Disengaging

I'll make clear right away that I do not and cannot follow all facets of the game industry, and two segments that I barely pay attention to are hand-helds and cell phones. That said, I do have a few comments on the first big-market device to slam these these two segments together, resulting in a Frankenstein-like device that absolutely fails in both areas it tried to combine: Of course, I'm talking about the N-Gage, by Nokia.

Many of my comments deal with branding and positioning theory, so you'll just need to bear with me as I prattle on about stuff that may bore a lot of people, but, hey, it's what I do! Also, keep in mind that while a great many other developers have expressed to me similar befuddlement about the N-Gage's many blunders, most will not say so in public. It's a dangerous game slapping the hand that one day might feed you.

o Nokia is the wrong company to make portable gaming devices.

Nokia needs to ask themselves, "What does our brand mean to customers?"

Often, companies run into big problems when they answer this question in a different way than their customers do. I'm certain the average Nokia customer thinks of Nokia as a leader in the cell phone market. And that's about it. In a nutshell, Nokia means cell phones to consumers. So, when Nokia jumps into the games market, it doesn't make sense to people. It doesn't ring true. People naturally ask themselves, "What the heck does Nokia know about games and game platforms?!" Oh sure, Nokia has simplistic little cell phone games on their phones already, but those are seen as a side feature. Every cell phone has these games. And these minor games do not negatively impact the meaning of a company's brand.

So, when Nokia last year released a dedicated portable gaming device, consumers subconsciously realized it was a mismatch for the Nokia brand. It's a positioning blunder, pure and simple. In fact, it can damage their brand by giving it a split personality.

Some 60 - 70 years ago, for example, everyone thought of Heinz as the king of pickles. In fact, 57 juicy varieties. Heinz ruled the pickle category. No one else was close. Then Heinz management heard about a new upstart category that had good potential for growth. Hey, we're a big, wealthy company, thought Heinz, let's take over a second category. And boy did they. They went after the ketchup market like a force of nature, advertising for years that Heinz made the best ketchup, eventually crushing all comers in this red-sauced category. They had done their job well, no doubt about it. By the time they won the ketchup category, the average person on the street thought of Heinz first and foremost when they thought of ketchup. Unlike waiting for Heinz's slow pouring ketchup, management did not anticipate what happened next...

In their fervor of red, Heinz lost green. Pickle green. No one thought about Heinz as a pickle brand anymore -- Heinz clearly meant ketchup. This is one of the very rare times in corporate history that a brand so thoroughly and successfully changed identities. Usually, when a brand tries to change, it fails in both categories -- witness this happening with Kodak right now, as it tries to change from a film brand to a digital image brand. Ain't gonna happen, if history is any indication. The end of the Heinz story is still happy, though. They still rule in ketchup, but they've gone sour in pickles, overtaken by better focused (single meaning) brands, like Vlasic, Mt. Olive and Claussen.

The lesson Nokia should learn is that when you give a brand two meanings, you place a high risk on devaluing the brand's value in both categories. You create a weaker brand. Is this really what Nokia wants to see happen with their brand?! You can bet that many of Nokia's competitors are giggling with glee to see Nokia distract themselves away from their core cell phone market, because when the leader gets distracted, it gives the guys lower on the ladder a chance to climb over top of them.

What Nokia has overlooked is that they're only successful within a well defined market, and they'd be better off staying 100% focused on it, maintaining their precious lead. But, only the smartest, best-run companies can resist the of-so-tempting urge to expand into new product categories that are outside their perceived area of expertise.

Is the cell phone market too small for Nokia? Do they believe that branching into other markets is the only way to grow revenues? Is growth in cell phones coming to an end? Gimme a break.

o N-Gage is a tricked up brand name.

This point is rather self-explanatory. What if Microsoft called themselves Micro-Soft? Oh wait, they once did! Smart of them to drop that silly hyphen. What if Xerox called themselves X-rocs? Pretty lame, eh. Well, N-Gage is no less lame. Bottom-line, if you want to establish a new brand, use a name that's easy to say, and easy to write correctly. I've seen N-Gage as Ngage, N-gage, NGage, n-Gage, N-Game, iN-Gage, eNGage and a few other ways. If they liked the sound of "engage," then use "Engage" as the name. Keep it simple, otherwise expect people to screw it up at every chance. Wal*Mart is about the only top brand I know of with a tricked up name (and I too often see it as Wal-Mart, or Walmart, or several other derivations). Most brands that started out messy, like Micro-Soft's, eventually became de-tricked as smarter people within the company figured out that simplicity rules.

o Nokia does not know how to speak to gamers.

First and foremost, it's inherently difficult to advertise a product that is poorly positioned, like the N-Gage. But, Nokia's marketing for the N-Gage truly shows that they do not understand what the gamer cares about. I'm not the only one with this opinion -- I've heard it from a good many other developers in this industry, who agree with me in thinking that all of those two-page advertisements for the N-Gage were ineffective, unappealing, and failed to deliver a convincing message to get people to buy one of these devices. Their ads typically showed a scene with no people, such as a locker room, or a wet street, with a tagline like, "This is where I spun out of control." Okay, and why is that inherently interesting to me as a game player? What sets the N-Gage apart from the GBA? Why should I care? Grade F on the ads.

o Nokia lacks the know-how and experience to design a decent game device.

This is one of the least important problems, because no matter how well the N-Gage could have been designed, it was still a positioning mismatch for the Nokia brand, and therefore it's naturally hard for people to trust them to make a product that's outside their area of expertise. Would people buy a Nokia DVD player? Or a Nokia computer? But you quickly counter, "Scott, cell phone are hand-held devices and so are portable game systems." True, but would it therefore make sense for the Nokia to also get into PDA's, and portable GPS devices -- both of which can use wireless technology like a cell phone.

Likewise, why don't the PDA and Pocket PC companies, like Palm, come out with a dedicated portable gaming device? It makes just as much sense for them, no? And what about the other cell phone companies, like Samsung, Motorola, Ericsson, Sanyo, Qualcomm -- if Nokia thinks they can do it, why not their competitors? Or, do their competitors have a better grasp of their brand's limits. Again, a smart company knows its boundaries, and rather than stretching beyond them, they instead focus on winning the war within their stronghold. Nokia stepped outside its boundary, and sales show that Nokia got slaughtered.

But, more to the point, the N-Gage is a design flop. EA president and COO John Riccitiello recently slammed the N-Gage, saying, "When I picked that thing up I knew it was a dog -- it just feels stupid." He pretty much sums it up. As a cell phone you hold it like a taco, and as a gaming device the screen is oriented wrong, and the game card can only be changed after you go through the inconceivable hassle of removing the N-Gage's battery. Yeesh!

o Should Nokia try to rescue the N-Gage?

Bottom-line: They shouldn't. It's a positioning mistake for the Nokia brand, and a dead-end distraction for Nokia management. But, we all know that Nokia will try to save face and at least give the Nokia another try. Here's what they should do:

-- Fix the design. This is a no-brainer. Screen orientation should be landscape, like the GBA's. Allow players to change game cards without dissecting the device. Re-orient the phone's ear-piece and microphone so that you don't look like an utter idiot talking into the device.

-- Ditch the N-Gage name. It has no value. In fact, it has negative value. To most game players, the name N-Gage is a warning to stay away ...far away. Best to start over with a new name and a clean slate. Admit that the N-Gage was a mistake, and introduce a newly named device. Will Nokia do this? Not a chance -- they'll stick with the sullied N-Gage name because to change names is like admitting failure, and companies with egos hate to admit failure.

-- They need a revolutionary game that's not already available on the PC or on another platform. Getting games that are better played on stronger platforms is a weak strategy for any platform. The also need a game that truly exploits the Bluetooth and/or wireless advantage of the device. Otherwise, they'll never have a compelling reason for someone to buy their more expensive device over the GBA or coming Sony PSP. (The fact that Nokia has combined a cell phone with a portable game device adds very little value to most people. If the games aren't compelling, NO ONE cares that this device doubles as a phone. No one.)

-- Nokia needs to create a separate company to handle the N-Gage. The "Nokia" name should never be associated with this device, much like the Toyota name is not associated with Lexus. Don't agree? Neither did all-powerful IBM when it came out with the revolutionary IBM PC. IBM had very bright people who developed the PC. But the IBM PC team was saddled with the crushing weight of IBM's slow-to-react management structure, and the fact that IBM management saw the PC group as a side line (add-ons to their mainframes and mini's), rather than a potential gold mine unto itself. It didn't take long for fast-acting competitors to out-pace, out-price, and out-brand the IBM PC. Had IBM's PC had it's own company (funded/owned by IBM in the beginning), then things could have been different -- at least this new company, with it's own separately branded image, would have had a fighting chance. Nokia can learn from this example.

But, the bottom-line is they won't. Therefore, my advice for Nokia is to disengage completely from the game market and remain focused on their core business. The N-Gage is a money pit. It has cost them $100 million plus so far and they have zip to show for it. Why throw good money after bad?

UPDATE (March 4, '04):

Nokia has tried before to expand the reach of its brand. Back in the late 80's they bought a failed computer division from Ericsson (whom previously purchased Datasaab, a computer maker at the time). So, after Ericsson figured out that they couldn't jump into the exploding computer market, Nokia thought they'd give it a go by creating a new division, Nokia Data. Three years later they realized their mistake and I think ended up selling their computer division to someone else, but either way they wisely got out of computers.

Actually, this move was the start of Nokia's critical turning point and rise to dominance. Nokia's management sold off most of its many side businesses and shifted nearly all focus to the cell phone market. By 1995 or so, over 90% of Nokia's business came from cell phone, and they had shed their conglomerate identity problem. What's neat is that by shedding all of these side businesses, they became a LOT more successful -- the lesson is that it's better to be the big fish in one pond than have small, easily eaten fish in many ponds.

Nokia basically shot to the top because they remade their brand to mean one single thing: cell phones. And by the time most of the world heard about Nokia, it was a cell phone company, and so it started off with the proper branding image.

Think about this...

What's a Nokia? (Most people will quickly answer "a cell phone" or "a cell phone company.")

However, how will people answer the same question about Nokia's competitors:

What's a Motorola?
What's a Sanyo?
What's a Samsung?
What's a Handspring?
What's a Panasonic?
What's a Kyocera?
What's a Siemens?
What's a Mitsubishi?

Nokia's wins because most of their competitors have brands that lack a laser-focused meaning. And since consumers innately trust a specialist over a generalist, when it comes to cell phone people naturally believe Nokia makes the better cell phone because they are a specialist.

This is why Nokia's N-Gage is damaging their brand, by painting it as a game platform maker. They're lucky that they're failing, because the more success they achieve, the weaker they become in the cell phone market (because they become more and more unfocused and meaningless, brand-wise, like their competitors above).

The two brands that seem to be well focused in Nokia's market are Nextel and Ericsson. These are the two biggest reasons Nokia needs to keep its eye on the cell phone market and not let itself get distracted down dead-end side alleys.

Comments

[Joe Siegler]

Read somewhere over the weekend that Nokia was going to re-design the N-Gage. Don't remember where I read that, but I don't think they're ready to abandon it totally.

I remember when this was first announced thinking it was gonna be failure.

[Jeffool]

Yeah, the entire thing was just shades of 90's exuberance. The name 'N-Gage' ranks right up there with 'X-Treme' and the likes. The ads were, well, bad. And video-game/cell-phone? C'mon. The concept is what I'd directly compare to the toaster-car. Sure, wireless multiplayer is fun, but it doubling as a phone just seems pointless to me. *sigh* I think I'm more disappointed that they actually thought it would succeed.

[Brian S.]

Scott, what about the X-Box? If it did not have Microsoft's muscle behind it to absorb all the losses (multi-billions?) and the one decent, but not revolutionary game, Halo, would you not be saying the same thing? Aside from its foray into game publishing with the hit, Age of Empire, and its puzzle/card games (Free Cell) Microsoft had never been associated with gaming in the minds of the public or the core gaming community.

X-Box had terrible design (the original gamepad) and a lame name (it's Xtreme!) plus stupid advertising. Their only saving grace was the Nintendo dropped the ball with the Gamecube. Nintendo did not have any great exclusive games outside of its own and it still insisted on positioning the console for the kiddie set.

[Greg Findlay]

Scott, do you think it would be a bad idea to develop a game as one genre and then switch it to a different genre for a second game? Would it better or worse if both games followed the same character?

[Jeffool]

Eh, X-Box isn't quite as bad a name as X-Treme or N-Gage, as X-Box isn't trying to sound like something else. But then again, X-Box is a pretty crappy name. But Microsoft has something going for it. It's the Heinz of the software world. They've got mad money to toss into ads and exclusives (many of which were great games, IMHO.)

And all-in-all, their system isn't bad. I got it rather than the GameCube. While I love most of the Cube games I've played, I'm happy with my purchace. Halo, Crimson Skies, MechWarrior, Jet Set Radio Future, Star Wars: KOTOR... All great exclusives. Splinter Cell was great fun and was on XBox months ahead of PS2... So far as console exclusives they've also had/will-have Morrowind, Doom3, and Fable.

And I'm not even going to mention that any game that is multi-system is usually better on XBox. ;) (Save EA being anti-X-Box Live.)

And XBox Live is a great thing in my book. I'm willing to pay for quality online play.

And the original controller is a sore point for me, as I loved it. It reminded me of the Dreamcast controller. I've got big hands and hate having to squish my fingers together. But that GameCube controller? Dear God.

And yeah, I realize I'm in the minority, but hey, to each their own.

That's why its Xbox and not X-Box.

[Nathan McKenzie]

This is the part of the conversation where Nathan veers off-topic! Exciting.

Does Microsoft just have a thing with 'X'es?

Along with the Xbox, I know they have DirectX and ActiveX, and I have hunch there are more similar X named things out there.

Weird.

[Brad Renfro]

"The lesson Nokia should learn is that when you give a brand two meanings, you place a high risk on devaluing the brand's value in both categories. Nokia needs to create a separate company to handle the N-Gage."

I think the irony is that two of the gaming frontrunners are Sony and Microsoft, two companies with many thumbs in many pies. I remember Dean Takahashi saying that Sony and Microsoft successfully distanced their corporate brands from their gaming brands. Not sure what that exactly means in terms of actual marketing practices but isn't that what Nokia was trying to do as well? When a large corporation greenlights millions of dollars on something, you'd think they hire many people with great experience and degrees in marketing. They must have seen some sort of market somewhere to justify 100 million.

Also, the Microsoft Xenon is the neXt Xcellent Xample.

[Walter]

Interestingly, 'N-Gage' is a direct attempt at fusing the Nokia brand name with the product, as the 'N' references 'Nokia'. Not sure how many potential customers picked up on that, though.

Microsoft and Sony can get away with their forays, I think, because as Brad put it, they've got many thumbs in many pies. Sony easily subsumes game hardware because Sony means 'electronics'. Microsoft is trickier, but note that they did successful hardware before the XBox: mice, keyboards and joysticks. Their software, also, isn't predominantly of one kind: there's OSes, industrial productivity suites, home stuff, and so on. The greater the range of products a company is known for, presumably the less resistance consumers will have to that company's producing something different (within certain limits, of course). But when the company's brand name is synonymous with one very specific kind of product, resistance is greater.

Re: 'XBox', I'm pretty sure the use of 'X' was partially influenced by the fact that their technologies were named 'DirectX' and 'ActiveX', whose use was essential to the XBox doing what it was supposed to do. And the 'X' in 'DirectX' and so forth obviously refers to the variability of what is 'direct': sound, 3-D, etc. There's a logical lineage behind the name 'XBox': it's not just because the letter 'X' happens to be the most popular with a certain age group or whatever.

[Gestalt]

Scott - "Many of my comments deal with branding and positioning theory"

Nnghh. ;)

At least now you're calling it "theory" and not "immutable laws". The problem is that for every example that matches the theory, there's another one that doesn't. To take your Heinz example, Heinz might not be well known for pickles these days, but they are famous for soup and baked beans as well as ketchup. That's at least three categories where they're one of the top brands (certainly in the UK, anyway).

Or to take an example a little closer to home, what about Microsoft? They've always been best known as an operating system company, but in the 1990s they also established themselves as a top games publisher, with games like the Flight Simulator series and Age of Empires, something they're building on with the Xbox. Has expanding into the videogames category weakened their brand or damaged their OS business? Not really.

And as Brad pointed out, Sony is another company that covers a lot of categories under a single brand name - music players, movie players, PDAs, PCs, TVs, digital cameras, car stereos, games consoles, and soon hand-held gaming devices as well. They even have their own chain of shops selling all this stuff IIRC.

Of course, if you produce a grade A turkey like the N-Gage then it's going to harm your brand by association, whether you're stretching your brand to a new category or not.

[Walter]

Heinz is definitely not known for anything besides ketchup and vinegar in the US, as far as I'm aware. Pickle relish, I guess. But there's basically +90% association with ketchup in the States.

Also, just thought of this with regards to Microsoft: their primary product having been operating systems, Microsoft accordingly gains a fairly ubiquitous association with everything you do on your computer. All applications are enveloped in a 'Microsoftness', e.g. the look and feel of the windows and buttons. They thereby assume a broad social recognition. They're a simple, integral fact of modern, technological life. Nokia, on the other hand, doesn't gain this ubiquity because you only notice Nokia when you're looking at Nokia cell phones, which you don't even do while you're talking on them. You're talking on a cell phone isn't enveloped by 'Nokianess'.

[Paul Jenkins]

I'm not going to talk about Microsoft's deviation from their primary branded category (Operating Systems) except to say that, for most people I believe Microsoft simply means, "computers." It's a mis-association, granted, but if you ask most people, I think the vast majority would say that Microsoft means either computers or software, not operating systems specifically.

Sony, on the other hand, does exactly what Scott's talked about in segmenting their operations. It's one of their keys to success in multiple markets. If you consider Sony's forays into online gaming, you don't find Sony Entertainment America. You find Sony Online Entertainment, a company that is almost wholly independant of the much larger corporation. SOE may benefit from the "Sony" name brand, but their operations are effectively removed.

They've even gone further with other operations. In examples I'd hold up Columbia House and Digital Audio Disc Corporation. The former was so completely removed from the Sony primary brand and corporate structure that when it began losing money several years ago Sony cut it loose to another company and no one even noticed (except the employees and the Washington Post, but that's a different matter).

In the same way, SEA is separate from SEJ (Sony Entertainment America and Sony Entertainment Japan, respectively).

But I think, in terms of branding, one of the best things Sony does is to not overly associate themselves with any single product line. They can use their brand like an axe to swing at any market they are having trouble with, while still maintaining hard won name recognition elsewhere.

In part, that's been bolstered by the name they chose (which, as Scott has pointed out is simple... Much easier than saying Sanyo or Toshiba). The fact that they've put that name everywhere in the electronics field is a testament to their good positioning strategy. There are 450 bajillion types of portable cd player, but most people just refer to theirs as a Walkman (whether it's a Sony Walkman or a Sanyo Personal Cassette Player). Their brand's name and appeal was in fact so universal that when cassettes gave way to CD's, most people were resistant to calling portable CD players "Discman". It was still a Walkman in the publc eye.

But I bet you'd never think to buy Sony brand Pickles, now would you? :>

One last note is that Sony has done 2 things that distinguish them in terms of marketing:

1. Every Sony product line naturally evolves in a direction related to their primary direction. i.e. Electronic Games from Television or Home Computers from Electronic Games (I won't talk about how much Vaio's suck, but my parents bought one).

2. Every new product line has its own personalized name that detaches itself from the company's central nomenclature. Playstation, Vaio, Walkman, etc. How many people refer to their "Sony Walkman", their "Sony Playstation" or whatever? In every day speak, it's assumed that Sony produced it, because they've effectively attached the corporate name to the product name. Nokia's N-Gage, on the other hand is redundant. If the N stands for Nokia, then why say Nokia first?

Just out of curiosity, how do you pronounce Nokia? I used t say No-key-ah, but a friend who says Noak-yah made fun of me... now I tend not to say the name at all. ;)

[Scott Miller]

Gestalt, Heinz does soup? News to me. When I think of soup I think of Campbell's.

As for Sony, their brand, IMO, means consumer electronics, no? They have successful products in quite a few consumer electronics categories. Yet, because of the broad meaning of their brand I bet they lead in only a few of the categories they've entered. Sony is like Kraft in the grocery category -- a company that has a finger in dozens of little categories but leads in less than a handful.

Microsoft, though, has a legal monopoly with their OS, and so they have more leeway to make brand blunders and still succeed wildly as a company. As long as they have a head lock on the OS market, they'll have enough dough to throw at follies like the Xbox that would have sunk most other companies. I've criticized MSoft's decision to release a game console since I first heard of it (even writing a plan update about it over a year before its release) -- it's a dead end product that has experienced minor sales success because of the self-defeating blunders committed by Nintendo. The Xbox has lost MSoft well over a billion bucks, and even if the Xbox 2 does three times as well, it'll be hard to make that up. Like Nokia with the N-Gage, MSoft stepped outside its stronghold with the Xbox. Shareholders likely won't tolerate the cash green gusher shooting from Microsoft's neck for more than one more console cycle. If the Xbox 2 doesn't pull of a miracle, then I see MSoft tossing in the towel, much like they did with Ultimate TV (taking on Tivo) and Web TV. But first MSoft must try to save face and give it one more shot.

[JP]

When I think of Heinz, actually, I think of Roger Daltrey immersed bodily in a bathtub full of baked beans on the cover of "The Who Sell Out". I love it when the careful efforts of marketers are subverted or twisted.

[Blake Grant]

I agree with everything you said about the N-Gage. Terrible name, worse design, and horrendous game library. However, you did fail to mention what Nokia was trying to do. I don't think they were so much trying to appeal to the average gamer (this is part of their problem), but to the mass consumer who likes their cellphone games and wants more of them. The people who don't know the difference between Nintendo and Sony, and will recognize the Nokia name for making great cellphones, and will go and buy an N-Gage for that reason.

The basic theory might have worked, but they completely screwed up on the design of the device. Nobody wants the taco-phone. The games aren't the kind of games that these players would want. There are so many buttons on it that the average cell phone user probably gets very confused by it. Its too pricey to target this market. Nokia would have been better off just making a new high end cell phone (that looked like a cell phone!) that accepted some kind of removable game cartridge, and just released higher quality cellphone style games.

[Nicolas Quijano]

On MS : Didn't they get started as a pure software provider, doing various BASIC interpreters (in ROMs iirc) for companies like Apple, and other pre-PC "PCs" ?
Didn't they get into the OS market by buying most of what became known as MS-DOS from a third party, and rebranding it, selling it to IBM, but keeping the rights to their own version, which I always thought was a major shard in IBM's ability to run with the PC thing ?
Hmmm, I can see how this can both affirm and infirm the theories expressed therein ;)
Ciao

[Brad Renfro]

Like Paul implied, it seems like in certain situations, line extension can work out for a company, possibly at the expense of diluting a single brand. Mario is not just a platformer, HP not just printers, Compaq not just servers, Apple not just personal computers, etc. It's interesting to note that companies who produce gaming consoles were generally not started solely for that business. Nintendo was playing cards, Sega was coin-op machines, Sony and Microsoft were mentioned above, Odyssey was by the Magnavox corporation, PCengine/TurboGrafx was by the NEC corporation, Intellivision was by Mattel, Coleco was by the Conneticut Leather Company. Also interesting to note that Nokia started as a company that produced rubber and paper.

[Brad Renfro]

Nokia's website says their brand is synonymous with "mobile communications." A convergent cellphone/gaming device seems to fit under that. Given the huge hype about mobile gaming being the "next big thing," it seems logical to at least try to shoehorn yourself into that market.

[Gestalt]

Walter - "Heinz is definitely not known for anything besides ketchup and vinegar in the US"

Scott - "Heinz does soup?"

Weird. Over here Heinz are as well known for their beans as they are for ketchup. I honestly couldn't name another company that makes baked beans or canned spaghetti. As for soup, Heinz are obviously not as famous for that as Campbells, but they must be one of the biggest runners up.

Maybe it's just me, but if I like Heinz baked beans and I see they do soup as well, I'd be more likely to buy their soup. Surely that's the whole point of branding? Selling beans and soup under the same label doesn't dilute your brand, unless one or both of those products tastes horrible, or you spend so much time focusing on one that you lose your market in the other (like your story about Heinz and pickles).

Having said that, there are limits. If Heinz started making PCs, that's hardly going to inspire confidence. ;)

[Mick]

I'm curious to hear what people think--if anything--about the Zodiac Tapwave. It seems like it does better than the N-Gage on Scott's points:

1) It doesn't have the "tricked-out" name; 2) From the reviews I've read it seems to have a fairly solid design, with only minor flaws; 3) It's not trying to expand the scope of an existing brand.

Furthermore, the game/PDA combo makes more sense (to me, anyway) than a game/phone combo. Wireless phones are very small nowadays, and to add a gaming system into it seems to unnecessarily bulk it up. People want to be able to carry these things anywhere, and don't want a bulkier device if they can avoid it. Nintendo's GBA SP is about as small as I could imagine, and even that would seem strange being held up to someone's ear when you consider the size of other phones. A PDA, on the other hand, is very comparable in size to a handheld game system. The market they're targeting is already willing to carry around a PDA, so a decent game system is a bonus.

While Nokia's use of its brand to sell the N-Gage may be viewed as a problem, I think Zodiac has the opposite problem: no one knows who they are.

On top of that, it doesn't seem to have made much of an impression in the gaming community with its advertising campaign. I'd bet many of you haven't even heard of it. I haven't seen them for sale in any game stores, unlike the N-Gage. Maybe they're sold more in places where you go to buy PDA's rather than handheld games; I don't know, I haven't been to any PDA retailers recently. Even if that's the case, waiting for people to walk into a store to buy a PDA is probably a bad time to have people learn about the Tapwave for the first time.

To look at all this from a developer perspective, it seems to me that wireless game developers would be better off concentrating on the general markets rather than spending time incorporating the features of these "souped-up" devices. In other words, until these devices (N-Gage, Tapwave, or any other comers) have proven themselves, just build games that will work on any device that uses the OS (Symbian, Palm, etc.) rather than wasting time targeting the minority of the market. I haven't really studied it, though; maybe it's easy to throw in the enhancements and still have games that work on both systems.

[Scott Miller]

Mick, I've messed with a Zodiac game device, and overall I'm impressed as it IS well designed. Yet, I have my doubts that there's a market for it (this is another point working against the N-Gage that I did not cover). Also, for an unknown company to come out of the blue and succeed, they need a buzz-worthy product that generates copious free press coverage -- press coverage is 1000 times more compelling to consumers than advertising, BTW. The Zodiac (or is it TapWave? I'm not sure which name is used for the company and which for the device itself) lacks a compelling sales hook. It's merely a better device, and being merely better doesn't win in the minds of consumers.

Nicolas, MSoft got the very first start as the maker of BASIC for the Altair computer. However, what put MSoft on the map, as far as consumers and press are concerned, is DOS. Thus, they became known as an OS company, and 25 years later this remains their core strength and revenue source.

-- "Mario is not just a platformer, HP not just printers, Compaq not just servers, Apple not just personal computers, etc."

Brad:

o Character-based games are more easily expanded into new settings, stories and scenarios. This is one of the inherent strength of character-centric design, and one of the reasons 3DR prefers it.

o HP still makes the bulk of their revenues via printers. They have no chance of being a leader in PCs.

o What else does Apple do? Oh, right, the iPod. Apple faces the see-saw brand identity problem that Heinz did -- the more successful the iPod, the more they erode their brand clout in the computer category. But, given that Apple is a relative weak player in the PC market anyway, perhaps it's a good shift. I think if given a choice to be king of pickles or ketchup, they're feeling great about the fork in the road they took.

-- "Nokia's website says their brand is synonymous with "mobile communications."

Two things, Brad. Companies generally see their brands as having wider scope than consumers (management ego plays no small role in this fact). Second, IMO, mobile communications is pretty much just techno-speak for cell phones. ;-)

[Nathan McKenzie]

Scott:
"Character-based games are more easily expanded into new settings, stories and scenarios. This is one of the inherent strength of character-centric design, and one of the reasons 3DR prefers it."

Hey Scott, I was just watching a lecture by Henry Jenkins this weekend, and he was discussing that the progression he thinks he's seeing in our popular media is going "story focus -> character focus -> world focus". Basically, if a character like Duke Nuk'em or Max Payne or Mario has more possiblities and opportunities for new interesting products, worlds like "Middle Earth" or "The Matrix" provide even more opportunities. It was definitely an interesting talk - basically focusing the branding on the space, I guess, rather than the actions or the actors.

I know this is off-topic, but I was wondering if you had any thoughts on that (perhaps in another thread sometime).

[Mark]

Mick, half way down reading about the "Zodiac" I already forgot the name! (very bad).. if it's some gaming platform/pda then the gaming public should have at least heard about it, no one I know has.

I agree with everything Scott mentioned about the N-Gage, but I believe a company like Nokia can succeed in making a handheld gaming platform. All Nokia needs to do is create a side business which specialises in handheld gaming ONLY. If you want to succeed don't attach your company with a product outside its expertise or worse combine the two.

If you bring an unknown company into the market and have the finances available to make a great product, the curiosity of people alone will draw interest in the product. They also in turn, won't have the well known name(nokia) to counter argue against the very different product being offered.

I generally agree with most of the points raised in this article, but I don’t agree with the statement that Nokia’s brand had a serious impact on the market performance of N-Gage. Nokia has never been only a cell phone company, and to this day supports a variety of fairly divergent products. It may have been an R&D stretch for Nokia to enter the handheld gaming market and positive branding could have helped, but I don't believe that branding issues caused N-Gage to fail.

A friend of mine owns a pair of Nokia rubber boots. That may sound somewhat odd; however, Nokia also has made rain coats, hats, shoes, slippers, rubber tires, paper, facial tissue, cables, televisions, radios, floor coverings, personal computers, monitors, PBXs, switches, routers, fibre optic switches & transponders, bicycles, PVRs, satellite television receivers and of course phones (along with the associated infrastructure such as base stations). Nokia still makes quite a few of these products still today.

Nokia is probably one of the very best examples of a corporation that has successfully entered, maintained, and succeeded in multiple divergent markets at the same time. It is not as though Nokia does not have a history of expanding into different markets -- up until the GSM cellular network became predominant, Nokia wasn't known as a cellular phone manufacturer. This isn’t particularly surprising considering Nokia is a company older than even IBM. The point being that Nokia has reinvented itself several times successfully – whether that has been simply broadening it’s markets, or entering entirely new ones.

Whether or not Nokia is worried about their performance as a handset manufacturer is arguable. Nokia has had incredible success in the GSM handset market, of which they have been the most predominant manufacturer for quite sometime. However, with the more recent digital networks; GPRS and the upcoming UMTS, Nokia has been far less successful.

With GSM, Nokia entered a market that was new with a large technological lead and virtually no competition. In the current and upcoming digital networks, Nokia is competing in a market where it does not have the best technology, has similar R&D resources as their competitors with less experience, and no first to market lead. Manufacturers such as Sony-Ericsson, Panasonic/Matsushita, and LG suddenly are a threat to Nokia’s lead. While smaller companies such as RIM and Danger boast significant infrastructure leads, which are definite threats for the further future. The basic problem is that the current and next generation of handsets are not just phones – in fact their primary usage might not be as a phone, or in the very least, not simply an ATM packet-switched voice capable device.

For instance, worldwide SMS usage was 1 billion SMS text message per a month in April 1999. In December 2000, that number rose to a record 15 billion SMS text messages per a month. In 2003, SMS usage averaged 46 billion text messages per a month. AT&T Wireless sells SMS service starting at $1.99 US per a month plus $0.10 US for each additional sent message, which amounts to rather significant revenue. SMS had become a major income source to carriers and subsequently the demand for SMS capable handsets drastically increased. NTT DoCoMo in Japan has had similar experiences with not only SMS text messages, but also with multimedia applications such as integrated digital cameras and streaming video.

Nokia realizes it needs to invest into creating handsets that are more than simply phones. In my opinion, attempting a handheld gaming device was a very risky endeavour especially considering they have very limited experience in creating general purposes hardware, no experience in games, and the games offered have no reoccurring revenue stream for carriers – in short risky in creation with an uncertain market. However, N-Gage is a definite manifestation of Nokia’s wish to enter a position where it can provide services with their attractive (or not so attractive) reoccurring revenue streams – not just single time purchase handsets.

It must have been a very tempting proposition for Nokia: a possible reoccurring revenue stream with no live infrastructure maintenance in such a short turn around time. $100 million dollars is quite a great deal of money, but having a successful gaming handset for a company that sold 180 million handsets in 2003 seems like a steal….

As for many of the down falls of N-Gage idea, the article seems to outline the major issues, but I think the point that Nokia lacked the technical knowledge and experience along with there being a very uncertain audience should be stressed far more than any of the marketing issues.

[David Ma]

One more comment (other than forgeting to put my name on my last post):
"Second, IMO, mobile communications is pretty much just techno-speak for cell phones. ;-)"

I think they're trying very hard to break the concept that wireless handsets are only cell phones in peoples minds (as is just about every other handset manufacturer in existence).