I was wrong about the Wii. It is a great console. It will be the market leader this season – probably not in 2007, though – simply because it is on a different console trajectory than the 360 or the PS3. It is small, cheap, and available. Kids will “settle” for it when they can’t get the PS3 and that will drive Nintendo into a strong fourth quarter.
That said, the New Yorker’s inimitable James “Economist With Mad Flava” Surowiecki drives this point home with his nice study of market leaders in many industries. The best quote:
The point is that business is not a sporting event. Victory for one company doesn’t mean defeat for everyone else. Markets today are so big—the global video-game market is now close to thirty billion dollars—that companies can profit even when they’re not on top, as long as they aren’t desperately trying to get there. The key is to play to your strengths while recognizing your limitations. Nintendo knew that it could not compete with Microsoft and Sony in the quest to build the ultimate home-entertainment device. So it decided, with the Wii, to play a different game entirely.
They made a compelling, family-oriented game system with downloadable content, backwards compatibility, and an amazing user interface. Let Sony and Microsoft finish this cockfight, they’re essentially saying, we’re standing on our strengths. Good on ya, Nintendo.