So, did you ever hear about the groundbreaking phone from Nokia called the N-Gage? No?
For many years now, there's been an awful lot of money in the mobile video gaming industry. In 2004, there was somewhere around $600,000,000 to be made in that market, and it was expected to grow to over $4,000,000,000 within the next few years. That was a lot of money attached to a huge opportunity, but surprisingly only one company was really competing for it. The mobile gaming industry was monopolized by Nintendo for years, as their Game Boy and Game Boy Advance line of products had clearly dominated the market. Kids loved Game Boys, parents were growing an attachment to Game Boys, young professionals were discovering Game Boys... everybody seemed to enjoy getting their quick fix of Tetris or Mario. So if I was a businessman in the technology sector, I'd be looking at that four billion dollars and thinking to myself: how can I get a piece of that pie?
One company had the vision to take a swing at it. Enter Nokia, best known for their U.S. market leadership in another related area: mobile phones. The N-Gage was the brainchild of their marketing department, and a brilliant idea in and of itself. No doubt, Nokia hoped to capitalize on the brand loyalty so many of us felt for our Nokia phones. The N-Gage was an admittedly cool-looking little gizmo that is both a cell phone and a handheld video-game player. And we’re not talking simple little video games like Snake (although everyone seems to love Snake, I never heard of any plans to bring it to the N-Gage), we’re talking titles like Sonic the Hedgehog and Tomb Raider, if those two names mean anything to you. The N-Gage was meant to break into the lucrative professional, casual gamer market, and it was meant to be more friendly to females than the somewhat-gender-specific Game Boy. Sounds like a pretty good idea, right? (It should - it's exactly what Nintendo did a bit later with their grown-up-friendly Nintendo DS!)
 It was a good idea, and it is a good idea: leverage your strength in one market to attempt to compete in another related market. It’s how Microsoft got into the Internet, Britney got into the movies, and how Disney got into... well... just about everything. However, even the best of plans can fall through, and the Nokia N-Gage became one of the biggest hyped technology failures of the twenty-first century. The phone received terrible reviews from both mobile phone reviewers and video game reviewers. Sales were reportedly lukewarm, and in a move that’s a clear indicator of how retailers felt about the product, major sales channels like GameStop and Electronics Boutique slashed the price of N-Gage by a hundred bucks just two weeks after the phone/game’s launch. If two of your biggest retailers see a need to cut the price of your product by a third within a month of its release, then you’ve got huge problems.
However, I stand by my first statement of the last paragraph: combining mobile phones with games through the established market leader really was a good idea. Unfortunately for Nokia, the launch of the N-Gage was so poorly planned and disastrously executed that it would be completely unreasonable to expect the new gadget to succeed. The good news for us, though, is that there are several lessons we can learn from it about how to launch a new product in a competitive field. Here, then, are some simple rules on how NOT to launch a new product, service, or idea, as taught to us by the good folks at Nokia (who make darn nice phones, really):
Develop a product that is obviously inferior to its competition. Nintendo’s Game Boy, which had sold over 150 million units in the 15 years or so prior to Nokia's launch, had a significantly bigger screen than a Nokia N-Gage. The Game Boy also showed a much larger variety of colors on its screen than the N-Gage. And the Game Boy has much better battery life than the N-Gage. That may sound like no big deal to a lot of us, but to the gamers who were expected to buy the N-Gage, those three facts are big no-no’s. On the mobile phone side of the N-Gage, actual phone reception is weak compared to regular phones, and again, battery life is relatively inferior. Combining two products into one useful gadget is a great idea, but only if you can maintain a certain level of quality. Most people would rather carry a good phone and a good game device, than carry one combination device that doesn’t do a good job of either.
Charge far more than your competition. Over the Christmas season that year, I found a neat Game Boy Advance gaming device on sale for $69.99, and I found good mobile phones for free at almost all of the major cell-phone providers. The Nokia N-Gage, on the other hand, cost anywhere from $200-$300. Nokia stated at the time that it believed customers would be willing to pay more for the convenience of having phones and games together; consumers responded by disagreeing. If you’re launching a new product and your product is over twice as expensive as your competitor without offering any real quality advantage, you’re going to fail.
 Ignore the experts. Speaking of pricing, in a 2004 interview a Nintendo executive said of the mobile gaming industry, “Mainly, we find that when you go over $99, it's a hard thing to sell.” Meanwhile, the success of Nokia’s regular mobile phone division had been dependent on several factors but none more so than low pricing and a simple handheld design with high ease-of-use. The major video game websites were looking for devices with large screens and an easy method of swapping out game cartridges.
Oddly enough, Nokia ignored all of this expert advice with the N-Gage. As discussed in the last point, they priced the phone/game well over $100 (of course, Nintendo and Sony would both bump up handheld game prices in the coming months with the DS and PSP, but that's another story). The N-Gage does not have a simple handheld design like other Nokia phones; quite the opposite, you had to hold the phone sideways (lengthwise) against your head to actually use it, which made the user look a bit odd, to say the least. Here’s what some major websites had to say about the look of the N-Gage:
CNN: “Essentially, it looks like you've had a taco surgically grafted to your head.”
Mobileburn: “Picture holding a taco to your ear and you get the picture.”
Netjak: “In fact, for the rest of this review, this product shall now be called El Taco.”
And Nokia ignored the gaming community’s desires for large screens and ease of switching games; you actually had to take the phone apart and remove the battery every time you wanted to play a different game. With the N-Gage bucking common sense and traditional wisdom left and right, is it any wonder this product failed, despite being such a good core idea?
Go for multiple and totally different target markets simultaneously, with inadequate planning for each. If you asked a Nokia exec who they were marketing the N-Gage to one week, he’d say, “to the hard-core gamers, the ones who love their video games!” Ask the company the next week and they might have said, “We’re going after the female market, the ones who are comfortable with Nokia phones and want to experiment with games.” Ask them later and they may reply, “We’re marketing to the young professional, affluent and on the go.”
But here’s the problem with that: an advertisement that would be appealing to a hardcore gamer would completely turn off the mainstream female market, who would think it was too 'techy' and definitely not for them. And an ad that catered to the young professional would be anathema if a hardcore gamer saw it; it would make them think that the N-Gage was just kids’ stuff.
Sure, some companies can get away with trying to be everything to everyone, marketing to many different target markets. Wal-Mart, for instance. However, many high technology gadgets absolutely can’t work that way. The reason so few people ever heard of the N-Gage (excepting those people who saw the too-little, too-late plethora of ads during the 2004 Nokia Sugar Bowl) is that Nokia’s marketing efforts were spread too thin. They wanted to be everything to everyone, but ended up being little to few. While the N-Gage may indeed have had legs in all of those markets, it might have been more effective to stagger the marketing, to concentrate on winning over one market, then on another.
Oh, and if you’re going after a female market for a video gaming device? I’m not sure the admittedly gorgeous yet decidedly unrealistic curves of Lara Croft: Tomb Raider are really the type of thing you want to promote.
Do these rules sound obvious? Sure, they do. However, major businesses all over the world ignore conventional wisdom like this on an almost daily basis. One of the major keys to success in the business world (which few college classes teach) is not getting carried away by meaningless hype; keeping your head and always retaining your common sense. Businesses that enter new markets with inferior products, inflated pricing, poor features, and multiple disparate target markets will undoubtedly fail... just like the experts would have told them if they’d bothered to listen.
To read more by James Lemoine on the power of Differentiation and Marketing, be sure to order a copy of Business Defined!
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© Copyright Harbinger Publishing, 2003-2008. Business Defined is © Copyright Harbinger Publishing and James Lemoine, 2008. All rights reserved. Finding Boardwalk and Stupid Product Launch Tricks originally appeared in the Leadership Solutions Magazine, 2003-2004, from TRI Leadership Resources. Photography from FreeDigitalPhotos.net. All products and trademarks used within this article are the property of their respective holders. Reproduction in any form of the content of this website is prohibited without the express written permission of the publisher. |
