What do Apple (s aapl), Nike (s nke) and Nintendo all have in common? In addition to leading their respective markets, they’re all turning to the fitness industry to grow revenues, some more than others.
Talk about a “new vertical.”
Nintendo, the most ambitious of the bunch, actually got its start making playing cards in 1889, before becoming a dominate force in video games 100 years later with the help of a rotund plumber named Mario. Now the company wants to whip that chubby Italian into shape, with the help of fitness Trojan horses like the release of last year’s Wii Balance Board.
“Fitness-oriented video games have been a huge success for our business,” says Tony Key, head of marketing for Ubisoft. “Given the current momentum of the fitness game category, which is the fastest-growing video game segment on the market, we believe that exergaming will continue to grow.”
Nintendo says the technology fitness craze began three years ago, with the release of Wii. “The active gaming movement has really taken off ever since the Wii Remote got people up off the couch and moving around,” says Amber McCollum, director of trend marketing at Nintendo. “Of course, the amount of activity depends on the game, but the choice is no longer between being active or playing video games, because now players can do both.”
Disguising fitness as entertainment. Clever. So just how big does Nintendo expect “exergaming” to be in five years? McCollum was unwilling to commit to a figure saying, “The entire category is still in its infancy.” But she did say, “It seems like consumers still have a strong appetite for fitness games, and people (namely developers) are excited by the potential.”
But you don’t have to look far to see the traction. As of June, Wii Fit has sold 22 million units worldwide in less than two years since its release — at $90 per pop, mind you. That’s more than Halo, Grand Theft Auto, and even Nintendo’s own Mario, at almost twice the price per copy. Other publishers like Ubisoft are benefiting as well. Last week, Electronic Arts announced that it had sold an impressive 1.8 million copies of EA Sports Active in just three months, one of its fastest-selling games in recent years.
But exergames are just one part of the equation. Four months before the release of Wii, and halfway across the globe in Oregon, Nike launched Nike +, a pebble-sized piece of plastic that is inserted or attached to the laces of running shoes, to log the distance, pace, time, and calories burned. “After observing the number of runners listening to music, it was a natural fit to bring this type of product to the marketplace,” a Nike representative tells me. “With almost 2 million users worldwide (and growing), we’ve already seen strong demand in the market.”
To further expand its foray into fitness, the company overhauled the Nike+ web site to behave more like Facebook this summer, and it’s released a bevy of Nike+ line extensions, including apps for both Facebook and iPhone, an updated SportsBand, and new data-tracking products for the gym.
Apple obviously takes a more indirect approach with its involvement of fitness, approving iPhone fitness applications and partnering with Nike in the production of Nike+ to work with iPods. Cupertino hasn’t said how well the fitness category has performed. And it’s unclear what the revenue split is between Nike and Apple. But it’s obvious that both multinationals are believers in the segment.
And more products are on the way. Nintendo is launching the sequel to Wii Fit later this year, followed by the curious-looking Wii Vitality Sensor in 2010. It looks like a finger monitor and senses a user’s pulse and other signals being transmitted by the body. (Crazy, I know). Ubisoft, EA, and other software makers are coupling their current and future products with hardware as well, in an effort to make exercise less monotonous and easier to keep tabs on.
But while technology fitness is booming, not everyone wants to exercise, shedding doubt on how big the new vertical can grow. To underscore this point, only one of my 2,000-plus Gmail contacts have created a Nike+ account, whereas over a thousand of my contacts are on Facebook.
What’s more, fitness purists argue there are no shortcuts when it comes to shedding pounds, even with the help of technology. “I never use or endorse these kinds of programs,” says Frankie Rongo, an admitted “old school” fitness trainer and author from Seattle. “Fitness is about eating correctly, lifting correctly, doing cardio correctly — and most importantly, applying those to a never-ending lifestyle.”
Photo courtesy of Nintendo.