Nex Playground Capitalizes on a Crucial Industry Oversight

The gaming industry is currently grappling with an affordability crisis, where hardware costs are too high to foster a healthy growth in audience, while software prices are often too low for many games to turn a profit. This has resulted in a precarious situation where gaming is simultaneously too expensive for many consumers and too cheap for the industry to sustain itself. However, every crisis presents opportunities for agile and innovative companies to capitalize on. The affordability crisis is no exception, as it creates avenues for companies that think differently about their audience and products to thrive. A fascinating data point recently emerged, showing that the Nex Playground outsold the PlayStation 5 in the US market, coming in second only to the Switch 2. The Nex Playground is a gesture-controlled console with a camera, essentially the successor to Microsoft's Kinect and Sony's EyeToy. It is designed specifically for families with young children, offering a curated set of games, including popular licensed properties, at an affordable price point. The console's success stems from its focus on a market that major platform holders have abandoned. By targeting this neglected market, Nex Playground has inherited not only the technological concepts of its predecessors but also their audience. When console manufacturers ceased to reduce prices over time, they essentially gave up on the low-cost market segment. Few families are willing to invest in expensive consoles and games for their pre-teen children. As a result, genres like dancing games, singing games, and mini-game collections have dwindled. However, the demand for these entertainment experiences still exists. Nex Playground's genius lies in adopting Nintendo's approach of building affordable devices using dated hardware and applying it to a neglected market segment. The affordability crisis has a flip side: the abundance of low-end hardware that is cheap and capable of maintaining a smooth framerate in casual games. The challenge lies in developing good-quality software that can take advantage of this hardware. Nex Playground has succeeded in the kids' market, and its strong word-of-mouth among parents suggests it has a promising future. The company's strategy may not be replicable, but it highlights the opportunities available to companies that can creatively address the industry's blind spots. By looking at the crisis with the right perspective, companies can turn it into an opportunity.