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39 Comments
- Gundabad, on 10/12/2007, -4/+38I had recently read through this book, and was surprised to read through this article and see how closely Nintendo's strategies fit with what is described in the book. The main point is the difference between sustaining and disruptive technologies, and how the company which is on top cannot depend on niche markets to generate revenue, leaving themselves open to failure if smaller companies provide unexpected innovation.
The primary and best example is the disk drive industry, mentioned in the article as well. The leading manufacturers of mainframe disk drives were continuously pushed by their customers to create high stores capability. However, the pace of technology outpaced the consumer demand. The leading companies were aware of smaller drives selling in the PC market, but selling products in that market would only provide a small revenue stream due to its small size. History continuously repeats itself, and soon as technology sped along in the PC drive market, they became so large that they were suitable for mainframe storage. By time the leading companies switched over to smaller physical drives, they were also-rans compared to those who had been making smaller drives for years.
I know that the majority of people on digg have HD sets and are hungry for better graphics, but I truly believe that Sony has overshot the total consumer demand. It will not be a failure, as they have listened to exactly what their core customer base wanted in a system, but they have left themselves wide open to be overtaken at first place by an innovative console such as Wii. Just as PS2 was disruptive by becoming the first "box for the living room", and the DS has already edged out PSP with gameplay over graphics, I think the gaming market is ripe for disruption. - celticelve, on 10/12/2007, -4/+33I also know Reggie has stated on several occasions that Nintendo has been looking at Apple products as major influences. Just look at the iPod and DS Lite next to each other, they could easily have been from the same company the are so a like in design. I think the bigger game companies are missing what we are talking about here.
The iPod is the perfect example of disruptive technology, Steve Jobs often says how its more about making someone buy something they never knew they needed. The Wii has the potential to break into the mainstream and have people buying gaming consoles that have never had one before. The first Nintendo Entertainment System did that. It took something that was a niche market before and sold it to the masses.
Another example would be World of Warcraft. Before WoW, MMORPGs had subscriber counts that rarely broke 500,000 users. WoW came forward with a game that wasn't as deep and turn-based as the others, but focused on playing in groups and story-line. Last I checked, WoW was reaching 8 Million Subscribers.
Sure the PS3 or Xbox 360 could easily win the gamer market, but at quick Google that is only 40 percent or less of American homes. Nintendo knew they could never win that war, they tried with N64 and Gamecube and almost lost their console division, so they decide to focus on something I strongly believe Sony has all but forgotten, FUN. In the end we play video games for one thing FUN. If have crummy gameplay and amazing graphics, watch a movie.
Now If I could only freeze myself. - Ralphy, on 10/12/2007, -4/+17More darryl242 SPAM - YAY! Tasty...
- rhesuspieces00, on 10/12/2007, -1/+12Thats not true, suprisingly. There has certainly been plenty of Wii spam in recent weeks (and xbox360 spam, and apple spam, and zune spam, and PS3 spam...), but this article actually contributes a lot to the conversation that hasn't been said by the miriad bloggers giving us the top ten reasons the Wii is going to pwn the competition.
My suspicion is you didn't actually read the article, or any of the comments about the article. You just saw "Wii" in the title and saw it as an opportunity to flamebait the Wii fanboys. - Toloran, on 10/12/2007, -0/+6You have to keep in mind that just because a piece of technology is disruptive it doesn't mean it is going to be successful. A combination of bad timing, bad marketing, and poor supplies can affect this (among other reasons).
- Gundabad, on 10/12/2007, -1/+7I am studying disruptive technology in grad school, and we have discussed the iPod. There was some debate among other student whether it qualified or not. To truly be disruptive, its improvements would not be in areas that the core market of previous mp3 players were asking for. We couldn't reach a consensus as to whether the community was really asking for a program like iTunes to come along, or whether it just sort of fell in our laps and people loved it. However, I think iPod did make itself disruptive by putting itself out there as an easy-to-use fashion accessory that plays music, rather than a superior mp3 player marketed to the tech community.
- PFS1, on 10/12/2007, -1/+7darryl, screw off. Just screw off. This article an interesting, timely, and well-thoughtout piece of analysis. It's also a welcome breath of fresh air from pics of air vents and scanned manuals.
The promotion of this kind of material is what digg is all about. It bring interesting information and opinons to the masses whereas it would otherwise go and unseen, and you have no idea how much it bugs me that idiots like you are running around, making stupid, useless comments like that- and most likely burying the story, too- just because you don't like the subject.
So if you don't like it, don't bother posting. I have had it with people like you. Stop ruining digg, for *****'s sake. - quamb, on 10/12/2007, -1/+6True, though people time and time again seem to forget Nintendo are actually quite profitable and successful in their own right - not exactly the underdog/small/failing company people percieve them to be.
This image only exists as sitting next to giants such as Microsoft and Sony can make any company look "small".
Just a side note for example-
World Wide Sales (previous gen)
PlayStation 2: 111.25 Million
Game Boy Advance: 76.79 million
Xbox: 24 Million
GameCube: 21.20 Million - rhesuspieces00, on 10/12/2007, -0/+5The title is a bit inaccurate. I'm not burying, because I like the article, but the author basically says he DOESN'T think the Wii is going to succeed in disrupting the console industry. He thinks the DS will.
- washingtonydc, on 10/12/2007, -0/+4Which is a great point that I hadn't pondered before--in the last two years, the DS has become my number 1 gaming system, and I don't seem to be alone. It is still sells out frequently in Japan and even here in the states I see plenty of non-traditional gamers playing DS Lite on the metro.
Some would say the the original Gameboy did this as well, however I believe you can easily distinguish between the two: non-traditional gamers were playing Tetris, not the GB. However with the DS there is no one software title driving sales--it's rather a panopoly of easily accessible titles coupled with a fresh hardware design that draws new gamers in.
I, for one, welcome our new handheld overlords. - dracula7, on 10/12/2007, -0/+3Simply saturating the market is not causing disruption. The N-Gage didnt offer anything more than the competition
- javip, on 10/12/2007, -0/+3I guess logic isn't one of your strong points
- Mootabolife, on 10/12/2007, -0/+3All you need is one niche on which to base your company off of. Just keep easing the consumer into your point of view. The ipod started as just a music player with a cool interface, then moved into a portable music library, now a video player. People really don't know what they like until they're given an opportunity to try it.
I think Apple maybe slowly turning normal people into tech junkies like us here. Thanks. - cogsprocket, on 10/12/2007, -0/+3Miyamoto would be a better fellow to study.
A good read is "Power Up" by Chris Kohler. Chris writes a lot about how innovative Miyamoto's designs are and the amount of emphasis he puts on interface and usability. - rhesuspieces00, on 10/12/2007, -1/+4they don't have to. thats kind of the point. no one suddenly crushes a multi-billion dollar comapny. they just have to see where the industry is heading, and be nimble on their feet. Apple still makes up a small marketshare as far as the total number of computers in use are concerned, but each quarter they take up a higher percentage of the number of computers sold, especially notebooks. Whats possibly more important, is that the rate at which their share of sales is increasing is accelerating, not tapering off. Apple isn't going to overturn any monopolies in the next year or two, but if things continue for the next 5 years the way they have for the past 5 years, Microsoft (and more over) Dell, will have a lot of reason for concern.
- Gundabad, on 10/12/2007, -1/+3You are both right in that the N-Gage has disruptive characteristics, but that doesn't always mean it will succeed. The N-Gage had a lot of potential, but maybe if you didn't look like such a tool when you actually had to call someone it would have lasted more than a few months.
http://www.sidetalkin.com/
It was eventually re-designed, but its very hard to fix a trashed reputation - Miyazaki, on 10/12/2007, -0/+2But no one wanted that.
- Gundabad, on 10/12/2007, -1/+3I actually noticed that a few moments after submitting this article. He seems to think both Wii and DS are disruptive, but that DS is the true successor. I think he is wrong though about portables unseating consoles because of their portability, because of the simple fact that portable systems have been around forever. The DS is no more portable than the PSP or an SP is, it is the unique gameplay that separates it. Therefore, I believe Wii & DS are more of a combined disruptive force. There is enough room in this world for both consoles & portables to play.
- dadioflex, on 10/12/2007, -1/+3Is it just me or do the first few comments to this appear to be like typical book back cover blurbs describing how fantastically insightful the content is?
What does "Reggie" have to do with the high end Japanese decisions anyway?
Don't get me wrong, it's a good article but it's being promoted like an Enron executive. - ZenMojo, on 10/12/2007, -2/+4Because we know how Apple is absolutely destroying Microsoft....
- BuiltToday, on 10/12/2007, -0/+2The real issue here is that Handheld systems, no matter how advanced they become, are nowhere near ready to "take over" the world of mainstream gaming. Granted, the Nintendo DS is a great way to kill time, but people want a place to go to play video games. It's a comfort issue. Why do we have living rooms in the first place? Even with the advanced multiplayer functionality, it's much less of a shared experience to have every player staring at their own game rather than being attached via umbilicus to a central focus of attention. Even sitting next to someone and playing Metroid Prime with them, it almost feels more like playing over the internet than hanging out with a friend.
- surumunk, on 10/12/2007, -1/+3this should be discussed more than any other article in the past week.
- AnthonyJr, on 10/12/2007, -1/+2great digg.
- zetsurin, on 10/12/2007, -1/+2I think the term is actually Defective Mentality, colloquially known as Fanboyism. It's when people worship everything Nintendo does even when it is clearly sub par. There are a lot of lost souls on Digg who would gladly lap at the balls of Nintendo execs if offered a chance.
For the people who can't see beyond their motes: Nintendo had 100% of the handheld market. Now they have 60-70%. Actually, in reality in some markets they are much closer to being down to 50%. It's actually Sony that stole market share off them. You might not like to admit that, but the facts are there. - djSyndrome, on 10/12/2007, -2/+3Maybe not in the OS arena, but have you ever heard of a little device called the iPod?
- NiX0n, on 10/12/2007, -2/+3http://www.duggmirror.com/
- inactive, on 10/12/2007, -0/+1Or maybe it's just a case of a) consoles being bought mainly by parents who don't want to spend an arm and a leg on their kids entertainment, and b) Nintendo spending well over $100M to create hype.
- undersky, on 10/12/2007, -1/+2Even you are been dugg down, you are not alone bro, I too doubt handhelds will replace living room consoles. I think Wii will be a success because no one else is better poised than Nintendo to introduce a "disruptive technology" product.
A very good example of this is the "Southwest Effect"
http://en.wikipedia.org/wiki/Southwest_airlines#The_Southwest_Effect
In a very similar way Southwest Airlines turned into the most profitable airlines in America by capitalizing on unexplored market, namely "when an innovative company enters a market, the market itself change." - undersky, on 10/12/2007, -0/+1"A fantastic read!"
"Two thumbs-up!" - dracula7, on 10/12/2007, -2/+3His argument is stupid. Nintendo has dominated the portable gaming market for many, many, many years.
- Gundabad, on 10/12/2007, -1/+1I have also read Power Up and would highly recommend it to anyone that enjoys video games. It has great sections on the history of video games, Miyamoto, the evolution of RPGs, music in video games, and more
- nazsco, on 10/12/2007, -1/+1and nintendo is such a small company...
- zetsurin, on 10/12/2007, -2/+2Yep, more stupid Wii spam and as usual it's empty conjecture and a far reach beyond reality.
- Barryke, on 10/12/2007, -2/+1@guamb,
Where are you from? Over here Nintendo is certainly not considered an underdog. They defined (and continued to mutate) the market. Sony rather would fit the description better. Xbox360 is quite poplar here, but the PS3 never will.
- The Netherlands - surumunk, on 10/12/2007, -1/+0handhelds compete with consoles.
- daridave, on 10/12/2007, -2/+1Great read. I totally agree -- it's sort of what I keep trying to tell my friends, but I lack the right vocabulary to "not sound like a fanboy", which I guess does suck for me, ehe.
Nice find. Digged. - cogsprocket, on 10/12/2007, -5/+2What does Reggie have to do with it?
- Loonacy, on 10/12/2007, -8/+3By this logic you might expect something like the N-Gage to topple Nintendo's stranglehold on the handheld market.
- inactive, on 10/12/2007, -41/+4More Wii SPAM - YAY! Tasty...
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