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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.
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