unfortunately, hardcore gamers didn’t see the appeal of a controller designed for the hardcore, and now, Nintendo has their eyes set on new blue ocean markets.

The next E3 (2012) dedicated time to ZombiU and Batman Arkham City for the Wii U.  Satoru Iwata seemed very confident that ZombiU — an M-rated Wii U exclusive — was going to be a huge seller all around the world because it took advantage of the GamePad’s features. They even bundled ZombiU with the console to attract the Xbox audience, but they still didn’t see a significant bump in the sales from young males.

“I get the feeling that ZombiU will become the focus of attention, not just in Europe, but around the world including Japan,” explained Nintendo president Satoru Iwata. “I look forward to ZombiU becoming a seminal title, complimenting Nintendo’s own efforts to showcase the reason why Wii U had to have the Wii U GamePad as its controller by demonstrating yet another way of doing things.”

At the September 2012 Wii U event, Activison executives demonstrated Call of Duty on the Wii U GamePad, but this didn’t convert any PlayStation and Xbox gamers to the Wii U. Sega’s “Alien Colonial Marines” was shown at two E3 events in a row, but this awful game was still never released on the Wii U.  Nintendo published Ninja Gaiden 3: Razor’s Edge — an enhanced port of a critically panned game — which was basically sent out to die on Wii U. Satoru Iwata hosted a “Sega Direct” in Japan to promote “Yakuza 1 & 2 HD”, but the game ended up selling less than 2,000 copies in it’s debut week.  The company bundled Monster Hunter 3G with the Wii U in Japan, but there weren’t many hardcore gamers biting on this deal. Skip ahead to January 2013 where Nintendo revealed a big, beautiful, Japanese role-playing game developed by Monolithsoft. When “X” was revealed, guess what the reaction was from Xbox and PlayStation owners?  They looked at it and said, “Meh…it looks like anime.”  (I’m joking with that last line, but you get the point that some audiences are difficult to please.)

None of these announcements helped Wii U score points with most PlayStation and Xbox owners, and Nintendo lost a large chunk of their female audience in the process. Earlier this year, Nintendo CEO Satoru Iwata told reporters that the company’s biggest mistake was not focusing enough on children. He’s correct because they spent a ridiculous amount of money trying to attract the PlayStation and Xbox audience — and it didn’t work out. 

wii banner

Nintendo has three choices for their next generation hardware after Wii U and 3DS.

Plan A: Compete for the 20-something male demographic that is targeted by Xbox and PlayStation.

  • Result: Three giant companies fighting for the same audience means Nintendo loses.  Microsoft and Sony are willing to spend more money than Nintendo on third party support and marketing.  There is no way that Nintendo will come out as a winner if they compete for this audience.  Nintendo is too conservative to get into a giant spending war against Microsoft and Sony.

Plan B: Market your hardware as devices for children and families.

  • Result: This type of marketing repels ten year olds away from Nintendo’s products. Children always want to feel older than their actual age, and there is always peer pressure in grade school to act “cool”. Kids don’t want to feel like they own the “kids machine”. They want to own the game console that all of the teenagers and adults are currently playing.  Kids were attracted to the Wii because the marketing showed how popular it was with teens and adults.  There’s a significant amount of evidence that says parents don’t spend a ton of time with their kids because they are always working.  When parents do spend time with their kids, they don’t view video games as a valuable way to spend family time because kids look at screens all day anyways.

Plan C: Focus attention on young women since no other company is aggressively focusing on them.

  • Result: The Correct Plan — There is still very little competition in the console market for young women.  The Wii U’s poor sales performance doesn’t mean Nintendo can’t win over women with future products.
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