Companies Playing Catch-Up With The Competition

By Sean Joyner | August 11, 2010 AAA

It happens. Sometimes you wake up one day to find that your crown and scepter have been taken by a younger, richer or more visionary competitor. When this occurs, you have a choice – fold and crawl away, or re-invent your brand and fight back. All of these companies have seen their competition overtake them in one way or another, and are choosing to do the latter – whether in vain or not.

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They Like to Move It
When Nintendo's announced its Wii console's motion sensor capabilities, the news was received with both excitement and apprehension. Fans of the company saw the technology as a fun and unique advancement in gaming, which would simplify the experience so as to allow for a broader audience to play along. And the company ran with that praise, licensing numerous games that were geared at casual gamers of all ages – from cooking simulators to brain teasers and party games that took full advantage of the Wii controller.

Critics of the company disregarded the controller as a gimmick that encouraged a dumbed-down gaming experienced and reinforced the Japanese game-maker's position as "childish". It also brought back vivid memories of the company's failed "PowerGlove" accessory, which was launched in 1989 and used similar technology. The Power Glove is considered one of the gaming industry's biggest failures, and is the punchline for many gaming-related jokes.

Regardless, Nintendo's Wii system took a quick lead in what is known as the console wars between Nintendo, Microsoft's Xbox 360 and Sony's Playstation 3. Launching just before Christmas in 2006, the Wii has sold over 73 million units worldwide to date.

With the Wii's success, the doors were opened for Microsoft and Sony to join the pack. Microsoft will release its long-awaited Kinect addition to its Xbox 360 console in November of this year. Kinect will feature a full motion-sensing camera that will reportedly eliminate the need for controllers altogether, and is scheduled for an introductory retail price of $149 in the States.

Sony's PlayStation Move hasn't been receiving the same amount of buzz as Kinect has, but resembles the functionality of the Wii much more closely. Also using a camera and motion sensor technology, PlayStation Move is booked for launch in September of this year.

Of course, Nintendo isn't taking this newfound competition lightly. Last year, it launched its MotionPlus add-on to the Wii, which the company says increases accuracy of the Wii controller. (To learn more, see Power Up Your Portfolio With Video Game Socks.)

Make It a Blockbuster Year
Remember the days when you'd pick up a DVD from the local Blockbuster, forget to watch it for a week, then brave an F4 tornado just to avoid a $2 late fee? Well, strap in, grandpa, 'cause Blockbuster's working its way back into the market – one teenage employee at a time.

Thanks to Netflix (Nasdaq:NFLX) and On-Demand programming, Blockbuster's brick-and-mortar model fell out of favor with consumers in the mid-2000s. Though, the company did attempt to compete with the market leader, Netflix, by offering online DVD rentals through its "Total Access" program. Total Access allowed users to rent movies online, receive them by mail and return them at retail locations. But most Blockbuster franchises refused to honor this plan – and both the late fees and the lawsuits began to grow. Even the franchised locations got in on the act, claiming that the Total Access program undercut the franchise agreements that were initially made.

Though Blockbuster is far from re-claiming the crown from its virtual and warehouse competitors, the company is expanding its demographic by offering Blockbuster By Mail subscriptions to all those who haven't already moved on.

Don't Just Stare At It - Touch It
The Amazon (Nasdaq:AMZN) Kindle is the undisputed king of the e-reader world. With quick downloads and a huge library of books available through Amazon.com, that's a given. And since the company recently reported that e-books are outselling hard-copy books for the first time in history, the literature giant has absolutely nothing to fear … oh, except Apple (Nasdaq:AAPL), Sharp and Barnes & Noble (NYSE:BKS).

Mainly, this is because those companies have also stepped into the e-reader market with touch-screen devices – a feature not available on Amazon's Kindle.

Barnes & Noble's Nook, released in November, 2009, features color touch screen capabilities much like an Apple iPhone. And in January, 2010, the device won the "Best New Gadget" award at the annual Crunchies. (Beware of new gadgets, they're not always the ones worth buying. For more, read Why You Shouldn't Buy New Tech Toys.)

Apple's iPad, while not technically just an e-reader, is also providing some worthy competition for the Kindle. As most Apple products do, the iPad filled Apple stores with anxious consumers nationwide, largely thanks to its full-sized, bright touch screen.

Even Sharp is jumping into the e-reader game, when it releases two different models later this year – both using touch-screen technology.

Naturally, this has caused a case of finger envy for Amazon, and the company is reportedly releasing a touch screen version of the Kindle this year. A few months ago, Amazon purchased a company specializing in touch screen technology called ... wait for it ... Touchco. While the company recently lowered the price and screen size, and raised the contrast and speed of its current Kindle model, it's still expected that the touch version will be available within the next few months.

The Hare and the Hare
Some companies find themselves playing catch-up out of bad luck – some out of bad decisions, and some for lack of foresight. But the perseverance, even if nothing else, should be admired in all of these cases. (For more, see The Best Time To Buy An iPad.)

Catch up on your financial news; read Water Cooler Finance: Billionaire Pledges and Other Positive Press.

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