Motion Technology In Video Games

Strategic Choices

Nintendo has positioned itself to employ an emergent strategy process.  The business has been built to learn and adapt to markets as opposed to resisting change.  The designer of the Wii stated that the Nintendo DS influenced the design of the Wii, stating they wanted to focus on player interaction. Nintendo simply took the player interaction found on a smaller scale with the DS and applied to the larger Wii console.  The Nintendo Wii is also the most profitable home based game console on the market, giving Nintendo more flexibility in the short run than Microsoft and Sony.  According to Forbes Magazine, Nintendo reportedly makes a $6 operating profit per Wii unit sold.  This financial cushion gives Nintendo the flexibility to seek out new markets, while Microsoft and Sony have to worry about fixed costs.

Microsoft and Sony have taken a different road than Nintendo.  The choices made in getting the Kinect and PlayStation Move to market are not as difficult to point out.  Both Sony and Microsoft waited four years to release their take on motion technology, probably waiting to see how the Nintendo Wii performed.  The only problem with this strategy is that they gave up market share in the process.  Had they been forward thinking like Nintendo, they could have capitalized on this new-market innovation. Microsoft and Sony have released their own add ons so late because they figured they couldn’t compete with Nintendo, so they might as well as capture the remaining market share before the other does. They may have also had delayed entrance into the motion technology market because of financial reasons. Due to the higher fixed costs of the PlayStation 3 and Xbox 360, Sony and Microsoft have to rely on software sales to make up for the costs. These high fixed costs will limit the investments that the companies will be able to invest in.  They will not be able to take the chances on emerging technologies that Nintendo can.

Future Outlook

The use of motion technology in video games isn’t going anywhere.  It provides an enhanced user experience, and has created an entirely new market of consumers and games.  Nintendo has already stated that it plans to keep developing the Wii and has plans to unveil new features in the near future. Microsoft and Sony will be releasing their motion sensing add ons this year, showing their commitment to the technology.  Both companies have a decent amount of game titles to release with their new products as well. Motion technology is here to stay in the video game industry.  And it appears that there is nowhere for this new-market disruptive innovation to go but up.