TWO YEARS AGO, videogame maker Nintendo Co. was nearly written off as a serious contender in the battle of next-generation consoles.
Its GameCube console, which made its debut in 2001, languished in third place far behind Sony Corp.'s PlayStation 2 and Microsoft Corp.'s Xbox. Few people believed the new console that was about to come out could compete seriously with rivals' sleek devices with cutting-edge technology.
Nintendo has proved its skeptics wrong. While the Kyoto-based company's Wii console is a simple device in terms of technology, it introduced a brand-new way of playing videogames with an intuitive controller that can be wielded like a tennis racket or a sword. After its launch in November 2006, Wii has become the hottest-selling gaming console around the world.
Nintendo not only revived its business, it transformed the market by attracting an untapped audience of people age 25 and older to a product that usually is associated with children and teenagers.
That helps explain why Nintendo took the top spot in the featured category, 'Innovative in Responding to Customer Needs,' in The Wall Street Journal Asia's latest Asia 200 survey of readers.
Aided by the strong showing in the category, Nintendo vaulted to the No. 2 spot overall for Japan, behind repeat winner Toyota Motor Corp. Nintendo, which hasn't been a top-10 overall finisher in the survey since 2002, also benefited from a top-five finish in the corporate-reputation category.
Readers chose Internet-and-communications conglomerate Softbank Corp. as Japan's second-most-innovative company. Softbank made a huge bet two years ago by paying $15 billion to acquire the cellphone operations of Britain's Vodafone Group PLC. The company, run by maverick CEO Masayoshi Son, has reinvigorated the previously lagging operator with a broad lineup of mobile phones and a menu of price plans that are less expensive than those of rivals.
The No. 3-ranked company in innovation, Honda Motor Co., has seen steady growth in the U.S. with its small, fuel-efficient cars. Sales this year will be boosted by the popular Civic and the fuel-sipping Fit, two of the best-selling cars in the huge U.S. market as drivers shun sport-utility vehicles in favor of smaller, more fuel-efficient vehicles. The car maker, which came in No. 4 overall, also has made a big push to expand in emerging markets like China and India, where it has sold motorcycles for decades.
Seven & I Holdings Co. ranked fourth in innovation, buoyed by an aggressive expansion of 7-Eleven convenience stores throughout Asia and the U.S. Analysts say the company has mastered the retail model of serving fresh food and providing space for services like personal banking in densely populated urban areas.
Toyota came in fifth in innovation, while topping the country's overall ranking for the sixth consecutive survey. Consumers in the U.S. have continued to flock to the Prius hybrid and other fuel-efficient vehicles while sales of Toyota's trucks and SUVs have struggled amid higher gasoline prices. The car maker's Lexus brand is the best-selling luxury line in the U.S. Toyota also has seen rapid growth in China in the past few years. Readers ranked Toyota No. 1 in the categories of long-term management vision, corporate reputation, financial reputation and quality of its products and services.
Ranked ninth in innovation, Canon Inc. took the No. 3 spot for Japan overall. The world's largest maker of digital cameras and laser printers has posted eight straight years of record operating profits on strong sales of copiers, laser printers and digital cameras. It came in second in both company reputation and quality of services and products.
Matsushita Electric Industrial Co., the maker of Panasonic consumer-electronics products, was No. 5 overall and scored high marks in almost every category. The Osaka-based company continues to post solid profits as strong demand for its plasma televisions has helped it weather increasing competition.
Founded more than a century ago as a maker of traditional Japanese playing cards, Nintendo is used to reinventing itself to keep up with changing times. After broadening its business to toys in the 1960s, it made a crucial decision to become a videogame maker a decade later.
The company got its big break in the 1980s when it released its Nintendo Entertainment System, which introduced arcade-style games into homes. Some of its early hits included Super Mario Brothers and Donkey Kong, propelling the games' creator, Shigeru Miyamoto, into stardom.
The 55-year-old Mr. Miyamoto was also behind the development of the Wii -- Nintendo's answer to staying competitive in an industry that increasingly was focusing on powerful and expensive technologies that cater to hardcore game fans.
While Sony and Microsoft went head-to-head on sophisticated consoles that played fast-action games with realistic graphics, Nintendo limited its capabilities to make it more affordable. It focused on making its videogames easy to use and interesting enough for nonvideogame fans.
Wii is played with a controller that looks like a television remote control -- a deliberate decision because TV remote controls are an object familiar to everyone. It contains a sensor inside to allow games to be played by moving it around.
Its biggest hit has been a game called Wii Sports, which lets users play tennis, go bowling and golf by swinging the controller like a racket, ball or golf club with characters that they can design to look like themselves.
Earlier this year, it released another innovative game in the U.S. called Wii Fit, in which users can play exercise games by standing on a board that can detect subtle shifts in weight.
The strategy, led by Nintendo President Satoru Iwata, has paid off handsomely. Wii is outselling both PlayStation 3 and Xbox 360 and has so far sold 24.5 million units world-wide. Nintendo's net profit jumped 48% in the latest fiscal year, ended March.
On top of the Wii's popularity, Nintendo continues to dominate the portable-videogame market with its DS device. The company has increased the game-player population with a lineup of easy-to-play games as well as educational and reference titles. The machine, whose name stands for dual screen, has a touch-screen that can be used with a stylus.
In Japan, the DS has racked up sales as older adults buy them to play quiz games, designed to keep brains from getting rusty, and study educational subjects like English. One school district in Kyoto uses them in eighth-grade classes to help students learn English vocabulary.
Nintendo's strength has prompted changes in the industry as independent publishers, including U.S. powerhouse Electronic Arts Inc., have started putting more weight on developing games for the Wii and DS. Its rivals, Sony and Microsoft, also are developing easier-to-play games that depart from the usual fast-action style that appeals to traditional game players.
Although some industry watchers doubt Nintendo's ability to keep the momentum going, plenty of others believe it will continue.
Yukari Iwatani Kane |
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