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nintendo’s wii

                                                         KP               KA              VP              CR              CS


                                                                              state of
                                                                            the art chi
                                                                            development

                                                               game                       high end console                 narow market
                                                            developers                     performance &                   of “hardcore”
                                                           off-the-shelf   KR                graphics     CH                  gamers
                                                             hardware                         motion                       large market of
                                                            component                       controlled                     casual gamers &
                                                          manufacturers                       games                           families
                                       eliminate                          n                group (family)                 game developers
                                                                                            fun factor &
                                                                          new proprietary ew proprietary
                                                                            technology
                                         reduce                             technology       experience     distribution
                                                                                                               retail
                                                                          motion control
                                         create                           motion control
                                                                            technology
                                                                            technology
                                       unchanged
           230
                                                          C$       console production price       R$        profi t on console sales
                                                                technology development costs                  console subsidies
                                                                      console subsidies                 royalties from game developers


               We’ve discussed Nintendo’s successful Wii game console   performance, graphic quality, and game realism: factors      Nintendo’s new business model has the following
               as an example of a multi-sided platform business model   valued primarily by diehard gaming fans. Nintendo   characteristics: A shift in focus from “hardcore” to casual
               pattern (see p. 76). Now we look at how Nintendo dif-  shifted its focus to providing a new form of player interac-  gamers, which allowed the company to reduce console
               ferentiated itself from competitors Sony and Microsoft   tion targeted at a wider demographic than the traditional   performance and add a new element of motion control
               from the standpoint of Blue Ocean Strategy. Compared   avid gamer audience. With the Wii, Nintendo brought   that created more fun; elimination of state-of-the-art
               to Sony’s PlayStation 3 and Microsoft’s Xbox 360, Nin-  to market a console that technologically underperformed   chip development and increased use of off-the-shelf
               tendo pursued a fundamentally different strategy and   rival machines, but boosted the fun factor with new   components, reducing costs and allowing lower console
               business model with Wii.                  motion control technology. Players could control games   prices; elimination of console subsidies resulting in prof-
                  The heart of Nintendo’s strategy was the assumption   through a sort of “magic wand,” the Wii Remote, simply   its on each console sold.
               that consoles do not necessarily require leading-edge   through physical movement. The console was an instant
               power and performance. This was a radical stance in an   success with casual gamers, and outsold rival consoles
               industry that traditionally competed on technological   focused on the traditional market of “hardcore” gamers.







          !"#$%&'(%)*+(%,,---.53                                                                                                      /012013---2482-67
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