Prior to the launch of the Wii, Nintendo faced many challenges in the home console market. However, the Wii disrupted the market in 2006, achieving success by employing revolutionary control methods, bolstering revenues, and expanding the company's consumer base. Having lost momentum, the Wii has been superseded by Nintendo's Wii U, which further innovates gaming, but faces future challenges.
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The Wii as a product represented a shift for Nintendo, away from the traditional hardcore gamer market, and to a different space where the emphasis was on consumer expansion, rather than specifically targeting the already established hardcore gamer demographic.
Even though the Wii had only been on sale for four months before the end of Nintendo’s FY2007, revenues for the year stood at a 90% higher figure than the preceding year, while the company’s operating income was 150.2% higher in FY2007 than in FY2006, in turn boosting the company’s operating income ratio.
In recent years, Nintendo has seen its market threatened by the increased prevalence of the use of tablet computers, such as Apple’s iPad, to consume video game content. The Wii U's GamePad serves as both an innovation and reaction to the movement of casual consumers from dedicated gaming devices to tablets and smartphones.
Your key questions answered
What challenges did Nintendo face in the home console market prior to the release of the Wii?
How did Nintendo respond to challenges from competitors to take back first place in the home console market with its Wii?
How has Nintendo employed innovation, and how successful has it been in doing so?
How has Nintendo adapted its strategy going forward with the Wii U, and what factors influence its potential success?