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Innovative Performance of Nintendo

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Innovative Performance of Nintendo

  1. 1. Wii -Expanding The Imagination 6 April 2009Presented By: DC-TECH
  2. 2. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  3. 3. Presentation ObjectiveTo create a common understanding of Nintendo’sinnovative performance on Wii through the following:• Industry lifecycle & technology trajectory• Strategic approach• Position of assets and resources• Innovation processes
  4. 4. Company Facts • Established in 1889 in Kyoto, Japan • Nintendo Company Ltd. is a global company located in Japan (Kyoto-HQ), USA, Canada, Australia, Germany, France, Neatherlands, Spain, Belgium, UK, Italy, South Korea and China (JV under iQue Ltd). • Nintendo offers hardware and software entertainment product in the home entertainment market • Main competitors are Sony (Playstation) and Microsoft (XBox) • Known for embracing the “Blue Ocean Strategy”, Nintendo star products includes Wii and Nintendo DS • In 2007, Nintendo ranked 8th on the list of largest software companies in the world.Source: Wikipedia. Nintendo Annual Report 2008
  5. 5. Games Evolution at Nintendo1889 1980 2000 2006• 1889 - Fusajiro Yamauchi sold Japanese Hanafuda playing cards in Kyoto, Japan.• 1977 - Developed Nintendos first home video game machines , TV Game 15 and TV Game 6.• 1980 - Developed GAME & WATCH, the first portable LCD video games with a microprocessor.• 1985 - Released the Nintendo Entertainment System (NES) . The Super Mario Bros . became a smash hit around the world.• 1989 - Introduced Game Boy, the first portable, hand-held game system with interchangeable game paks, in Japan and the U.S.• 2001 - Launched Nintendo GameCube• 2006 - Launched Nintendo DS Lite, and Nintendo Wii.
  6. 6. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  7. 7. Video Games Industry Life Cycle (before Wii)% Growth(Unit sales) • Market saturated • Since year 2000, the industry sees single digit growth (~7%) • Mostly replacement with newer release, ie. Playstation3, etc instead of getting new customers • Lack of penetration into new market segments, ie. Non-gamers, young and older segments Industrial growth will need a technology paradigm and technology trajectory. (Dosi) Introduction Growth Maturity DeclineSource: Lecture Notes , GRabstats.com
  8. 8. Factors influencing Nintendo Technological Factors Social Factors Availability of advance motion Mass market adoption sensor and wireless technology of wireless lifestyle, from other industry and powerful such as mobile phones, semiconductor technology MP3 Games Console Technological Trajectory Technology Economic Factors Political Factors Competitive pressure from Pressure on games console Microsoft and Sony on both manufacturer to reduce violence technological ground and market in games and negative influence share on the youth marketSource: Palermo Business Review , interview notes from www.nintendo.com, www.innosight.com
  9. 9. Technological Trajectory Time Disruptive Incremental Innovation Innovation Disruptive Nintendo Wii Microsoft Xbox Sony Playstation Nintendo Wii Motion sense Hardware controller provides (consoles) with wireless freedom more powerful to users processors Graphics are Better quality and simple sharper graphics Games engages More Incremental the whole family sophisticated Microsoft Xbox game play Sony Playstation Levels of InnovationSource: Palermo Business Review | Nº 2 | 2008
  10. 10. Video Games Industry Life Cycle (after Wii) % Growth Original life cycle Renewed life cycle (Unit sales) Launch of Wii Year 2007 sees double digit growth ~11%, it is expected by 2012, *190 million household in USA alone will use next- generation video games console. 2006Source: Lecture Notes, *Grabstats.com
  11. 11. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  12. 12. Nintendo locked into red ocean before Wii • In 2005 PS2 installed base was115 million vs Nintendo GameCube <20 million • Trying to improve marginally the gaming experience and competing for marketshare • Not possible to catch up with the technological ground of Microsoft and Sony • Competitors targeting gaming audience (age 18-34) vs GameCube (age 7-16) • GameCube left out expanding DVD player market and early internet connection If Nintendo was to succeed in the current generation of videogames, it needed radical changes to its strategy and market focusSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  13. 13. Changed the rules of the game with the launch of Wii • Recognized mistakes and made radical changes to its strategy o User oriented o Casual gamers o Playing with family and friends • By using a Blue Ocean Strategy o Creating demand in places where there was none, hence expanding the market • Disruptive strategy where past success paradigms are broken and new ones writtenSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  14. 14. Wii’s value curve • Value curve has two purposes o Understand where competition is investing and their strategic direction o Understand consumer perception of offerings • Graphic depiction of Wii’s relative performance across its industry’s factors of competition The difference with Wii is that its focusing on factors important to customers besides the technical factorsSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  15. 15. Wii’s value curveSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  16. 16. Wii created a value curve that catapulted the product to success • Eliminate-Raise-Reduce- Create grid key to breaking trade-off between differentiation and low cost • Lower price, higher profit on console o Eliminating/reducing expensive components not valuable to target audience • Increasing overall revenues o Motion sensor controller hardware is necessary to the Wii platform o Accessories unlock a more participative gaming experienceSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  17. 17. The result of the strategy • Revenue growth has sky-rocketed and so has its popularity • Only viable response so far has been price cuts in the competitors, reinforcing Wii’s successSource: Palermo Business Review | Nº 2, 2005, Kim and Mauborgne, www.innosight.com
  18. 18. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  19. 19. Some assets supporting Nintendo’s innovative performance Classes of assets Wii PS3 Xbox360 (including resources) Nintendo Sony Microsoft Technical • Low cost hardware • High cost hardware • High cost hardware • Consoles ease of use • Consoles complexity • Consoles complexity • Controllers motion • Joystick and pads • Joystick and pad detector • Complex to develop games • Complex to develop games • Simple to develop games Complementary • Nearly all production • Estimated 40% of • Had to streamline outsourced, flexibility production in-house production to reduce cost • Untraditional marketing • Traditional marketing • Traditional marketing • Exergaming • Not applicable • Not applicable Financial • Profit per console US$ • Loss per console US$ • Profit per console US$ 49 306.85 75.70 • Cost of developing • Cost of developing games • Cost of developing games games 30-50% vs app. US$ 10-12 million per app. US$ 10-12 million per Organisational and • competitors Operates in one • game Operates in several • game Operates in several Structural industry industries industries Reputational and • Gaming system • Multimedia entertainment • Multimedia entertainment Market • SW and HW in sales hub hub • Low price • SW and HW sold seperately • SW and HW sold seperately • Higher price • Higher price For more information on Assets refer to AppendixSource:2009 Ali Farhoomand Asia Research Centre HK, Annual reports Sony & Microsoft, 1997 David J. Teece, Gary Pisano and Amy Shuen, Sony Corp RyanBogner Peter Hung et all, www.money.cnn.com, www.sony.net, www.accessmylibrary.com, www.dd.dynamicdiagrams.com, www.washingtonpost.com
  20. 20. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  21. 21. Innovation Process ModelSource: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt
  22. 22. Searching For Opportunities Internal Scan External Scan 1. Employees’ ideas 1. Technological changes & 2. Knowledge base advances, eg: State-of-the-art Semi-conductor (development partners) 2. Consumers’ feedback forum 3. Competitors Eg. PS3 & XBOX 4. Benchmarking other industries such as automotiveSource: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview
  23. 23. Selecting The Right Opportunities Technology Proven technology after few testing with suppliers Change Market Huge opportunities of Non-gaming group (Wii case), saturated Opportunities “hard-core” gamers market Years of experiences & know-how, always tap into latest Technology technology , strong R&D team Competenc y Strong vision in doing something new and benefit-making. Strong Corporate support from organisation. Culture Business Strategic change essential to avoid continued market share lost StrategySource: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview
  24. 24. Acquiring Resources Internal Resources External Resources 1. Technology/Equipment re-use  1. Technology Transfer  Touch pad adopt the previous technology to in DS, Internet embedded in Wii, the new product. Accelorometer in automotive 2. Knowledge transfer Eg. industry Handheld gaming device team 2. Technology/Equipment Creation  transfer the know how to Wii team. Semi-conductors. 3. Technology/Equipment Creation Eg. Wii controller, Wii Balance Board.Source: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview
  25. 25. Executing Project Concurrent Development Process – Separate team 4 th Generation Product Development develop own components Process Marketing simultaneously (both internal & external) Research & Development Testing - Mock-up, prototypes & Product Development trial software created, trial & error, IC Development tools. Production Engineering Parts Manufacture (suppliers) Interaction among teams – to ensure the integrity of the Manufacture development project Strong integration with the Joint Group Meetings (Cross- Launch Marketing functional) suppliers – Eg. The semi- Adapted from Roy Rothwell, Towards the 5th-generation Innovation Process (Nissan Process Model) conductors manufacturersSource: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview
  26. 26. Launching Internal Testing – Employees test 4 th Generation Product Development use the product Process Marketing Customer Testing – Pre-launch trial, in trade show or in-house user Research & Development trial Product Development Develop Market Plan – Production Engineering Specifically to target market, Eg. E3, Life@50+ (target elderly group), Parts Manufacture (suppliers) Word-of-Mouth (Housewives recruited to spread the words), Manufacture gamers’ video (Youtube® site) Joint Group Meetings (Cross- functional) Marketing Support of Organization – every Launch individual in the organization has Adapted from Roy Rothwell, Towards the 5th-generation Innovation Process (Nissan Process Model) strong support and positive message for the new productSource: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview, Eric Taub, Martin Fackler(The New York Times), Ali Farhoomand-Asia Research Centre,University of HK.
  27. 27. Learning Knowledge - Involve in whole processes. Re-use and recycle success 4 th Generation Product Development Process know-how. Marketing Post-launch feedback – users’ Research & Development experience & market reaction. (Eg. Product Development Nintendo Forum) Production Engineering Ideas Expansion - From the success of Wii, they learn that the opportunities Parts Manufacture (suppliers) was broadened. Eg. Wii Fit was being Manufacture introduced later. Joint Group Meetings (Cross- Improvement - Benchmarking with Marketing functional) Launch competitors to see what to improve. Post-launch Feedback Company Strategy – Incorporate Adapted from Roy Rothwell, Towards the 5th-generation Innovation Process (Nissan Process Model) learnings into the Blue Ocean framework and outsource to 3rd party games developers.Source: Lecture Notes, ©2005 Joe Tidd, John Bessant and Keith Pavitt, Nintendo Iwata Interview
  28. 28. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  29. 29. Conclusions• Innovation is not just about following a road map but also about using theories and models relevant to the company’s vision. Nintendo has successfully open new ground with the application of Blue Ocean strategy and setting their company vision with customer in mind.• Nintendo Wii is a good example that innovation does not necessarily lead to very sophisticated and highly expensive product.• Nintendo’s Corporate culture allowed the freedom to accept internal and external ideas. The whole organization also fully support execution of new ideas.• Blue Ocean strategy is not magic, it still requires a complete and practical plan to implement and execute the ideas from product development to market launching in order to gain success.
  30. 30. Recommendations• Nintendo should ensure there is knowledge transfer from the senior officers to the next generation of staff to ensure sustainability.• Nintendo need to advanced into 5th generation development process.• Nintendo should also leverage on building brand reputation and recognition to be competitive versus new entrants.• Competitors can also use blue ocean so do not forget Micheal Porters traditional strategy frameworks.
  31. 31. Nintendo – Wii in action!!
  32. 32. For some time we have believed the game industry isready for disruption. Not just from Nintendo, but from all game developers. It is what we all need to expand our audience. It is what we all need to expand our imaginations. - Satoru Iwata, president of Nintendo Co. Ltd
  33. 33. Outline• Background• Industry Lifecycle and Technology Trajectory• Blue Ocean Strategy• Assets and Resources• Innovation Processes• Conclusion & Recommendations• Q&A
  34. 34. Q&A
  35. 35. References1. Assets in Nintendo. Downloaded from: http://wii.gamespy.com/articles/943/943524p1.html as at 24 March 20092. December 2008 US Games Industry Summary. Downloaded from: http://www.neoseeker.com/news/9647-december-2008-npd-nintendo-dominates-the-christmas-season as at 20 March 20093. Design process of wii, Round table Interview with company President. Downloaded from:http://www.nintendo.com/wii/what/iwataasks/volume-1/part-1.html to part-3.html as at 25 March 2009.4. Design process of Nintendo wii. Downloaded from: http://www.nintendo.com/wii/what/iwataasks/volume-2/part-1.html topart-3.html as at 26 March 2009.5. Development process of wii downloaded from: http://www.nintendo.com/wii/what/iwataasks/volume-3/part-1.html topart-6.html as at 28 March 2009.6. Development process of Nintendo wii . Downloaded from: http://www.nintendo.com/wii/what/iwataasks/volume-4/part-1.html to part-4.html as at 26 March 2009 .7. Expert analysis on Nntendo as disruptive innovation. Downloaded from: www.innosight.com as at 22 March 2009
  36. 36. References Cont.8. Fackler, Martin., The New York Times: ‘Putting the We Back in Wii’ June 8, 20079. Farhoomand, A. (2009). ’Nintendo’s disruptive strategy: Implications for the video game industry*. Asia Research Centre.The University of Hong Kong10. Giovanni Dosi (1982). ’ Technological paradigms and technological trajectories’11. Kim and Mauborgne (2005). ’Blue Ocean Strategy: How to Create Uncontested Market Space and Make theCompetition Irrelevant’. Harvard Business School Press12. Nasir, R. (2009). Technological Trajectories class 3, Pg 1. and Processes class 5. Innovation Management LectureNotes.13. Nintendo Annual Report 2008. Downloaded from Wikipedia as of 26 March 200914. Nintendo Staff Interview with Iwata, Nintendo.com. Downloaded from:http://www.nintendo.com/wii/what/iwataasks/volume-extra/part-1, as at 13 March 2009.15. Nintendo’s third party affiliates, December 28th, 2008 Posted in Features, Wii, Written by Valay
  37. 37. References Cont16. Nintendo facts, Wikipedia. Downloaded from: http://en.wikipedia.org/wiki/Nintendo, as at 13 March 0917. Palemo Business Review. Downloaded from: http://www.nintendo.com/wii/what/iwataasks/volume-1/part-1.html to part-3.html as at 20 March 200918. Patricio O’Gorman (2008). ’ Wii: Creating a Blue Ocean. The Nintendo Way’. Palermo Business Review | Nº 2.19. Resources of Nintendo. Downloaded from: http://www.nintendo.com/countryselector.http://en.wikipedia.org/wiki/Nintendo.http://advice.cio.com/thomas_wailgum/woe_is_wii_the_curious_case_of_nintendos_supply_chain_plans?page=0%2C1.http://www.businessweek.com/managing/index.html as at 25 March 200920. Rothwell, Roy. Towards the Fifth-generation Innovation Process. International Marketing Review, Vol. 11 No. 1, 1994, pp.7-31 MCB University Press,0265 - 133521. Scott D. Anthony (2006). ‘Wii, Zune, and Nonconsumption’22. Sonys Sudden Samurai , MARCH 21, 2005 . Downloaded from:http://www.businessweek.com/magazine/content/05_12/b3925031_mz011.htm as at 29 March 200923. "Sonys Revitalization in the Changing CE World" , Oct. 4, 2005. Downloaded from:http://www.sony.com/SCA/speeches/051004_stringer.shtml  as at 29 March 2009
  38. 38. References Cont.24. Tack, T.W (Director). Managing In An Uncertain Economic Environment; Stone Forest Corporate Advisory.25. Taub, Eric. The New York Times: ‘Nintendo at AARP Event to Court the Grayer Gamer’ October 30, 200626. Teece, D. ; Pisano, G and Shuen, A. (1997). ’Dynamic Capabilities and Strategic Management’. Strategic ManagementJournal, Vol. 18:7, 509-53327. Teece, D. (1986). ’Profiting from technological innovation: Implications for integration, collaboration, licensing and publicpolicy’. Research Policy 15 285-30528. Tidd, J. , Bessant, J. & Pavitt, K. (2005). Managing Innovation: Integrating Technological, Marketing and OrganizationalChange. (3rd Edition). Jin Xing Distripark , Singapore; John Wiley & Sons29. Vargas, A. (2005). "Outside the Box, Jonathan Hayes Gave Shape To Microsofts Game Console" .      Washington Post Staff Writer, Tuesday, November 22, 2005. Downloaded from:       http://www.washingtonpost.com/wp-dyn/content/article/2005/11/21/AR2005112101631_pf.html as at 28 March 200930. Video Games Industry Stats Overview, GRABstats.com,. Downloaded from: http://grabstats.com/statcategorymain.asp?StatCatID=13, as at 13 March 200931. Critisisms to Blue Ocean Strategy. Downloaded from:http://en.wikipedia.org/wiki/Blue_Ocean_Strategy, as at 31 March 2009
  39. 39. Appendix• The Video Game Industry• Timeline• Type of trajectory• Some assets supporting Nintendo’s innovative performance• December 2008 US Games Industry Summary• December 2008 US Hardware Sales• How many does the company affiliate (third part) with?• Critisisms to the Blue Ocean Strategy
  40. 40. The Video Game industry • Born in the 1970s o Atari (US) and Namco (Japan) brought arcade games found in malls and video game arcades o Video games into households through Introduction of home consoles o Targeting teenagers • 1980s PC games, playing not limited to proprietary consoles • Sony introduced PS in mid-1990s o Targeting also young adults • Sony launched PS2 in 2000 • Microsoft as a response launched Xbox in 2001 • Early 2000 convergence of IT, Telco, Media and Entertainment o Sony and Microsoft saw opportunities for playing a greater role than pure entertainment through Home Entertainment centres. • Video game hardware industry dominated by Nintendo, Sonys PS family and Microsoft with Xbox 360Source:2009 Ali Farhoomand Asia Research Centre HK
  41. 41. Timeline • 1889 - Fusajiro Yamauchi began manufacturing and selling Japanese Hanafuda playing cards in Kyoto, Japan. • 1959 - Started selling cards printed with Walt Disney characters. • 1963 - Changed company name to Nintendo Co., Ltd. Started manufacturing and selling games and toys. • 1970 - Started selling the Beam Gun series, employing opto-electronics. • 1973 - Developed the Laser Clay shooting-range system to succeed bowling as a major pastime. • 1974 - Developed image projection system employing 16mm film projector and entered into the arcade business. Began exporting systems to the U.S. and Europe. • 1977 - Developed Nintendos first home video game machines, TV Game 15 and TV Game 6. • 1980 - Developed and started selling GAME & WATCH product line, the first portable LCD video games with a microprocessor. • 1983 - Started selling the home video game console Family Computer System employing a custom CPU (Central Processing Unit) and PPU (Picture Processing Unit). • 1985 - Released the Nintendo Entertainment System (NES). The Super Mario Bros. became a smash hit around the world. • 1989 - Introduced Game Boy, the first portable, hand-held game system with interchangeable game paks, in Japan and the U.S. • 1990 - Nintendo enters the 16-bit console market with the release of the Super Famicom in Japan. • 1998 - Nintendo introduces Game Boy Color along with innovative devices called the Game Boy Camera and Printer, bringing new life to the longest running hit in the history of interactive entertainment. Pokémon, a breakthrough game concept for Game Boy, is introduced overseas and generates an international craze to catch em all! Pokémon the 1st movie is released in Japan. Nintendo introduces Hey You, Pikachu! in Japan with Nintendo 64 VRS, the first Voice Recognition System for console video games. • 2001 - Started selling Mobile Adapter GB system in Japan, which links Game Boy Color and Game Boy Advance to cell phones. Launched Nintendo GameCube in Japan and in the U.S. e-Reader, which scans special barcodes printed on paper cards, is introduced as a peripheral for Game Boy Advance. Introduced Nintendo GameCube Game Boy Advance Cable to connect Nintendo GameCube with Game Boy Advance. • 2004 - Launched the hand-held gaming device Nintendo DS, which opened up a new style of entertainment with its dual screens, touch control, wireless communication, and voice recognition technology, launched in Japan and in the U.S. • 2006 - Launched Nintendo DS Lite, and Wii. • 2007 - Released Wii Fit in Japan.Source: Nintendo Annual Report 2008
  42. 42. Type of trajectory (appendix) Supplier-dominated Scale-intensive Science-based Information-intensive Specialized supplierTypical Core Product Agriculture Bulk materials Electronics Finance Machinery Services Consumer durables Chemicals Retailing Instruments Traditional Automobiles Publishing Software manufacture Civil engineering TravelMain sources of Suppliers Production engineering R&D Software & systems Designtechnology Production learning Production learning Basic research dept Advanced users Suppliers Suppliers Design officesMain task of innovation strategy1. Positions Based on non- Cost effective & safe Develop technically New products & Monitor & respond to technological complex products and related products services user needs advantages processes2. Paths Use of IT in finance Incremental Exploit basic Design & operation of Matching changing and distribution integration of new science complex information technologies to users’ knowledge processing systems needs3. Processes Flexible response to Diffusion of best practice Obtain To match IT-based Strong links with lead user in design, production & complementary opportunities with user users distribution assets needs
  43. 43. Some assets supporting Nintendo’s innovative performance Classes of assets Wii PS3 Xbox360 (including resources) Nintendo Sony Microsoft Technical • Low cost hardware • High cost hardware • High cost hardware • Home gaming system • Home entertainment system • Home entertainment • Console ease of use • Console complex to use system • Controllers motion • Joystick and pads • Console complex to use detector • Complex to develop games • Joystick and pad • Simple to develop • Complex to develop games games Complementary • High sales of games and • Lower sales of games and • Lower sales of games and accessories accessories accessories • Nearly all production • Estimated 40% of • Had to streamline outsourced, flexibility production in-house production to reduce cost • Marketing by word-of- • Traditional advertising or • Traditioal advertising or mouth, YouTube and social mass-media ampaigns mass-media ampaigns networking • Not applicable • Not applicable • Exergaming Financial • Installed base July 2008 • Installed base July 2008 • Installed base July 2008 35,59 million PS3 15,9 million 18,49 million • Profit per console US$ • Loss per console US$ • Profit per console US$ 49 306.85 75.70 • Cost of developing • Cost of developing games • Cost of developing games games 30-50% vs app. US$ 10-12 million per app. US$ 10-12 million per competitors game game • Titles developed by 3rd • First party titles developed • Titles developed by 3rd parties giving 10-15% of in-house giving 100% of parties giving 10-15% of revenue revenue revenueSource: next slide
  44. 44. Some assets supporting innovative performance Classes of assets Wii PS3 Xbox360 (including resources) Nintendo Sony Microsoft Organisational and • Operates in one • Operates in several • Operates in several Structural industry and lead by industries industries gaming-experts, focus • Limiting cross-company • Structured processes • Split into 5 teams who work cohesion by ”Silo- through large and on different projects organisation” distributed world-wide team Reputational and • Play with family and friends • ”Play alone in the dark” • ”Play alone in the dark” Market • Targeting non-gamers • Targeting existing gamers • Targeting existing gamers • Position as gaming • Positioned as multimedia • Positioned as multimedia system entertainment hub entertainment hub • SW and HW in sales • SW and HW sold seperately • SW and HW sold • Lower price than • Higher price seperately competitors • Higher priceSource:2009 Ali Farhoomand Asia Research Centre HK, Annual reports Sony & Microsoft, 1997 David J. Teece, Gary Pisano and Amy Shuen, Sony Corp RyanBogner Peter Hung et all, www.money.cnn.com, www.sony.net, www.accessmylibrary.com, www.dd.dynamicdiagrams.com, www.washingtonpost.com
  45. 45. December 2008 US Games Industry Summary • Total Sales - $5.29 billion USD • Hardware Sales - $1.88 billion USD • Software Sales - $2.75 billion USD • Accessory Sales - $662 million USDSource: http://www.neoseeker.com/news/9647-december-2008-npd-nintendo-dominates-the-christmas-season
  46. 46. December 2008 US Hardware Sales • Platform Unit Sales Unit Sales Year-to-Date Lifetime Dec 08 to Dec 07 per Week -to-Date Unit change 1.Nintendo DS 3,040,000 608,000 9,951,100 27,503,000 +570,000 2.Nintendo Wii 2,150,000 430,000 10,170,000 17,541,000 +800,000 3.Microsoft Xbox 360 1,440,000 288,000 4,748,400 13,889,000 +180,000 360 4.Sony PlayStation 1,020,000 204,000 3,829,100 14,247,000 -40,000 Portable 5.Sony PlayStation 3 726,000 145,200 3,544,800 6,788,000 -71,600 6.Sony PlayStation 2 410,000 82,000   -690,000Source: http://www.neoseeker.com/news/9647-december-2008-npd-nintendo-dominates-the-christmas-season/
  47. 47. How many does the company • affiliate (third part) with? *Become an affiliate • Handheld Wii • NintendoStar • Wii Accessories • Balance Board Blog • My Wii Center • NokoNoko • Wii Cheats • Codename Revolution • Ninfando • Playstation Access • Wii Cheats and Codes • Cubed3 • Nintendo Fan Forum • pure nintendo • Wii Fit • Final Fantasy Series • Nintendo Forum • The Bell Tree • Wii Fit in stock checker • Game On Nintendo • Nintendo Gamer • The Nintendo • Wii Network Basement • Gaming News • Nintendo Jump • The Nintendo Fangirl • Wii Plasma • Gekinzuku • Nintendo Wii Cheats • The Tanooki • WiiCharged • Get N or Get Out • Nintendo Worlds • TWGNews • XboxFamily • GTAPla.net • Nintendo Cosmos UberScore Xtra GamerSource: December 28th, 2008 Posted in Features, Wii, Written by Valay
  48. 48. Criticism to Blue Ocean Strategy • At the present there are few if any success stories of companies that applied Blue Ocean theories to find uncontested market place. • Is the book and its related ideas descriptive rather than prescriptive? • The research process followed by the authors has been criticized o No control group o No way to know how many companies exploiting a blue ocean strategy concept failed. o The theory therefore does not meet the falsifiability criteria in practice. o A deductive process was not followed. The examples in the book are selected to "tell a winning story". • Brand and communication are taken for granted and do not represent a key for success. Kim and Maubourgne take the marketing of a value innovation as a given, assuming the marketing success will come as a matter of course. • The book only presents a snaphot overview of 3 industries: automobiles, computers and movie theaters. • It is argued that rather than a theory, Blue Ocean Strategy is an extremely successful attempt to brand a set of already existing concepts and frameworks with a highly "sticky" idea. o The blue ocean/red ocean analogy is a powerful and memorable metaphor o The concepts behind the Blue Ocean Strategy (such as the competing factors, the consumer cycle, non-customers, etc.) are not new. • The book does not explain the most critical aspect that of differentiation between a product innovation which may have the same target users, or a different product, a different way of execution of the same and different market all together.Source: www.wikipedia.com

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