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MULTI-SIDED PLATFORMS

Same pattern, but
diΩerent business model: 83
Nintendo’s Wii
PATTERNS
KP KA VP CR CS

"family"
console
console casual
casual
gamers
gamers
a gamers
access to
access to ccess to
KR console CH developers
game
game ame
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users &
devel
cheap game developersopers
cheap game
devel
develop-op-
develop-
ment costs Sony and Microsoft competed with costly, proprietary, state-of-the-art
ment costs
technology aimed at avid gamers and subsidized it in order to gain market
C$ R$ profi table share and keep hardware prices aΩordable. Nintendo, on the other hand,
profi table rofi table rofi table rofi table
p p p
hard
hard
hardware sales
hard
hardware salesware salesware salesware salesware sales
hard
royalties
royalties focused on a market segment that was far less sensitive to technological
performance. Instead, it lured customers with its motion-controlled
“fun factor.” This was a much cheaper technological innovation compared
to new, more powerful chipsets. Thus, the Nintendo Wii was less costly
Wii Focus to produce, allowing the company to forego commercialization subsi-
Nintendo’s Wii changed all this. Like its competitors, the Wii is based on a dies. This is the main diΩerence between Nintendo and rivals Sony and
double-sided platform business, but with substantially diΩerent elements. Microsoft: Nintendo earns money from both sides of its double-sided
Nintendo aimed its consoles at the huge audience of casual gamers rather Wii platform. It generates profi ts on each console sold to consumers and
than the smaller “traditional” market of avid gamers. It won the hearts pockets royalties from game developers.
of casual gamers with relatively inexpensive machines equipped with a To summarize, three interlinked business model factors explain the
special remote control device that allows players to control the action commercial success of the Wii: (1) low-cost diΩerentiation of the prod-
with physical gestures. The novelty and fun of motion-controlled games uct (motion control), (2) focus on a new, untapped market that cares less
such as Wii Sports, Wii Music, and Wii Fit attracted enormous numbers about technology (casual gamers), and (3) a double-sided platform pattern
of casual gamers. This diΩerentiator is also the basis for the new type of that generates revenues from both “sides” of the Wii. All three represent
double-sided platform that Nintendo created. clean breaks from past game sector traditions.
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