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Marketing braces console launches in uncertain consumption climate

Despite concern that the Q4 launches of Nintendo's GameCube (November 18) and Microsoft's Xbox (November 15) could be hurt by the anti-violence sentiment and economic disparity that has followed in the wake of the September 11 attacks, the video game market seems ripe for the new hardware. Richard Ow, an NPD Group account exec for interactive entertainment, reports that the sector is already up 35% before the crucial holiday season, which should boost that figure to 50%. But the console heavies aren't leaving anything to chance, and marketing is a crucial element in determining which system will win at retail.
November 1, 2001

Despite concern that the Q4 launches of Nintendo’s GameCube (November 18) and Microsoft’s Xbox (November 15) could be hurt by the anti-violence sentiment and economic disparity that has followed in the wake of the September 11 attacks, the video game market seems ripe for the new hardware. Richard Ow, an NPD Group account exec for interactive entertainment, reports that the sector is already up 35% before the crucial holiday season, which should boost that figure to 50%. But the console heavies aren’t leaving anything to chance, and marketing is a crucial element in determining which system will win at retail.

Both console companies initiated costly campaigns, with Nintendo’s running at US$75 million for the three months surrounding the North American launch. The goal for Nintendo was to communicate the system’s high-tech gameplay to a broader audience than it has traditionally gone after. Nintendo has gained a rep for targeting younger gamers due to the simplistic nature of some of its cartridge-based games. However, by switching over to a disc-based system, GameCube is open to a much wider range of third-party developers, which are known for pushing the app envelope.

To reach that slightly older mid- to late-teen gamer, Nintendo decided to take a different approach to sampling than it has in the past, foregoing a truck tour in favor of a format that simulates the night club experience. Traveling to key markets until November 17, Cube Club Tour features more than 30 game stations and 20 GameCube-exclusive titles. Ten thousand GameCube stations were also set up at U.S. retail outlets like Toys ‘R’ Us, Electronics Boutique, Wal-Mart and Target in October, supported by traditional POS and other in-store signage.

On the screen front, seven different commercials have started airing across the dial during prime time and Saturday morning slots. They will have a second run in theaters this month and next before holiday blockbusters Harry Potter and the Sorcerer’s Stone and Lord of the Rings. Print media started this month, with eight ads appearing in pubs like SI for Kids and men’s magazines that have healthy teen readerships like Maxim and Stuff.

The dominant component of a September-launched web campaign on Nintendogamecube.com asked surfers of all ages to what lengths they would go in order to get a GameCube before anyone else. At press time, five finalists for the ‘What would you do for a Nintendo GameCube?’ contest had been selected from 17,000 entries. Lizzy from Arizona reports: ‘I would eat a GameCube-sized replica made of uncooked Spam, cat food and chocolate syrup.’ At press time, the winner was scheduled to be flown to San Francisco on November 1 to perform his or her stunt.

In a campaign that started October 1 and runs through to March 31, 2002, Nintendo of Canada teamed up with Kraft Foods for on-pack game giveaways on products like Kraft Dinner, Kraft Singles, Cheese Whiz, Jell-O and Oscar Mayer’s Lunchables.

With a wider scope in mind, Microsoft’s budget ran over US$500 million for an eight- to 13-month worldwide initiative. As the rookie in the video game world, the key for Xbox is to change the way people look at gaming. Xbox game titles and box capability probably appeal more to hard-core gamers or new console buyers, a target pegged between the ages of 16 and 26. Ryan Mugford, marketing lead for Xbox Canada, says the company conducted over 1,600 focus groups on a global scale–including both gamers and developers–to find out what they were looking for as the next step in gaming. Graphics were key, along with game variety and multi-player and broadband capabilities. Another unexpected element that came up frequently in group discussions was sound. ‘Traditionally sound has been…not an afterthought exactly,’ says Mugford, ‘but certainly not as developed as the other components.’

Staying true to consumer demand, music and sound are at the heart of the marketing effort for the system in Canada. Universal Music and EMI Music have created Xbox Soundtrack 1, a two-CD set with artists featured in Xbox launch games, including headliners like Crystal Method, Chemical Brothers and Fat Boy Slim.

As far as software content goes, Xbox experienced a bit of a setback, having to fiddle with subject matter that could be received badly by a sensitive, post-attack consumer base. James Bernard, Xbox marketing manager and spokesperson, says Project Gotham Racing, a racing simulator that featured the twin towers in the background, needed particularly heavy tweaking. However, all signs suggest that folks who were planning on buying the consoles before September 11 still plan to do so.

In terms of presales, Toys ‘R’ Us announced in early October that GameCube orders sold out in four minutes, and Xbox sold out in half an hour. Both Xbox and Nintendo have been careful to avoid the undersupply problems that plagued the PS2 launch last year by shying away from making hard delivery promises. Microsoft will only specify that approximately 1.5 million Xbox units will ship through the holiday season, with 100,000 new units per week shipped out after the launch. Nintendo reports that 1.1 million systems will be in stores by the end of the year.

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