Nintendo Video Game Revolution Threat

Nintendo Video Game Revolution

Threat of Substitutes

Under Porter's Five Forces model the threat of substitutes is when competing products are introduced that will have an impact on the industry. ("Porter Five Forces Analysis," n.d.) in the case of the Nintendo Wii, they face the possibility of substitutes entering the market from one of two sources: Microsoft and Sony. This is because Wii is using various motion gaming technology to create a unique experience. However, during the last two years, both Microsoft and Sony have vowed to create alternative products that can compete against Wii. This means that the threat of new substitutes entering the market is high. (Eaton, 2009)

As Microsoft, has been working on their own device that is using similar kinds of technology. A good example of this can be seen with the new programs and tools for the X Box 360 called Natal. This is an interactive program that can be uploaded on the X Box 360. What makes it so unique, is that it has a number of different features to include: a camera-based vision system, an IR sensor and a microphone. These three elements help to improve the overall experience of the user. As this technology can identify; the slightest changes in the body such as: facial recognition and the movement of your hands. At the same time, it can customize these setting to your X Box profile. These features are more advance than those that are offered on the Wii, as the device only tracks motion (not the movement of specific body parts). This is important, because it highlights the overall threat of this technology to the Wii. As many consumers could believe that this is a better value due to: the unique applications and how it is more precise in tracking your movements. (Eaton, 2009)

In the case of Sony, they have taken a different approach that could have a similar impact upon Wii (the Playstation Eye). This is a device that gives users a three dimensional view of the game and accuracy. As the overall experience that user is having is improving dramatically, by adding that sense of realism. A good example of this can be seen with game Lord of the Rings, where this technology has dramatically improved the experience and quality of the application. This is a different approach in comparison Nintendo, with Sony focusing on improving the overall amounts of realism on the PS3. As a result, the Playstation Eye is a possible substitute that could have an impact on the Wii. However, since it does not have similar motion features means that this is more of a distant threat that is being faced. (Eaton, 2009)

When you analyze the overall threat of substitutes that could be affecting the Nintendo Wii, it is clear that Microsoft's Natal is biggest. This is because the technology that it uses and the way it can interact with other features are superior to those on the Wii. Where, Natal can perform various functions that are not possible, causing some consumers to see this product as a better value. Once this occurs, it means that a shift could take place in the market. As a result, Nintendo needs to remain focused on this threat. (Eaton, 2009)