Wii U Marks the End of Nintendo's Era of Disruption | GenGAME

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As technology advances, we?ve seen games become more and more sophisticated ? but there?s a caveat: as things become more and more sophisticated, they start to cater to a crowd that becomes more and more specialized. We saw this with the progression of the first few generations of super-popular game consoles. NES got off to a great start, but as the graphics and technology improved with SNES, N64, and GameCube, fewer and fewer people came along for the ride.

What?s going on? Surely ?bigger and better? should be the formula for even greater success, right? That?s what Sony and Microsoft thought when they came up with their PlayStation 3 and Xbox 360 models in the mid-2000s. Higher power, better graphics, higher-capacity storage media, what amounts to basically a nearly-complete computer and media center built into the system. Among game consoles, they were practically super-computers.

At the end of the day, though, it was Wii that pulled ahead to sell almost 100 million units over the course of its lifetime. How? Through a strategy known as ?disruptive innovation.?

The central principle of ?disruptive innovation? (as coined by businessman and writer Clayon Christensen) is simple. Typically we think of products as meeting a demand. There will always be demand, for example, for various modes of transportation, whether we?re talking about a horse-drawn carriage or a modern car ? so we can always expect people to try to create things that satisfy this demand.

The usual way of going about satisfying demand is to keep making better and better products. This is called ?sustaining innovation,? and it can take on two forms: evolutionary innovation, which involves improving something that already exists, and revolutionary innovation, which involves creating something ?new? but that nonetheless does not actually meet a new kind of demand. The common thread is, again, that new products that appear are created to be ?better? than the products that came before them and thus that they ?sustain? the demand for those kinds of products.

Inevitably, however, there comes a point where making things ?better,? for example by adding tons of features, actually impedes a product?s ability to sustain demand. For PlayStation 3 and Xbox 360, this manifested via the high costs of the systems as a result of their ?bigger and better? hardware. Both saw relatively slow starts, since the market for $400 game consoles has historically always been very small. This is called ?overshooting the market.?

But there is another kind of innovation: disruptive innovation. The central principle of disruptive innovation is to examine the value systems that drive sustaining innovation and to find new values that the current path of innovation do not fulfill. It?s called ?disruption? because these strategies ?disrupt? the usual understanding of innovation ? and because disruption often winds up breaking down the original market as well.

This is the path that was taken by the people behind Wii. Instead of pushing the ?expected? next-gen innovation of graphics and hardware power, Nintendo focused on ?getting people playing? by introducing a less intimidating controller than what was currently on the market and using that controller effectively to build simple fun.

Central to the disruptive mission is managing to do things in a way that?s more cost-efficient than the traditional progression path? so Wii focused on making itself as affordable as possible. Not only did this help put it into more people?s hands, but it gave Nintendo some wiggle room in terms of price that allowed them to enjoy pretty significant profits.

It worked like a charm. People bought Wii who would never have bought a game system otherwise, and Nintendo saw hardware and software sales that exceeded those of GameCube more than four times over. It was largely regarded as a ?last-gen? system by the gaming specialists, but that certainly didn?t get in its way with the people that matter most: the mainstream market.

Wii U, however, seems to be taking a different road. Asymmetric gameplay, while it changes up the dynamic between players, will not create a new market of gamers in the way that Wii created a new market of Wii Sports and Wii Fit players. Touch screen gaming has already been done on the DS and smart devices, making Wii U?s incorporation of a touch screen in the home console space an evolutionary innovation at best, not a disruptive one.

What?s more, the GamePad ? Wii U?s primary innovation ? gets in the way of cost-efficiency. By all accounts it appears that without the GamePad, Wii U is actually put together in a way that?s very cost-effective. It uses a lot of technologies that reduce power consumption and boost the hardware power without gigantic increases in cost. In that regard, it?s still very much like Wii.

I imagine that if you took the Wii U GamePad out of the picture, you could probably sell Wii U for $200 and still pull a profit. It wouldn?t exactly create a new market, but a cheaper alternative to today?s HD systems that also has Nintendo all over it would at least have supreme affordability on its side. With the GamePad, however, Nintendo had to set a less-than-profitable price for the system just to avoid the same slow start that we saw for PS3 and Xbox 360 six years ago ? and it still ain?t all that cheap.

This is a very different Nintendo than the one we saw in 2006. It?s a Nintendo that?s trying to get away with giving their HD GameCube a touch screen and compatibility with everything Wii, not a Nintendo that?s looking to bring games to more people. Instead, they?re actually overshooting the market they already tapped with Wii by driving up the costs with the GamePad. This kind of push for powerful technology has never worked out for the better for Nintendo in the past, so I have to wonder? do they really think it?s going to work now?

I?m normally not a fan of referencing Wikipedia articles, but in this case the entry is actually rather good ? so read more about disruptive innovation by clicking here.

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Source: http://gengame.net/2012/11/wii-u-marks-the-end-of-nintendos-era-of-disruption/

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