The Nintendo Wii is becoming a big entertainment force in Japan as it has started to significantly eat into the share of the Japanese television industry. More importantly, it's eating into the valuable prime-time audience share that is so important for ad revenue.
This may have even been part of the strategy of Nintendo as it was marketed as a gaming experience for the whole family, and many media insiders say it's working great to the detriment of Japan's TV industry.
The Times said that "Japanese television executives are reeling in horror at recent figures from Japan’s audience-tracking firms: last week was the first in nearly two decades where no single show on any commercial station attracted more than a 9 per cent audience share."
Surprisingly, one Japanese media executive of TBS said the reason this is happening is the industry was caught off guard, thinking their competitors were only other TV channels, rather than the entertainment industry as a whole.
Parents are the ones that have been won over, as they've chosen the more interactive gaming system over what television has to offer.
The executive added that the gaming industry still hasn't faced their toughest TV lineup yet, such as the football World Cup, Japanese baseball finale and the Olympic games.
To me that sounds like a somewhat lame comment. Those particular sporting activities are very seasonal, and while they generate great ad revenue, don't deal with the underlying problem of dealing with what gaming interactively offers versus only watching a television set on a daily basis.
This is extraordinary in the industry. Is it a bellwhether to what's going to happen in other countries? Is it unique to Japan? How could those in the industry be so blind to the entertainment threat of the Nintendo Wii?
The bigger question is how are they going to respond. This is happening without the introduction of games to the hard core game users yet. If these numbers continue to drop, this is a potential disaster to the Japanese TV industry. These aren't the types of challenges that can be responded to in a short time.
I'll say this for Nintendo, they knew the market they were initially reaching out to, and they succeeded beyond what they expected in the Japanese market. This will be very interesting to watch and see if they try to attack even harder to take a bigger share of the Japanese entertainment dollar.
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