Nintendo Universal partnership

A few years back, I wrote a blog suggesting that Nintendo should consider its present status in the marketplace and team up with some of the other big guns in the entertainment and technology circuit.

The best brand in the gaming industry.
The best brand in the gaming industry.

I felt Nintendo had room to capitalize on its wonderful array of character-driven games in a variety of platforms. I’m sure Nintendo fanboys would appreciate Mario Kart on their iPads or the newest installment of Super Mario Brothers on their Samsung Galaxy 6 phones.

Nintendo should be licensing the pants out of its trove of games.

Why should it? It’s simple:

Nintendo’s brand exceeds the competition.

While I am not a gamer, and don’t plan on ever becoming one, I do have a bunch of children who play video games. What I know is that Nintendo, unequivocally, has the strongest brand in the gaming industry.

When I consider Nintendo, colorfully timeless characters pop into my mind: Mario and Luigi, and Zelda, for instance. I couldn’t, however, do the same when thinking on the Microsoft or Sony game systems. Neither comes close to the breadth of character that Nintendo’s games offer.

Nintendo’s partnership with Universal is a great first step.

I was pleased when I read that Nintendo would be partnering with Universal Parks & Resorts. It’s about time the brains at Nintendo realized joining forces will propel its brand forward. Think about it: The Nintendo Universal partnership now means you can now visit a Universal theme park and you hop on a Super Mario themed roller coaster or immerse yourself in a 4D game.

That, to me, sounds like a kick in the pants.

My hope for Nintendo is that the partnerships do not end with Universal and that we will see more and more of the cherubic, red-capped, Italian plumber named Mario in more and more aspects of our everyday media.

The Nintendo Universal partnership signals the beginning of Nintendo taking over the world.

OnLive’s brand must be about more than the technology itself

OnLive is no longer new to the world of gaming. Yet, almost three years after its release, I am still not sure the brand will be a success unless the company quickly re-evaluates its focus.

Both my interest in OnLive as well as my frustration with the brand is rooted in a desire to see it succeed. I have talked many times about the natural progression toward digital formats and OnLive alone is carrying the flag for this transition within the console gaming market.Onlive Controller

My frustration with the value of the brand is that the value has been placed too heavily on technology. The technology is impressive, but when it comes to content, OnLive is lacking.

Sony had a similar problem when it pioneered e-book readers that used the e-ink technology that is still used in some circles today. Sony may have been first but today Amazon’s Kindle easily eats Sony’s lunch in e-reader sales. In the world of e-books – and video games – content is king.

Amazon understood that. Sony didn’t.

I first tried OnLive to see if the technology worked. Did it ever. That was all I needed to be sold on the idea of a purely digital transition for the market.

But then I looked beyond its technology to the content and was disappointed.

In the video game market, brand and content are the two biggest points of differentiation. PlayStation 2 was a huge success because it commanded both. PlayStation 3 had a rocky run because it commanded neither. OnLive is new to the market and still trying to develop a brand. That won’t be easy with its content so weak.

This is not to say that OnLive is not making some smart moves. There is a push that could increase its visibility, with rumors that Sony is looking to partner with a digital game service like OnLive that would run on Sony’s PS Vita and news that it is teaming with Vizio on a new set-top box. Yet, due to its limited content library, it might be putting the cart before the horse.

Technology cannot drive preference all by itself. Technology must be driven by purpose. Content provides that purpose. As it stands, OnLive has no exclusive IPO, no big deals in the works with developers, no massive additions of current generation content to its digital library, and above all else, no brand message that defines who the its customers are and why they should prefer it.

It’s not too late. OnLive has the ability to turn this industry on its head. From how the market views content ownership and distribution of that content to how it can increase profits to developers, it really could change everything.

If OnLive fails, there will be at least one more console cycle stuck with the status quo. With or without OnLive, I believe the market will eventually make this shift. It just might take longer.

Best Buy is leaderless…So what is different?

I hate to harp on Best Buy yet again, but boy, when it rains it pours. Best Buy is leaderless and CEO Brian Dunn unexpectedly resigned due to a personal conduct investigation underway and all I could think was what a lucky break it is for Best Buy.

Not lucky in the sense that he was bad at corporate management or that he was a bad person (I guess the personal conduct investigation will clarify that). No, the only way I can evaluate Mr. Dunn is through the perspective of brand. From that perspective, Dunn was failing.

When Stealing Share rebrands companies, as much effort is put into the internal corporate culture of the brand as into the customer facing portion. If they do not occur in tandem, the customer sees the brand as hollow and fake. Before a brand can become important it must first be believed.

As I’ve said in recent blogs, Best Buy confuses its awareness with brand equity. The detriment of this confusion is that brand provides clarity and, in the absence of it, Best Buy suffered. Dunn focused too heavily on best practices and, as such, the brand of Best Buy became only as valuable as the lowest common denominator. Importance flows like a river, high to low. What a CEO believes is important becomes important at the ground floor. Brand must be the driver for the new CEO or Best Buy will continue to hit the same obstacles it is currently trying to clear.

A new CEO focused on brand also ushers in a new corporate culture. A big problem with promoting best practices (beyond their lack of meaning with the customer) is that they are not emotional and are the table stakes in which you must have just to play. But they do not create preference. They also give employees little reason to care because they are difficult to take personal ownership of.  As a cooperate culture, it is much easier to live something like “Think Different” than it is to live “best price.”

Best Buy’s Board of Directors should look at this resignation as a fresh start. Wipe the slate clean and take a new approach. Recognize that what Best Buy is missing does not center on operations, but rather on brand. Best Buy is down, but with some meaning it will not be out.

Best Buy Mobile. Not the answer

Things are not looking very good for Best Buy. Its last quarter, which ended March 3, had it down by $1.7 billion, a figure even more disheartening when you consider that the loss included an additional week of sales to help soften it. Best Buy’s answer to the poor performance is a shift toward fewer big-box locations and an increased amount of mobile locations. There is one problem with the strategy however. Whatever issues it has with the big-box stores will be the same for mobile stores. Neither has a clearly stated reason for being nor a compelling enough message to establish brand loyalty.best buy mobile

The problem with Best Buy’s current big-box stores is that you can get everything they carry elsewhere. Its brand is not special nor are the products it sells, making it just a store rather than a destination.

Sure, it has a large selection that lets you get all your electronics/appliance shopping done. But how many people go out to buy a TV and a fridge on the same outing? Typically, you either go for one or the other. (Or you go to Costco.) If you are in the market for a fridge, Best Buy just joins a long list of stores whose value is also simply “a means to an end.”

On the other hand, if you want IKEA furniture, you go to IKEA. If you want a MacBook, you go to the Apple Store. There is value in IKEA and the Apple Store because of the experience, the focus and, most of all, having brands that offer something of greater value to the consumer than price. Best Buy is not a very pleasant shopping experience. Nothing it sells is particularly special, and it uses the rather emotionless value of price as its brand.

So are mobile stores going to be any different?

The problem with transitioning to more mobile stores is that too many mobile stores exist and Best Buy’s brand of price is not meaningful enough to increase usage beyond their stores’ proximity to consumers. AT&T, Verizon, RadioShack, the list goes on. Mobile stores already saturate the market.

Best Buy’s success does not rest in adjusting the size of its stores. It rest in adjusting its brand. Downsizing the stores is just addressing a symptom. It’s not addressing the cause.

Instead, Best Buy must decide who is it for and who is it not for. What does the brand promise? Best Buy is confusing its brand awareness as being meaningful when it is preference that signifies brand equity. The reason Best Buy is closing stores, laying off employees and switching to a mobile store model is because it hasn’t redefined its brand and used that to dictate structural changes.

Otherwise, it will soon become as irrelevant as RadioShack or, gulp, Circuit City.

Best Buy Beware, GameStop is watching

Over the past year or so, retailer Best Buy has been trying to establish a presence in the used game market. The transition has not been immediate. Over time, it has established a small pre-owned section, dedicated game trade-in kiosks in the store, and a subscription-based game magazine. Best Buy has done a relatively decent job getting itself up to speed on the table stakes needed to compete, but now it needs refocus its brand if it ever wants to get an edge over the 800-pound gorilla, GameStop.

I say this primarily because of something I noticed this week. On Sunday, I was in a Best Buy and noticed a big advertisement that, for one week only, it was offering 50% additional trade-in credit for games. On Monday, I was on the other side of town and noticed, plastered on the window of a GameStop, that, wouldn’t you know it, GameStop was offering 50% trade-in credit for game trades for one week only.

A word to Best Buy, GameStop is watching and has the ability to match whatever great offer you create to get game trades through the door. The impetus for traders must come from something other then a percentage of credit. It has to also be in tandem with a brand that says why you are offering the discount and why it should be important to customers.

Best Buy’s “Thousands of Possibilities. Get Yours.” brand position had a bit of that potential, but it’s not nearly emotional enough.

The difficult part of entering into the used game business is not location, customers, or even prices. Those are problems that arise down the road. The problem before you even get on the road is inventory. You can’t sell pre-owned games if you have no stock to sell, and inventory is something GameStop has plenty of. Best Buy’s pre-owned section is small. BestBuy’s used section could fill a small single row of shelves while GameStop can fill a store.

Best Buy’s game trade effort is a lesson in confusing table stakes with a reason to choose. If price is the only deciding factor (and inventory), then GameStop will win every time. Best Buy is in desperate need of a rebrand. It needs to uncover a meaningful idea within the market and claim it. That’s the way it can beat GameStop at its own game.

GameStop’s success certainly proves there is a market for pre-owned games, but not if the switching triggers are category table stakes. Then again, my belief is that, regardless of deals, inventory, and customer loyalty, both GameStop and Best Buy will both face future challenges when the industry transitions to digital distribution.

It’s only a matter of time until that happens and only a meaningful and different brand can create preference during the transition.