WWRD: Millennial Dads Help Solve Growth Problem With Nintendo Switch

We all know “moms” are a desirable target group. (Pinterest, Pampers, Honest Company and other brands all scaled by going after moms initially). But what about the “dads”? With Father’s Day in less than two months, one brand—the Nintendo Switch—is doubling down on Millennial Dads because this under-targeted cohort might just help solve the console’s growth problem.

The Nintendo Switch “Dad” Campaign

Developed by creative agency Leo Burnett, the “Switch My Way” campaign follows after last year’s “Anytime, Anywhere” campaign, which highlighted how the whole family can come together to play. This time around, the focus is around the Millennial Dad.

In the first of several ads (see video above), a dad takes care of a sleeping toddler and still enjoys both daddy-time and playtime with his Switch. A second ad shows a dad playing with his Switch while flying on business and then returns home to continue the game with his daughters. Another ad depicts a dad playing on his Switch while waiting in the car for his daughter coming out of school. In the most recent ad, POV shifts to a young daughter playing on the Switch with her friends and then returns home from school to continue the game with her dad.

All these ads highlight the versatility of the Switch to change from console to handheld while emphasizing its gameplay continuity and family-fun nature of the brand.

Some Background: Nintendo + Switch

Nintendo is a Japanese-owned multinational consumer electronics and video game company, known for game franchises like Mario, The Legend of Zelda, and Pokemon. Its first popular console was the NES (Nintendo Entertainment System) and its first notable hand-held was the Game Boy, both introduced in the late ’80s. Over time, the company created Nintendo 64, GameCube and more. All focused on the “hardcore” gamer population and competing directly with PlayStation and Xbox.

In 2006, Nintendo released the Wii, a backward-compatible successor to the GameCube. Because of new mechanics like the Wii Remote motion controls and a balance board, a new set of game franchises emerged, widening its audience base by targeting casual and fitness gamers as well as families. The Wii was the fastest selling console of its generation, totaling 20M units in its first year.

Unfortunately, when Nintendo tried to introduce a new console, the Wii U, it was a disaster in marketing and sales. Consumers thought it was just an upgrade to the previously popular Wii (it was not). Sales quickly dwindled and Wall Street began to dismiss Nintendo.

Then, two years ago, in 2017, Nintendo staged a comeback with the release of its Switch, a crossover between a home-gaming console and a portable gaming device. Retailing at $299.99, it was the fastest selling video game system in the US, “outpacing U.S. sales of all other current-generation systems at the same point in their life cycles.” The Switch outsold the Wii U in just 10-months at 14M units vs. the whole entirety of Wii U at 13M in 5+ years.

Despite the initial success, the Switch seemed to have hit a snag. Earlier this year, the company downward adjusted its annual Switch shipments outlook from 20M to 17M, signaling a stagnation in growth and a potential struggle with attracting a wider audience.

WWRD: “What Would Rose Do” … if she were the person in charge?

Disclaimer: I do not work for Nintendo nor have any insider knowledge, but I do have 10+ years of business, marketing and operations experience. (Learn more about my background and the thinking behind “WWRD.”)

Back in March, I started seeing a bunch of new Nintendo Switch ads… ones I found myself drawn towards. The previous ads I was familiar with often centered on the kids. Parents and families played support in the background. It made me believe that Nintendo was for a younger demographic. However, these new ads showed a maturity, targeting the young dad and highlighting various moments in his adult life where gameplay could co-exist with his parental duties.

The ads intrigued me. Why was Nintendo actively targeting Millennial Dads and not the typical gamer archetype?

After some digging, I realized:

Nintendo Switch is doubling down on Millennial Dads because this under-targeted cohort might just help solve the console’s growth problem.

At the end of the day, growth is tied to revenues and revenues is essentially:

# of units × $ spent per unit

Thus, there are two major ways to solve a growth challenge: (1) broaden your base (i.e. increase the number of units sold), or (2) double down on specific targets and get them to spend more (i.e. increase spend associated with each unit).

In Nintendo’s case, I believe they’re opting for the latter.

Let’s break it down.

01. “…solve the console’s growth problem.”

Growth drills down simply to either volume or spend. For entertainment companies like Nintendo, increasing “volume” essentially equates to scaling audiences. (Not an easy task!)

With any product or service, your company will start off with the core audiences that love the product/service you provide. Once this group is saturated, you must expand and find new audiences. But, beware. If you try to scale too fast or you move to the wrong cohort, you will alienate your core base, which could end up destroying your company from within.

For Nintendo, their initial Switch launch captured their core: casual gaming brand loyalists. These are the folks who love the brand and are considered “early adopters” but are not necessarily into hardcore gaming such as first-person shooter, massively multiplayer online, or battle royale / last man standing genres.

The next step to growth, which is where Nintendo Switch stands now, is to expand to adjacent audiences. Typically, a company would do quite a bit of audience research to understand overlapping interests between various segments. I don’t have a team of data analysts, so I will provide a very high-level breakdown of potential target segments and their likelihood to purchase:

Sources: (a) US Census (2018) of households; (b) US Department of Health & Human Services (2014) of 10-18 year olds; (c) US Census (2017) of 18+ year olds.

Segment explanation:

• Dad is interested in the content because it’s nostalgic… brings him back to the good old days with his NES and Game Boy. Plus, he’s got some disposable income now (especially after taking care of family and personal needs). Competition for this audience is fairly low (see next section for more explanation).
• Mom has just as much disposable income as the Dad, but her desire for the console or the content is much less. Unless she grew up with Nintendo (and not many girls back in the days did), she won’t feel that heartstring pull like a Dad would. Competition for this audience is huge because many companies understand much of the buying power in the household belongs to the mom.
• Teens don’t have as much attachment to the content as the parents. Teen boys will gravitate to more hardcore games (first-person shooter, massively multiplayer online, battle royale) while teen girls might gravitate towards more mobile games. Also, let’s be honest, they don’t have much money to spend unless their parents provide them substantial allowance.
• Single males have tons of disposable income and limited liabilities; however, like their teen male counterparts, they might be more interested in hardcore games on PCs or already own consoles like PlayStation or Xbox. In addition, those who were interested in Nintendo would have been part of the early adopters group. Competition for this audience is intense because many male-dominant brands understand the power of high disposable income.
• Single females also have tons of disposable income and limited liabilities, but their interest in getting a gaming console might just be to have fun with friends. Competition for this audience exist outside of gaming; however, because money is a shift from one category to another, those other categories would use up all of her disposable income.

Thus, if I were Nintendo and trying to solve the growth problem, I’d concentrate on segments that will give me more rewards in the long run… like Dads.

Why not Single Males? Aside from what I mentioned above about single males gravitating towards more hardcore games or already owning a gaming console, their households also only have a single member… themselves.

If we are to believe what Shigeru Miyamoto (Nintendo’s Representative Director) said on the analyst call:

Then, going after households with more than one member would be a better use of resources. With a Dad, if he can convince the other household head to buy into this “family-friendly” console, then we’re talking about getting at least two Switches per household (one for the parents, one for the child). This increases the number of units sold per household as well as the spend that could be generated per unit (e.g. buying accessories, additional games, online access).

02. “…under-targeted cohort…”

In marketing, we look at competitors in our immediate space (in this case gaming consoles like PlayStation and Xbox) as well as competitors outside of our space but going after the same target audiences (e.g. health and wellness, food and beverage, tech).

If we were to look at Young Males or Single Males in general, we see this space is quite crowded. PlayStation and Xbox are clearly targeting hardcore gamers, which skew young single males. In addition, brands targeting Males tend to have a specific look and feel in their advertising: comedic or one-dimensional (see: Old Spice, Bud Light, and Under Armour).

Now, if we look at ads targeting Dads, we see something different and with less competition. Traditionally, advertisers targeted the Mom in parental relationships. (Research have shown moms control 85% of household purchases.) So, the Dad was treated like any other male. “All too often, marketers assume that men who are dads simply act the same as men who are not dads, or they create campaigns based on outdated, clichéd notions about fatherhood,” says MDG Advertising.

These dad ads used to show the “bumbling Mr. Mom who’s trying but not succeeding” or the “Dad who knows how to hack it.” Recently, we’ve started to see more authentic and genuine ads highlighting the changing nature of modern dads. We see creative campaigns where dads play a more integral role in the family (for example the Airbnb ad with a father lying on a hammock and a baby sleeping peacefully on his chest).

Millennial Dads are tired of being misrepresented in advertising and they’re now looking for advertising that reflect their true lives and selves. According to an MDG infographic, 74% of U.S. Millennial dads think advertisers and marketers are out of touch with modern family dynamics and 38% of dads do not believe brands portray their role as a parent accurately. At the same time, 45% of dads say brands play an important role in their life compared with 39% of non-dads and 41% of dads say they switched brands when they became a parent. This indicates a shift in behavior and thus in spending habits when a man goes from Non-Dad to Dad.

In addition, these dads are spending a fair share of time on YouTube, not just to decompress, but also to research parenting topics. This means being exposed to targeted advertising outside of traditional media outlets like sports and entertainment.

When it comes to entertainment for the household, an Ipsos LMX family study completed among 2,800 moms and dads, showed dads play a major part. Dads spent 50% more time than moms with their kids online, were 50% more likely than moms to take the kids to movies, and were also more likely to take the kids to theater, sporting events or concerts. You can interpolate this to imply dads spent more time on entertainment with their kids, which could mean higher purchase desire for family-friendly entertainment systems like the Switch.

03. “…doubling down on Millennial Dads…”

Millennial Dads are born after 1980 and under 39 years old. These dads were in their early teens when the Nintendo consoles and games like Zelda and Mario became popular. Those formative years are hard to shake especially when we think back to fond moments in our childhood. Fast forward to their adulthood, they’re making money and have continued interest in gaming. However, when they became fathers, the hours spent on games shifted. Thus, instead of purchasing or playing on hardcore gaming consoles like PlayStation and Xbox, these Dads will have more desire for family-friendly game consoles like the Nintendo Switch, which they can play on their own or share with the rest of the family. (Here’s an endorsement from a dad).

So how can Nintendo capitalize on its existing family-friendly brand and grow its Switch user base with the Millennial Dads?

• Dial up nostalgia but connect to the present. In recent years, we’ve seen a resurgence of nostalgic content capturing wallets: Jurassic World, Star Wars, Stranger Things, vinyls and arcades. Imagine taking advantage of these emotions and seeing an ad with a dad in his youth playing Super Mario on his NES and fast-forwarding to present day with him once again playing Super Mario but this time he’s getting beaten by his daughter on the Switch.
• Continue to build creatives that demonstrate Dads can be both a parent and a gamer. Make it clear that it’s okay for a Dad to still maintain his gaming interests after having children. Show how things have shifted and the Nintendo Switch can shift with his needs, thereby highlighting the console’s versatility, moving seamlessly from handheld to console and from single-player to multiplayer.
• Target ads on YouTube’s parental categories because we know Dads are looking up how-to’s related to parenting. This becomes a perfect channel to reinvigorate Dads and their interest in gaming by alluding to the short gameplay nature of Switch games, which will help them scratch their gaming itch without dedicating hours on end.
• Get some dadfluencers. Yes, we’ve all heard of “momfluencers,” but not enough advertisers work on “dadfluencers.” Dads exchange information with other dads just like moms do in their communities. Nintendo can host Dad-specific conferences or events to help bolster this community, especially when other gaming conferences like E3 and Gamescom are hyper-focused on the younger male demographic.

Takeaway

Instead of competing with other gaming consoles like PlayStation and Xbox for the young male or single male demographic,

Nintendo Switch should continue to double down on Millennial Dads because this under-targeted cohort will help solve the console’s growth problem.

RESOURCES & RELATED LINKS:

Nintendo:

• Commercials on iSpot.tv: Zelda, “Let Me Try“, Final Fantasy & Mario Kart 8, “Anytime Anywhere“
• The Switch Has Had Nintendo’s Best Marketing Campaign In Years | Forbes | Paul Tassi | January 28, 2017
• Why Is Nintendo’s Switch So Successful? It’s All About The Marketing | Forbes | Jason Evangelho | June 20, 2018
• Breaking Down Nintendo’s Switch Strategy | GameCrate | Angelo M. D’Argenio | March 27, 2018
• Making The Switch: How Nintendo Won Back The West | Forbes | Luke Kelly | February 12, 2018
• One year later, the Nintendo Switch is the best game console on the market | Business Insider | Ben Gilbert | March 5, 2018
• Nintendo starts moving to a Wii-like “non-gamer” strategy for the Switch | Ars Technica | Kyle Orland | May 7, 2018
• The Nintendo Switch has sold close to 20M units, but what does that mean? | Polygon | Ben Kuchera | July 31, 2018
• Nintendo Taps Initiative As Media Agency In The U.S. | Ad Age | Megan Graham | February 12, 2019
• Nintendo Switch Sputtering Less Than Two Years After Debut | Bloomberg | Yuji Nakamura and Yuki Furukawa | January 31, 2019
• EEDAR: Nintendo Switch attracting more women, wider age ranges over time | gamesindustry.biz | Rebekah Valentine | February 11, 2019
• One Switch Per Household? No, Nintendo Wants “Every Single Person” To Buy One | Gamespot | Eddie Makuch | February 11, 2018
• New Nintendo Switch: everything we want to see from the next Switch console | techradar | Emma Boyle, Henry St Leger, Vic Hood | April 17, 2019
• Nintendo led gaming industry TV ad spend in August, but others are catching up | Venture Beat | Eleanor Semerao, iSpot.tv | September 17, 2017

Nintendo PR & Filings

• Corporate Management Policy Briefing / Nine Months Financial Results Briefing for Fiscal Year Ending March 2018 – Q&A Summary
• Nintendo hardware sales
• Nintendo FY 2018 Annual Report
• Nintendo Switch is the fastest-selling video game system of this generation | Nintendo | December 17, 2018

DADvertising & Gamers:

• The Modern Dad: An Untapped Audience for Marketers | Nielson | June 17, 2016
• Study: More men on the ‘daddy track’ | Pew Research Center | Rich Morin | September 17, 2013
• ‘DADvertising’: How Realistic Images of Dads Took Over TV Ads | Fortune | Daniel Bukszpan | June 19, 2016
• The New Face of Gamers Study | Lifecourse Associates (commissioned by Twitch) | June 4, 2014
• Essential Facts About the Computer and Video Game Industry | Entertainment Software Association | 2018
• Younger men play video games, but so do a diverse group of other Americans | Pew Research Center | Anna Brown | September 11, 2017