Posts Tagged ‘Nintendo Wii’
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.
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.
Who Is It Made For?
The Wii was created to reach nonconsumers. To reference the book Seeing What’s Next by Clayton Christensen, nonconsumers can be identified as “people who lack the ability, wealth, or access to conveniently and easily accomplish an important job for themselves.” Although there were already other video game consoles on the market, such as Sony’s Playstation and Microsoft’s Xbox consoles, neither of these gaming systems provided the low price point or experience that the Nintendo Wii did. The Wii was released in the United States in November of 2006 at a price of $249.99. This entry level price point was substantially lower than the $499 and $299 price tags of the Playstation 3 and Xbox 360 respectively. The cheaper price solves the issue of nonconsumers not being able to afford a next generation gaming system.
But what about the consumers who lack the ability or desire to learn to play the Playstation 3 or Xbox 360? The Wii solved that as well by introducing motion technology as the core gameplay functionality. Playing video games became intuitive for these consumers, as making the onscreen character complete certain actions was as easy as doing it in the real world. If they were playing a golf game, they could simply swing the Wii Remote like a golf club. Playing a boxing game? Simply punch like a boxer. These consumers who avoided playing video games because of their complicated button mashing nature now had a console worth purchasing. They weren’t simply playing a game, they were a part of the game. These consumers were not consuming because pressing buttons did not interest them. Nintendo found a way to get these nonconsumers involved in the gaming experience through the use of motion technology.
Signals of Change
According to Christensen, there are two Signals of Change for a new-market innovation: 1) Product/service that helps people do more conveniently what they are already trying to get done; 2) Explosive rate of growth in new market or new context of use. The Nintendo Wii and its use of motion technology certainly help gamers play more conveniently. Swinging the Wii Remote to create onscreen actions is more intuitive than simply pressing buttons. It makes more sense to swing the Remote like a golf club as opposed to holding and releasing the X button on a controller.
To expand on the second signal of change for a new-market innovation, the Wii had explosive growth due to new consumers purchasing the console. The Nintendo Wii is still the best selling next generation console available on the market today, steadily outselling the Playstation 3 and Xbox 360. Why? Because it offers a truly unique experience through motion technology. My mother would like to purchase a Nintendo Wii despite never being interested in video games. Why? Because she isn’t just pressing buttons. She is able to be involved in what happens on the screen through her own actions. There are millions of consumers just like her, who thanks to Nintendo’s innovative use of motion technology, want to own a video game console for the first time.
The Nintendo Wii is a home based video game console that uses motion sensing technology as it’s core input system. The Wii system comes with two devices: the Wii Remote and the Nunchuk. These two devices are at the center of the user’s experience.
The Wii Remote is the primary controller for the console. Its wireless capability enables it to be used as a pointing device and allows users to swing it freely for in game use. The Wii Remote detects movement in three dimensions thanks to built in accelerometers and infrared sensors that connect to the Sensor Bar that also comes with the system. If the Remote’s sensors are out of range of the Sensor Bar, the Remote will not be as accurate or responsive.
The Nunchuk is a secondary device that plugs into the bottom of the Wii Remote. Unlike the Remote, the Nunchuk is not required for all games. The Nunchuk includes a joystick and a trigger button on the back of the device. Typically, the device is used for games that are more complex and feature heavy. The game that comes with the system, Wii Sports, is not very in depth, and typically only requires use of the Remote to execute commands. But for a game that is more realistic, like EA Sports Madden Football games, the user will use the Wii Remote to throw the football, and the Nunchuk to move the player on the field.
What Kind of Innovation Is the Wii?
The Nintendo Wii is a new-market disruptive innovation. Prior to its introduction in November of 2006, video game gameplay was regulated to button mashing. The Wii revolutionized the industry by successfully implementing motion technology as the foremost way to play games. Consumers were able to have an impact on the onscreen actions by moving the Wii Remote and Nunchuk as opposed to only pressing buttons. Christensen states that “new-market disruptive innovations lack the raw functionality of existing products but bring new benefits such as convenience, customization, or lower prices.” The Nintendo Wii fits this mold, as it has significantly less power and lower graphics than the PlayStation 3 and Xbox 360. But it succeeded despite its limitations because it offered something that its competitors did not up until recently: motion technology. Nintendo realized that there were consumers out there who weren’t interested in playing video games because they weren’t interactive enough. They found a way to get these former nonconsumers consuming, changing the entire video game industry in the process. Nintendo’s use of the disruptive technology was so successful that Sony and Microsoft came out with their own versions of motion technology for their respective consoles in an attempt to boost sales.