Nintendo is planning to boost its global advertising budget by Y10bn ($85m) in a bid to give its Wii games console a decisive early lead over Sony’s newly launched PlayStation3.
The move by Nintendo, which expects to spend Y68bn as a group this year, is a further signal of what industry observers predict could be the most expensive console war ever fought.
The planned media blitz in Nintendo’s domestic market will involve 10 different television advertisements for the Wii, the hiring of vast conference halls for “Wii Experience” shows for the public, and the setting up of expensive demonstration booths at retailers throughout the country.
Analysts said that Sony’s limited launch inventories of 80,000 PS3 consoles represented a significant opportunity for Nintendo, which was ready to hit the Japanese market with a launch stock of 400,000 units.
KBC Equities games analyst Hiroshi Kamide said Nintendo’s campaign meant Nintendo had “a chance to put its machines in customers’ hands far more quickly than Sony can at this stage.”
Nintendo’s 20 per cent increase in its advertising budget was an attempt to avoid repeating bad experiences in the past, analysts said.
Nintendo’s previous console, the GameCube, was launched in 2001 to compete with the PlayStation2 but sold less than a fifth as many units.
The campaign has yielded some good early results. Last weekend, more than 18,000 people attended a Wii show in the city of Osaka with fans queueing for more than four hours for a 10-minute turn on “Legend of Zelda” – a game tipped to help drive initial sales of the hardware.
Nintendo said that the sharp jump in marketing budget was also due to the wider range of customers that the Wii is aimed at. Previous Nintendo consoles have been squarely aimed at younger gamers. But following the success of its handheld DS console in attracting middle-aged enthusiasts, Nintendo is pitching the Wii at the whole family, and accordingly buying expensive TV advertising slots in evening prime-time.
Some analysts believe, however, that despite expensive marketing campaigns, the Wii console may ultimately struggle. While Nintendo is busy pitching its machine at a wide age group, the PS3 has already established its technological dominance with more serious gamers.
Nicholas Spratt, an analysts at Lehman Brothers, said Nintendo faced a “significant risk” by capitulating in the competition for the highest specification console – a move that may drive third-party games makers onto the PS3 or Microsoft’s Xbox 360.
