Nintendosolophy - Changing the rules of war

[Duncan]

"War, what is it good for?" Some may recall this line from a popular song produced back in the day. However, the question posed is still relevant. Despite the harsh nature of war, it's a topic that seems to be etched into the minds of numerous people. Why? Because a strange level of entertainment exists amongst the brutality prevalent in the activity. For example, note the extensive amount of World War II video games currently on the market and how well a number of them have sold; those pieces of information alone should provide a general indication of how popular war can be. However, there's another war that brews, in quite a public fashion for that matter. Gamers know it all too well as the 'console war.'

The console war has existed since the dawn of, well, consoles. The rivals may be interchanged and the power may switch hands, but the visceral excitement of the battle always draws a crowd. The engagement between Nintendo and SEGA in the '90s is one that immediately comes to mind, with each company's mascot and their individual armies of rabid fans continually pummeling one another with insults and high scores. In the generation following, the war introduced the notion of a third contender in the form of Sony's PlayStation. Well, it's the old adage, three's a crowd; for Nintendo and SEGA's rivalry started to wane, and the battle slowly started to shift to one between Nintendo and Sony. That particular generation was one which consisted of a great change of hands, with many fan bases shifting and conglomerating in every camp. Ultimately, Sony 'won' that generation with the sheer volume of PlayStation consoles sold, but Nintendo and SEGA, although bruised, were not willing to accept defeat so quickly. Of course, the direction each company took varied, with SEGA attempting to launch a more powerful console ahead of the pack to garner an early lead. Sony and Nintendo opted to wait and watch patiently, with Nintendo quietly allowing its 'Dream Machine' (the Nintendo 64) to finish its course and die a natural death.

So a new generation began. SEGA launched the Dreamcast and eager fans had high hopes that their loyalty would pay off in full. In some regards it did, for the Dreamcast played home to numerous games that are today considered classic and memorable titles. Unfortunately for SEGA, Sony, the shrewd marketing power that it was and still is, stopped the Dreamcast dead in its tracks with the launch of the PlayStation 2, leaving SEGA with little choice but to accept defeat. It's true; war strategies, no matter how effective, can often be rather gruesome.

With Dreamcast gone, two competitors remained: Sony and Nintendo. However, with the launch of Microsoft's Xbox, it became quickly apparent that the battle would not resort back to a duel between two major opponents. The newcomer managed to perform better than expected and, due to the already present rivalry between Sony and Microsoft, a new console war began. Not that Nintendo didn't try to put up a fight; the company was just rather bruised from past engagements and was trying to get by as it regrouped and attempted to alter its strategy. Regardless, the fans and press alike thirsted for the spilled blood of a new console war, and their thirst was justly quenched for a time. Now the focus falls on the coming generation. The contenders are known, the specs have been studied, and the blood-thirsty fans are gearing up for the fight of a lifetime. Sony and Microsoft are bent on destroying one another and the public wants to see a victor.

Wait, but what about Nintendo?

Nintendo has stated many times that it does not wish to get involved in a new console war. The company has reiterated time and time again that it is taking a different approach, one that differs quite radically from its head-bashing competitors. But surely Nintendo realizes that as long as the their new console resides on the same shelf as the PlayStation 3 and Xbox 360, the public is going to expect the Revolution to fight the good fight, right?

Nintendo, more likely than not, knows the situation all too well. The company's goal? To merely rewrite the rules of engagement. A simple task, no?

The GameCube, in many ways, could be considered a transition console; a machine caught in the midst of internal corporate vicissitude. As efficient as it was, the GameCube was not well enough suited for combating the ominous threat of its competitors. Yet, Nintendo (and by that I mean Nintendo President Satoru Iwata) knew that what was most vital was surviving long enough to enact its revamped strategy. Wanting to test the waters, so to speak, Nintendo launched the DS, a handheld that would pave the way for the company’s efforts of attracting a much larger army by being different from anything else on the market. Of course, with the launch of the PSP, the war spread to the handheld market, probably more so than any time in the past, but not to Nintendo's dismay. Granted, it may have been what they were hoping for all along. Despite Nintendo's consistent response concerning the non-comparable attributes of the DS and PSP, I'm going to hold that Nintendo wants the two to engage in battle. Why? Ultimately because it acts as a demonstration of the effectiveness of Nintendo's war strategy as well as provides an indication of how well the same tactics will carry over when the next-generation consoles take their places on the battlefield.

It's a rather craft and daring plan. Nintendo is still technically at war with Sony and Microsoft, even though many in the industry tend to ignore the house that Mario built. Of couse, ignoring Nintendo because of some recent shortcomings could be deemed a display of poor strategizing. Sony and Microsoft aim to engage in a skirmish using only the existing level of troops. However, they fail to see that Nintendo is not leaving the battle, but amassing a more sizeable army, composed of those people who are currently intimidated by the brutal nature of the war. Nintendo is extending its hand to all those interested in joining their operation, from the battle-hardened hardcore to the wary non-gamers, and eliminating many of the intimidating barriers of entry in the process. For those aforementioned gamers, Nintendo is offering them a fresh start, with many of the company's mascots riding in on beautiful new stallions to help lead the charge. For the non-gamer, Nintendo is providing a loving hand of acceptance and patience while they adapt to the new environment. For the casual gamer, Nintendo is installing the market benefits to joining, such as a lower price point and cheaper games; in other words, a good deal of game-related bang for their buck.

What occurs if Nintendo's approach doesn’t perform as well as hoped? Well, thanks to the soundness of the company’s financial molding, Nintendo could live, and possibly thrive, on its own little piece of land at the edge of the battlefield. However, there's little reason to think the strategy wont work; just look at the DS, Nintendo’s front man. The handheld's performance is a helpful indication of how Nintendo's strategy will fare on the console plane.

What happens if Nintendo manages to succeed and raise this army? Sony and Microsoft will fight to the death, assuredly. Should the two succeed in tearing the other down, Nintendo is essentially spared from the combat, left with a garguantan army at its beck and call, as well as a market ripe for the taking. Of course, that's merely one possible scenario. Chances are high that Nintendo may take its newly amassed soldiers and set off to explore "other planets” like Iwata touched on at GDC 2005. The latter seems more viable a possibility, but it's also likely that Nintendo will take hold of the market place once more, at least until a new contender enters the ring to challenge them (such is inevitable).

As I said from the beginning, wars are not happy situations. The stakes are high and many fall by the wayside. Yet, they seem destined in this place called the games industry. The strategies are set, the armies are amassing, but the cards are still close to the chest on every side. Nintendo stands to gain the most in the next generation if its strategy pays off. Who will fall and who will rise? We won't know until it’s over, but it’s never been more exciting to be a gamer. And thankfully, unlike real war, no lives have to technically be lost; not that we couldn't spare a few overzealous fans here and there, though.

Netter Artikel.

 

[quirl]

OMG gibts das ned auf Deutsch :-?

 

[WandaNoColossus]

Lustig Hat der Autor sich mal Mühe gegeben, die ganze Sache aus einem anderen Blickwinkel zu betrachten. .

mal scheun, ob sie es schaffen. Gönnen würde ich es ihnen. Kann mir die Konsolenlandschaft nicht ohne Nintendo vorstellen .

 

[Jamaica Joe]

Der DS ist ein Erfolg - nicht weil Nintendo am Handheldmarkt ein Monopol hatte. Auch nicht weil der DS den namen des Platzhirschen "Gameboy" trug, was er auch nicht tat. Sondern eigentlich nur wegen der Idee etwas anderes zu bieten als bisher.

Die Idee ging auf, Nintendogs, Braintrainer, ja sogar tamagotchi spiele katapultieren den DS in neue höhen, nicht nur in Japan, sondern weltweit. Die third Party Unterstützung kommt, früher oder später sowieso um auch dem klassischem gamer zu bieten wonach es ihm dürstet: Children of Mana, Final Fantasy 3-D, Viewtiful Joe, Castlevania, Mario Kart, Animal Crossing, Nanostray, Phoenix Wright, Xenosaga, Tales of DS, Meteos,.....

Und ich denke mit so einer Strategie kann der Revolution nicht falsch liegen. Natürlich darf man nicht vergessen, daß es jetzt nicht nur Nintendo vs. Sony heißt sondern Nintendo vs. (Sony vs. MS).

 

[Jamaica Joe]

Since I do not have the actual book, I decided to do some research on this strategy for us to get a better idea on what Nintendo is doing. I think it is very interesting because not only do you see what Nintendo is doing, but you get an idea of why in relation to Sony and MS as well. It is long, but I tried to make it an easy read as much as possible. If you have the time you should read it. I think it's worth it.

The authors of this are W. Chan Kim and Renée Mauborgne.



From the actual website ( http://www.blueoceanstrategy.com/ ) there are nine key points to BOS:

BOS is the result of a decade-long study of 150 strategic moves spanning more than 30 industries over 100 years (1880-2000).

BOS is the simultaneous pursuit of differentiation and low cost.

The aim of BOS is not to out-perform the competition in the existing industry, but to create new market space or a blue ocean, thereby making the competition irrelevant.

BOS offers a total set of methodologies and tools to create new market space.

While innovation has been seen as a random/experimental process where entrepreneurs and spin-offs are the primary drivers – as argued by Schumpeter and his followers – BOS offers systematic and reproducible methodologies and processes in pursuit of innovation by both new and existing firms.

BOS frameworks and tools include: strategy canvas, value curve, four actions framework, six paths, buyer experience cycle, buyer utility map, and blue ocean idea index.

These frameworks and tools are designed to be visual in order to not only effectively build the collective wisdom of the company but also to effectively execute through easy communication.

BOS covers both strategy formulation and strategy execution.

The three key conceptual building blocks of BOS are: value innovation, tipping point leadership, and fair process.

First I must say that the majority, if not all, of us felt the DS was to test the waters for the Revolution. After reading about the BOS, it seems that Nintendo was testing the strategy to see if it would work more than the DS itself. When looking at Nintendo and then looking at these key points, it becomes easier to begin to see what Nintendo is doing. Taking a quick look at some of the key points, number 2 and 3 would align with Nintendo's approach with the Revolution. Number 5 to me seems to relate to Nintendo going from the DS to the Revolution in that the methods used for the DS can used for the Revolution.

Also on the site is a Q&A with the authors. With this, you can see where Nintendo is going in comparison to Sony and MS. To me, you get an even clearer understanding than before after reading the Q&A.


MCNews: How do you define blue ocean strategy, and why is it important for executives to embrace the idea?

Kim: Blue ocean strategy is about creating uncontested market space. Too many companies are swimming in the red ocean of bloody competition where there is limited room for real growth. The image of the vast blue ocean conveys the infinite possibilities for profitable growth that exist with this strategy.

MCNews: Can you explain your concept of “value innovation” and how it relates to creating a blue ocean strategy?

Mauborgne: Value innovation is a strategic move that allows a company to create a blue ocean. Typically, companies in the red ocean pursue incremental improvements for customers through either low cost or differentiation. Value innovation helps companies make giant leaps in the value provided to customers through the simultaneous pursuit of differentiation and low cost.

It shouldn’t be a trade off between the two; exceptional value and innovation should be inseparable. Offer buyers a huge leap in value, and that will give rise to new markets. That’s how you make the competition irrelevant.

MCNews: When you look at the state of strategic planning in companies, what do you think works well, and what doesn’t?

Kim: Most companies are too numbers-driven. They do lots of comparative industry analysis—especially on the competition—but that blinds them to the big picture.

The focus on numbers does produce some accountability, though. You develop numbers and then make somebody accountable for them. But that approach keeps companies in the red ocean because of the narrow focus on the competition.

MCNews: The numbers-driven process is familiar and comfortable for many executives. Have you found that successful companies resist rethinking strategic planning?

Mauborgne: I think most companies know that strategic planning is an imperfect process. There are certainly many books and articles criticizing it. But they have not had an alternative to it, so companies have kept on using it because it does allow for some degree of accountability.

We offer a compelling alternative. We begin by giving companies three pointers on how to break out of the red and into the blue ocean. Number one: stop benchmarking the competition. The more you benchmark your competitors, the more you tend to look like them. That makes you a me-too organization, which is the opposite of what you want to achieve.

Second: stop being content to swim in the red ocean. Many companies are caught up in competing and don’t even look to the horizon of the blue ocean. And third: don’t count on your customers for growth. Look to non-customers; they provide the most insights into how you can create new, uncontested opportunities—new demand for your products or services.

MCNews: What are the first few steps to help executives see the light about this new way of thinking about a business?

Kim: The most important part is to help people realize that a company is in the red ocean to begin with. People think they are in the blue ocean when they really aren’t. When you show them the true picture, they are always surprised.

The next step is to turn their attention away from the competition and, as Renée said, get them to focus on non-customers—those in the marketplace who are not using the company’s products or services at all. Then people start to get a lot of blue ocean ideas.

MCNews: Putting a new strategy in place eventually translates into day-to-day business activities that affect everyone in the organization. Do you have any suggestions for insuring organization-wide acceptance or buy-in for a blue ocean strategy?

Mauborgne: Building on Chan’s points, we create a willingness in people to change by making them see the limitations of the red ocean. That gets them to listen. Then, we set the aspiration to create a blue ocean by showing how other companies have accomplished that.

We stress how to build a blue ocean strategy through dialog that is inclusive. We talk about how to build execution into strategy from the beginning by getting not only the top few people involved, but people across the organization. Then they are all part of it, have ownership of it, and therefore feel a commitment to execute on the ideas.

MCNews: What are some examples of red and blue ocean companies?

Kim: If you look at the airline industry, the airlines that are either in bankruptcy or close to it remain stuck in the red ocean of competition. Southwest Airlines, on the other hand, created a totally blue ocean by attracting car drivers.

Southwest did not compete head-on against other airlines by offering better meals or other incentives. Instead, they attracted car drivers by making flying closer to the car-driving experience. They offered the speed of the airplane with the economics and flexibility of driving.

Starbucks and IKEA are other examples of companies that have created new markets for their products through value innovation.

MCNews: What advice would you give companies if they want to get out of the red ocean?

Mauborgne: In any industry, no matter how competitive it is, a company can create a blue ocean of uncontested market space. For instance, the auto industry has generally been a red ocean industry. But when Chrysler came out with the minivan, they created a blue ocean and soaring new demand.

For us, that’s the excitement of blue ocean strategy. You can create a blue ocean within a red one. In the airline industry, another good example is Virgin Atlantic Airways, which went for the high end market. Virgin redefined the travel experience for business and first-class travelers. It’s not just getting from airport A to B, but the experience you have from when you leave your home to when you arrive. So it includes ground transportation, and options like taking a shower on arrival instead of going to a hotel.

MCNews: They offer the opposite of the car driving experience?

Mauborgne: Absolutely. And that’s a key point. You can create a blue ocean at the high end of an industry as Virgin did, or at the economy end as Southwest did. Blue oceans can also be created at the middle point of an industry like Borders and Barnes & Noble have done. There are multiple entry points to create a blue ocean in any industry.

MCNews: I guess the challenge is to have the method and the talent somewhere in your organization to help identify where your opportunities are for a blue ocean strategy.

Kim: That’s right.

MCNews: With more than 6,000 books on business strategy in the market, do you have a blue ocean strategy for your book?

Kim: Unlike other books on strategy, this book is the result of more than a decade of research and practice. Many strategy books conceptualize without providing a framework for what and how to do things. In our book, we generate action steps based on our experience of putting theory into practice.

We are saying that we found a pattern in the way innovation creates new markets. It’s not random, so we can structure it. The book presents the pattern for doing so. That message is actually counterintuitive.

MCNews: Thanks to both of you for your time today.


[link=http://www.blueoceanstrategy.com/pages/QandA_orig.htm]Click here to read another Q&A and interviews with them.[/link]

It turns out that while the use of the term “Blue Ocean” is new, the premise behind it is not. After doing more reading of different reviews on the book, I came across some companies who have used this type of strategy according to the book:

[ul][li]NetJets (fractional Jet ownership)[/li]
[li]Cirque du Soleil (the circus reinvented for the entertainment market)[/li]
[li]Starbucks (coffee as low-cost luxury for high-end consumers)[/li]
[li]Ebay (online auctioning)[/li]
[li]Sony (the Walkman - personal portable stereos)[/li]
[li]Cars: Japanese fuel-efficient autos (mid-70s) and Chrysler minivan (1984)[/li]
[li]Computers: Apple personal computer (1978) and Dell's built-to-order computers (mid-1990s).[/li][/ul]

What I see from these companies is that they created a blue ocean that eventually became a read ocean once others followed what they did. So the question I ask is if Nintendo is successful using the BOS, will it eventually become a red ocean?

Again I know it is long, and I tried to keep it as short as possible. I hope you were able to read this.

Ich dachte das passt hier rein. Der wichtigste teil ist wohl dieser:

Look to non-customers; they provide the most insights into how you can create new, uncontested opportunities—new demand for your products or services.

Nintendo verfolgt diese Strategie mit dem Revolution. Neue Kunden ansprechen, denn die Leute die KEINE Konsolen kaufen, sind der großteil der Menschheit, ein riesiges Potential, ob der Revolution der richtige Weg, das zu erreichen, ist, wird sich zeigen...

 

[gerrL]

ich vesteh das niiiiiiiiiich ! kann das keiner für die jüngeren user unter uns übersetzen ?? (die nich so gut englisch könn?)

 

[Boerkel]

Natürlich kann man das, aber ich weiß nicht ob ich das einfach so darf. (Copyright)^^
Außerdem würden alle schauen wieviel Fehler ich beim Übersetzen reinhaue...

 

[iriedaily]

Kim: Blue ocean strategy is about creating uncontested market space. Too many companies are swimming in the red ocean of bloody competition where there is limited room for real growth. The image of the vast blue ocean conveys the infinite possibilities for profitable growth that exist with this strategy.

Die "Blue Ocean"-Strategie handelt darüber, einen Markt anzusprechen bzw. zu erschließen, in dem es keine Konkurrenz gibt.
Zu viele Unternehmen schwimmen im "Red Ocean" des blutigen Konkurrenzkampfes, bei dem es nur begrenzten Raum für wirkliches Wachstum (= Marktanteile erweitern) gibt.
Das Bild des gewaltigen "Blue Oceans" vermittelt die unbegrenzten Möglichkeiten für profitables Wachstum, die mit dieser Strategie verbunden sind.

------

So in etwa. Mein Englisch ist nicht das Beste.

 

[Wednesday]

interessanter bericht,leider konnte ich nicht alles verstehen

 

[Mokka]

es ist wirklich lustig, wenn man liest was diese leute so machen um ihr buch an den mann zu bringen...

diese strategie gibt es schon seit es so etwas wie einen markt gibt. mache dein produkt bzw. deine dienstleistung anders als das das/die der konkurrenz und du machst mehr kohle weil du andere leute ansprichst.

ich weiß nicht wer von euch schon mal in einer marketing vorlesung oä. war, aber der USP (unique selling proposition that is) eines produktes ist nichts anderes und das ist das, worum sich alles dreht, wenn man ein neues produkt veröffentlicht...

 

[negu]

ganz netter artikel