Posts Tagged ‘Project 1’
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 Microsoft Kinect was made for undershot consumers. Undershot consumers are consumers “for whom existing products are not good enough.” They will “consume a product but are frustrated with its limitations.” like the PlayStation 3, customers who purchased an Xbox 360 wanted powerful hardware and superb graphics. The Nintendo Wii, released in 2006, provided a new experience but not enough power and capability. The Xbox 360 and PlayStation 3 also failed to provide the motion technology utilized by the Wii, limiting the user experience to traditional button controllers.
These undershot customers may have wanted the motion capability provided by the Wii, but not enough to sacrifice hardware performance. These consumers had no options under these circumstances. Now that the Kinect is awaiting release this winter, these undershot customers can have the motion sensing technology of the Wii, PlayStation Eye, and the hardware performance of the Xbox 360. These customers don’t mind paying the $149.99 on top of what they paid for the console for the added features. However, the Kinect’s controllerless nature is so hands off that it remains to be seen whether even undershot customers will want to purchase it.
Signals of Change
As discussed before with Sony, the signals of change listed by Christensen for sustaining up-market innovations are: 1) New, improved products and services introduced to existing customers; 2) Integrated companies thrive; specialist companies struggle. The Kinect easily fits the first signal of change listed by Christensen. The Xbox Kinect is a new and improved product introduced to existing Xbox 360 customers. It is not a standalone console like the Nintendo Wii, but an add on. Therefore, only existing Xbox 360 users can utilize the Kinect’s added features.
The second signal of change focuses more on the company as opposed to the product. Microsoft and Sony were essentially on opposite sides of the fence in regards to issues related to their gaming consoles. While Sony struggled with the software aspect, Microsoft thrived. It had more big name titles for immediate release and a well designed online community. Not surprising since Microsoft is a software company and Sony is a hardware company. Where Microsoft dropped the ball was with the hardware. Many users encountered what was named the “red ring of death.” The red ring of death resulted when the console would overheat for seemingly no reason, creating a red color around the power button. Although Microsoft has made improvements to the durability of the Xbox 360, users are still reporting overheating as an issue despite a product refresh this year. Like Sony, Microsoft is on the path to greater integration, actively working on its shortcomings to become a more complete company in the video game industry.
Kinect for Xbox 360 is a “controller-free gaming and entertainment experience” by Microsoft for the Xbox 360 console. Kinect is similar to the Sony PlayStation Eye camera, detecting user input without the need for a controller. It enables users to control and interact with the Xbox 360 by using gestures, spoken commands, or given objects.
What Kind of Disruption Is the Kinect?
Since the Kinect is similar to the PlayStation Eye and Nintendo Wii technology, it can be considered an up-market sustaining innovation. It isn’t introducing new technology or technological uses. Like the PlayStation Move, the Kinect is an add on to an already existing console. You must already own an Xbox 360 in order to use the Kinect, whereas the Nintendo Wii was a standalone console with motion technology introduced from the very beginning. Since an up-market sustaining innovation improves on an already existing technology, the Kinect for the Xbox 360 can be classified as an up-market sustaining innovation.
Much like the Move again, the Kinect will not revolutionize the video game industry like the Nintendo Wii. It will simply add to the existing user experience. However, it remains to be seen how Microsoft will use the technology its traditional games since there is no controller as with the PlayStation Move. For now, the Kinect adds additional features to existing users if they are willing to pay for it.
Who Is It Made For?
The PlayStation Move was made for undershot consumers. Undershot consumers are consumers “for whom existing products are not good enough.” They will “consume a product but are frustrated with its limitations.” Customers who purchased a PlayStation 3 wanted powerful hardware and top notch graphics. The Nintendo Wii, released in 2006, provided a new experience but not enough power and capability. The PlayStation 3 and Xbox 360 also failed to provide the motion technology utilized by the Wii, limiting the user experience to traditional button controllers.
These undershot customers may have wanted the motion capability provided by the Wii, but not enough to sacrifice hardware performance. These consumers had no options under these circumstances. Now that the PlayStation Move has been released, these undershot customers can have the motion sensing technology of the Wii and the hardware performance of the PlayStation 3. These customers don’t mind paying the $99.99 on top of however much they paid for the console for the added features.
Signals of Change
The signals of change listed by Christensen for sustaining up-market innovations are: 1) New, improved products and services introduced to existing customers; 2) Integrated companies thrive; specialist companies struggle. The PlayStation Move easily fits the first signal of change listed by Christensen. The Move is a new and improved product introduced to existing PlayStation 3 customers. The Move is not a standalone console like the Nintendo Wii, but an add on. Therefore, only existing PlayStation 3 users can utilize the Move’s added features.
The second signal of change focuses more on the company as opposed to the product. Sony struggled initially after its launch of the PlayStation 3 due to its extremely high price point and limited game selection. Many customers simply opted to buy the Xbox 360 since it was considerably cheaper, had nearly the same performance and features, and had a much larger game selection. The Xbox Live feature did not do Sony any favors either. Microsoft had a better idea of how to handle the software and internet aspects of the console because they are a software company. Sony, on the other hand, is a hardware company. It’s online community is still not as competitive with the Xbox’s, but it’s better than what it was the first few years of its release. The online network is less buggy and offers more downloadable content. Now that Sony has cut its prices significantly and upgraded its online offerings Sony has become a more integrated company, and has positioned itself to better compete upon the release of the next round of next generation consoles.
PlayStation Move is a motion-sensing game controller for the Playstation 3 video game console by Sony. The Move functions much like the Wii Remote and Nunchuk. Whereas the Wii uses a sensor bar to track the movement of the Remote and Nunchuk, the Move uses the PlayStation Eye camera to track the controller’s position. You simply move the controller within range of the PlayStation Eye camera to control the action onscreen.
What Kind of Innovation Is It?
I have chosen to separate the Sony PlayStation Move from the Nintendo Wii with good reason. The Nintendo Wii was the first console of kind upon its introduction in 2006. The PlayStation Move, however, was just released this year, a full four years after the Wii. The Move is different from the Wii in the sense that it is an add on, where as the Wii is fully powered by motion technology. Therefore, the Sony PlayStation Move cannot be classified as a new-market disruption like the Nintendo Wii. The Move is simply a sustaining up-market innovation. Christensen classifies sustaining up-market innovations as those that “make good products better.” As an add on to an already powerful piece of hardware in the PlayStation 3, the Move adds another dimension to the user experience. This addition caters to consumers who wanted the power of the PlayStation 3, but liked the use of motion technology on the Nintendo Wii. For these users, the Wii did not provide enough power, high quality graphics, or game selection that the PlayStation did.
Christensen also states that “incremental sustaining innovations tend to influence an industry less dramatically” than their new-market innovation counterparts. This holds true for the PlayStation Move. It has not implemented anything not seen from the Nintendo Wii, but it does improve on the accuracy of the motion sensing technology. Sony knows that it will not be able to compete with Nintendo on party games and the casual gaming experience. But Sony can succeed by expanding on the experience its powerful hardware already provides with the PlayStation Move. Nintendo may have invented the wheel with the Wii. But Sony can certainly improve it with the Move.
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.
The goal of this blog is to provide an analysis of motion technology in video games and how it is changing video gaming as a disruptive innovation. Motion technology in video games has become the latest craze in the industry thanks to the breakout success of the Nintendo Wii. Players are now directly connected to the games they are playing, as opposed to simply pressing buttons on a controller.
I will devote extra attention to the Nintendo Wii since it was the first console to use this technology, and it uses it in a different way than Sony and Microsoft do. It is much easier to explain and understand motion technology used in these consoles by examining them in a system by system context. As such, I will analyze the use of motion technology with the Wii, and then separately analyze the use of motion technology with the PlayStation Move and Microsoft Kinect. The separation makes sense, as Microsoft and PlayStation compete more with each other on a product basis, whereas they compete with the Wii on an industry basis. I will explain this in further detail in the competitive battles section.
I will be analyzing what kind of disruption this technology brings to the video game industry, as well as the impact on customers. When it comes to competitive battles, I will focus on the Nintendo Wii, Sony PlayStation Move, and Microsoft Kinect. Although all three use motion sensing, they cater to different customer groups and serve different functions. Finally, I will look into what led to the creation of this technology and its future in the industry.