Case 1: Nintendo Disruptive Strategy: Implications for the Video Game Industry- Extended Reading

Do you remember FC console made by Nintendo , which we ever call it "red and white machine", accompanied us in our childhood.
Nintendo is a great company which never lack of breakthrough innovation. perhaps you don't remember "Virtual Boy", the name was mentioned in case1 Exhibit1: The history of Nintendo, year 1995. I think it's the first 3D game console in the world though finally it become a business failure. Nevertheless, you can see what's Disruptive technology which Nintendo always persue.

For the detail information, you can find in below link:
http://en.wikipedia.org/wiki/Virtual_Boy

In my thoughts, to compete with the WII
1. Sony or Microsoft could conside to develope the "experiential simulator," such as F16 flight simulator
2.The current video game is visual + touch, electronic games to the next generation is likely to experience the sense of smell.

Firstly, both big giants should study the game way of Wii. The new game way can bring more joy to the gamer. There are three ways to change the traditional way:

1. Multi-sense stimulus. The video game is not only the game between eyes and screen. More organs should be attracted into the game. With the help of high technology, the console can simulate many real sport situations that the gamers can not realize in the real world.

2. High-level sense experience. Even the new game way and easy game style of Wii attract many gamers, the high-level sense experience is also very important. Most information derived from sight for people, thus the high-level vision effect is also very important for the video game.

3. Network communication. As many video game companies noticed, maybe the experience derived from the successful game of Internet, the joy from game should be shared, and in this way more and more people will enter the game world.

Secondly, SONY and MICROSOFT have their own advantages.

For SONY, the high-definition video device can provide perfect vision experience. Grasping the core technology of Blue-ray is SONY’s very strong advantage. In addition, the important role in the film entertainment will bring SONY more inspiration to its game software. To be more important, the former success in the game world lets SONY have many loyal gamers, this is the most valuable treasure for the game company. Maybe, in the future, PS series console will become the media and entertainment center of family.

For MICROSOFT, the absolute king of PC OS brings MICROSOFT the best way to connect PC and video game. In addition, the strong capital can let MICROSOFT have the chance to change whole structure of video game. Considering the important role in the PC and Internet of MICROSOFT, X-BOX series console, the hardware platform of software giant, will become the smart information center of family, not only for game, but also for information communication and management.

In the end, there is a very important market that every game company should not neglect. It is the portable device game market. Some video game companies have their portable game devices, for example, the DS, and PSP, but the trend of combination of mobile phone and portable game device is absolute. In the mobile communication device domain, SONY and MICROSOFT have very strong potential, thus both companies have lager space to develop their own game business.

Sorry that I haven't read the case before i posting anything here. however, from the latest 3 posts, I don't see the reason why Ninedo failed. Should we defined the failure and can now analyze its root causes failure first? then to learn the good strategy of WII? To promote the common strengths and to avoid the common weaknesses.

Frankly, I' still confused about that Wii is a huge success and how can we find the root cause of Nintendo's failure? ):

My point is there are two angles we could look at on this case, one is Nintendo's success through its disruptive strategy, the other one is how Sony and Microsoft could improve to win more market share.
Also for Nintendo, it has much more to do to retain the current success.

According to the artical, the strategy of Nintendo is quite different from SONY and Microsoft.

Nintendo has been long realised to expand their target customer from limited teenages to “all age groups accroess different cultures" and this strategy proved to be a great success by targeting a wider audience base, ie, reach out to non-gamers ("older" adults and housewives”).

By contrast, SONY and Microsoft (esp. SONY) are more focus on High quality animations, multi funtional entertainment gamebox which also fit the buying habit of their targeting group - teenages.

I agree with Nightsky's point that Multimedia, High Quality graphic and Network will be the future three important develop trend of the industry. To beat Nintendo and back to the titleholder of the industry, SONY and Microsoft need to continue improve their product to meet these three criterias.

Emily

PPMM

I think Microsoft will win in the long term....

Leo

shall we submit the report before tomorrow or before 13:30 tomorrow?

Is wii really a success? Please forgive me doubted this conclusion, because I myself have played wii and really don’t like it. It should be simply for everyone to play, but it really take me a lot of effect to learn how to use the remote, and it doesn’t feel like real game as we play on playground without sweat, sunshine, running and crashing. On the other side ,PSP seemed to be more popular because it’s cheaper and easier to carry in our bags or even pockets, and thus convenient for us to spend time playing during waiting in line or on subway.

Highly recommend the movie "surrogate", it exactly described what I think about what’s future game like:)

you can find it here:http://www.imdb.com/title/tt0986263/

From my opinion,the key issue is that Nintendo realizes they should focus on Development of new consumer groups, not a better product technologies. Because technology upgrade had been too difficult!

Iwata is great and great minds think alike,so I rather like him!!


leon-wangchun10GA

Compared with your brilliant ideas, I admit my suggestions to SONY and MS could be too realistic:
- Leverage the trend of 3D: I've experienced the 3D TV prototype sample at the SONY Gallery couple of months before and that experience reminds me of this solution. I always imagine how exciting a true 3D game would be while I doubt if my Wii can ever achieve that...
- Develop low cost online games: I have never been addicted to any PC online games but many of my friends were. However, it would be great if I can use my console to play some short online games with friends through internet (such as CS, tennis, golf and etc). I believe this could be an unexploited market for SONY and Microsoft.
- Optimize the cost and profit: the ultimate goal of the business is the profit. While it's difficult to increase the selling price, I saw in the case that SONY and Microsoft have taken some actions to cut the cost. But there are something else they can do, such as increase outsourcing rate, optimize the distribution channel and etc.

Look forward to the team discussion

In my point of view, Nintendo's biggest success is his Wii did the similar thing with Apple's iPhone - their own and created a new field of industry and bring people to a brand new direction, it also has become a peer catch-up target. Wii's game consoles bring body induction into the living room and teases nostalgia people to recall the past scenario(like double dragon game).

Ease of play is another important factor. It is no longer a young and hard-core gamers' patent, grandpa and grandma can also find fun with kinds of simple sports games.

Wii's story has proven the facts that the gaming market isn't about having the latest technology in graphics or in sound. Affordable price and exciting feeling that Wii gives to the comsumer tell us the king to win @ A lot of fun but less money.

cayla wrote:Is wii really a success? Please forgive me doubted this conclusion, because I myself have played wii and really don’t like it. It should be simply for everyone to play, but it really take me a lot of effect to learn how to use the remote, and it doesn’t feel like real game as we play on playground without sweat, sunshine, running and crashing. On the other side ,PSP seemed to be more popular because it’s cheaper and easier to carry in our bags or even pockets, and thus convenient for us to spend time playing during waiting in line or on subway.

Dear "Killer",

It maybe not a great success to those who already been a fan of PS2 which offers high qualited graphics and high-tech and excited games. However it do grasped many brand new customers into the game battle. Nintendo has extend their customer group from traditional customer cluster - say teenages into a more huge customer base, including 20's & 30's adult and more important - the female consumer group. Wii has redefine the video game from the traditional individual game for “child" into a game who can be accept from almost all ages group. I think this is the fundamental success of Wii.

I think to win the battle in the next round or even further, Sony or Microsoft has to find a way to extend their customer base, maintain the advantage of their high-tech and powerful network products, make the product more user-friendly and attract more customers.

Good luck with your assignment:)

What a pity! I have not played such a nice game. In my viewpoint, users always want the low price and the high quanlity. But the business is not controlled by users.

Definately it's for the next round console cycle. Sony and MS definately will provide features like WILL which is no doubt. As MS gained advantanges this time for launch Xbox360 ealier than rivals. It's likely someone will copy this success.
Nintendo's crisis is how to keep innovation advance to powerful techical competitors in shortened cycle. It definately won't like to repeat the history before WII.

Just arriving home and got some opinion about Nintendo case.

Prof Ali cited one sentence from Iwata saying in PPT, the abstract of it is that, Nintendo is not fighting with MS or Sony, it is making efforts to let customers keep going on play vedeo game.

In the real bussiness situation, we are customed to battle with our competitors face to face, try best to find ways to beat them, but acctually the biggest challenge is from the changing of bussiness situation arrounding you.

Sometime, if your company's strategy does well in marketing segmentation, exploring clients' thinking and customer service, then the company can get more chances to win.

If the bussiness environment becomes tough and difficult to live in, after enterprises hard and vicious competition sometime, it would be harmful to all the companies, no one would be survive.

We have responsibilities to protect our whole environment, making it develope in virtuous track.

Above is what I want to share, and now I really have to do my case 2 report.

Some thougts after CBI course today

Iwata, CEO of Nintendo, said that "Nintendo was not competing against Sony and Microsoft, but was battling the interests of those who had no inerests in video games." To the point, Nintendo actually adopted an "passive" strategy but looks very "aggressive", because this wording indicated Nintendo's lack of confidence in developing video game traditionally and technically. In fact, Nintendo mere never admitted that he could surpass Sony/Microsoft if it did not adopt a disruptive strategy. In orther words,Nintendo simply faced a fatal question: find another way or death? its answer is clear and simply: limited innovative Wii with a impacting low price strategy. If Iwata could see the Microsoft's newest ad for Xbox360, perhaps he can really understand what an utimate innovation is and what Nintendo should head toward next?

Maybe only God knows the final result... but I just know that it is not an easy to sleep well after experincing Xbox360 ad for its amzing features!

Leng Shijie 2010960064 (10GA)

This is right, but you can not always run away to escape the battle. A good enterprise should not only focused on making profit, but also make good product.

Can you imagine a shoe company go to make mobile phone, just because it can't make good shoes?

Anyway ,Wii is a good product, and it won the current battle.
But what will happen in the future, no one knows...

lengshijie wrote:Some thougts after CBI course today

Iwata, CEO of Nintendo, said that "Nintendo was not competing against Sony and Microsoft, but was battling the interests of those who had no inerests in video games." To the point, Nintendo actually adopted an "passive" strategy but looks very "aggressive", because this wording indicated Nintendo's lack of confidence in developing video game traditionally and technically. In fact, Nintendo mere never admitted that he could surpass Sony/Microsoft if it did not adopt a disruptive strategy. In orther words,Nintendo simply faced a fatal question: find another way or death? its answer is clear and simply: limited innovative Wii with a impacting low price strategy. If Iwata could see the Microsoft's newest ad for Xbox360, perhaps he can really understand what an utimate innovation is and what Nintendo should head toward next?

Maybe only God knows the final result... but I just know that it is not an easy to sleep well after experincing Xbox360 ad for its amzing features!

Leng Shijie 2010960064 (10GA)

I totally agree with you!

It's difficult to define success based on a simple aspect.

Sales does mean something but not everthing. To me, these three companies achieved different goals. SONY, despite of the poor profit gained form PS3, managed to take the opportunity of launching the console to introduce the Blue-Ray as new generation of storage solution, as what it did in terms of PS (for CD) and PS2 (for DVD). Sooner or later each movie fan may have to buy some SONY products. It might be enough to SONY? As to Microsoft, from day one it focused on core gamers only, and the purpose of XBOX and XBOX 360 was to entertain those experinced players rather than light gamers. Didn't Microsoft fail to achieve this?

Anyway, SONY and MS will shortly release their motion based controllers, the good time of Wii may be ended.

From 2004 to 2008 , Nintendo's Wii, which from a technical standpoint is less advanced, has appealed to an entirely new customer segment, the casual gamers. The Wii has taken market share from its competitors, selling more units per month than any other console since its release. But the volume of sale of Wii has gradually reduced after 2008 since the launch of iphone. Wii obtained a flourish era on account of its absolutely new practice which shaped a new market. But real world is ruthless, rivals will promote their strategy, new entrant will crash into the market. What can Nintendo do to face the loss of resplendence?