Inefficiencies: The Nintendo Strategy

After analyzing the primary and poll results for the Democratic party, it seems as though Barack Obama has more room to expand his influence as the election draws closer. The reason is similar to the Nintendo strategy which my buddy Chris helped to identify and point out to me, and which I later profited off of.

Nintendo decided to scale back the technical specifications of the Wii and concentrate on making games accessible and fun. It ventured into the perilous world of gimmicky controllers and found the Wiimote and nunchuku. The result of this gamble is that the Wii has been sold out ever since it was released. The hand-held DS with its touch screen has sold more units than the PlayStation 2. While Microsoft and Sony are competing over a very finicky, limited hardcore gamer market, Nintendo has sought to expand the appeal of its gaming devices to include women, the elderly, and casual gamers. And it’s succeeded. Nintendo has captured the popular imagination. Whole families, retirement homes, bars, all of them want the Wii. Even the simple sports games that were included with the first Wiis are popular.

Instead of fighting over a market that is obsessed with the best graphics and biggest names, Nintendo has sought new markets at a small cost. As a result, its share price went from $15 to $80 in less than two years.

Now turn to Obama. He has unlocked the power of my generation and the generation after me. Large numbers of young people and first-time voters are supporting Obama, while Hillary Clinton’s constituency is increasingly becoming marginalized as very old voters and women who just want to see a female president.

It is highly unlikely that Clinton will gain large ground on Obama as Super Tuesday approaches. On the other hand, Obama’s victory in Iowa opened up hope that he could possibly win the presidential election, and a handful of large voting blocks have already switched over to him. People who don’t usually vote, fence-sitters, some Republicans, and a lot of intangible groups are far more likely to vote because of Obama, for Obama.

I’m predicting an Obama victory in the primaries and in the general election. I’m also, for the rest of my life, going to be scanning markets for these sorts of large opportunities. To be honest I’m surprised that more people aren’t trying to do the same. Why fight over a small piece of pie when there’s a large dormant market to appeal to?