Motion Technology In Video Games

Posts Tagged ‘Xbox Kinect’

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.

Here is an analysis of each company’s resources, processes, and values.  Or as Christensen calls it, The Tale of the Tape.

Nintendo

Sony

Microsoft

The Sword and the Shield

Identifying Asymmetries of Motivation and Skills

Identifying Incumbent Response Strategies

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.

Overview

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.