Can one company, steeped in decline and who analysts say are about to leave the market, totally reinvent itself? Can one company compete against a company that has leveraged movie and music studios and against a software giant who has a practical endless amount of money? Can a company compete profitably against competitors willing to go billions of dollars into loss leading products? And can this one company not just *win* but totally re-format its industry along with obtaining a higher profit-to-employee ratio greater than any other company on Earth? Can one company become the darling of children and senior citizens simultaneously?

One company can. It is little researched Nintendo who, within a few years, skyrocketed as being one of the top companies of Japan. Why is their success ignored among the business world? And, more importantly, why is their success feared by their greatest fans?

It is all about Disruption.

The computer revolution soared due to managing information via the internet. Inevitably, just as mass market computing has forever changed information, it will forever change entertainment. In these happy articles, witness how a video-game company, Nintendo, resurrected itself as a digital play company, to usher in the next great computing gold rush (that Apple, Microsoft, Sony, and various others are scrambling to emulate). The Information Revolution is over, but the Entertainment Revolution is just beginning...

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Would you like a comic? Then choose one from many here.

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Quotes of this Generation

"Casual gaming growth has been the primary driver for the industry over the last three years, the key player being the Nintendo DS. We believe DS hardware demand has now peaked globally. A downturn in software demand is likely to follow, as casual gamers are ‘happy with their lot’ and do not need to consume more. We feel that the same predicament awaits the Wii console with its similar market expansion angle. Titles such as ‘Brain Training’ and ‘Wii Fit’ do not act as ‘gateway drugs’ to turn non-traditional gamers to core repeat users. We feel this is a structural industry issue that cannot be easily changed."

-Hiroshi Kamide from KBC Securities, 06/17/08

"Yes, the platform is wildly selling, but no one is playing games on it," he contended.

Sooner, rather than later, third-party publishers are going to abandon it, Goodman predicted, or least throw resources toward other platforms as well.

When price points for other consoles come down, gamers are going to move in their direction, he said. "You really have to question what kind of legs [Wii] will have when it sells out the Nintendo market."

-Michael Goodman, Yankee Group Director, 01/18/08

 

The Yankee Group's Michael Goodman thought Wii Fit was "really cool," but doesn't expect it to meet the same success as other Nintendo breakout hits like Brain Age and Wii Sports.
 

"The reality is that the Wii is not expanding the market as much as Nintendo wants us to believe," Goodman said. "According to a publisher I have spoken to, less than 10 percent of Wii buyers did not previously own a console. So basically, Wii growth is coming at the expense of other console manufacturers--mainly Sony--not by expanding the market. It is only once a Wii enters a household that others start using it. Wii Fit will require those 'non-gamers' to go out and buy the board and software, which I'm skeptical of."

-Michael Goodman, Yankee Group Director, E3 2007 Analysis

"It was surprising not to see bigger hardware sales for the Xbox 360 and the PS3 given the release of GTA IV. However, since the game was only in the market for 5 days during this reporting period, that sales lift could very well be evident in May data."

-Anita Fraizer, Analyst for NPD. Gamesutra's April NPD report, June 13, 2008. (Bold is a good example of moving the goal posts.)

"The continued success of GTA IV is not translating into big hardware sales for either the PS3 or the 360 but there may yet to be a lift in June due to gift-giving for Father's Day and graduations."

-Anita Fraizer, Analyst for NPD. Gamesutra's May NPD report, June 13, 2008. (Bold is a good example of moving the goal posts.)

"Xbox 360 has the largest global install base of any current gen. high definition gaming console, Wii excluded."

-Microsoft Statement, 05/15/08

 

"I don't really think that Microsoft and Sony are doing badly - just doing badly in comparison to Nintendo. It makes sense that PS3 and 360 are doing about the same... instead of saying 'what's wrong with Sony and Microsoft,' we should be looking at Nintendo and saying, 'how the hell do they keep doing this?'"

-Michael Pachter, Interview with Kotaku, 6/13/08

[Elitist Gamers' reaction to Wii-mote being unveiled]

-NeoGaf Thread

 

"If the researchers at Strategy Analytics are correct, the Nintendo Revolution will sell just under 18 million units worldwide through 2012, a mere fraction of the global sales of the PS3 during the same period. Furthermore, the installed PS3 user base will be more than double that of the Xbox 360, despite the fact that Microsoft will have enjoyed a full year on the market without next-gen competition."

-Strategy Analytics Professional Forecast for 7th Generation

"PS2-style dominance will not be repeated in the next generation hardware market: we anticipate that competition will be far more intense with market shares split on a territorial basis. PS3 will have the dominant market share in 2010 with Wii in a distant third."

-Screen Digest Forecast from Professional Analyst Barton

"Consumers may hope for improved graphics, and my guess is that Nintendo will comply.

"In two or three years, commodity prices for graphics processors and CPUs may decline to the point that a High Definition Wii could be introduced. If so, Nintendo will likely introduce one."

-Michael Pachter, as reported by GamePro, 7/31/2007 (Pachter would repeat this assertion until ultimately retracting it in September 2008 on a Bonus Round episode.)

The cumulative WORLDWIDE sales for each platform are as follows:

Sony PlayStation 3
2006: 1.0m
2007: 19.5m
2008: 35.5m
2009: 50m
2010: 62m

Xbox 360
2006: 10m
2007:  20.5m
2008: 30.5m
2009: 39m
2010: 46m

Nintendo Wii
2006: 4.0M
2007: 10.5m
2008: 16.5m
2009:  21.5m
2010: 25.0m

-SFG Resarch 01/09/07

 

"Nintendo's Revolution will be its last console, it's a two-horse race right now."

-Red Herring

 

"The following is just speculative fun. But it is based firmly in reality.

"The Microsoft Xbox 360 is very, very well designed. Part of this design genius is ease of manufacture and potential for cost reduction. So I see this console as having a ten year life. This should easily see it up to 2015.

-Bruce Everiss, Seeking Alpha Investment Site, "Microsoft's Xbox 3 Could Give It Market Supremacy" 01/13/2008

EGM: "Do you wish Microsoft had come up with the idea for the Nintendo Revolution controller?"

BG: "Uh...no. [Laughs] We'll watch and see. Holding two different things like that? Anyway, Nintendo...you've got to give it to them. They march to the beat of a different drummer. Sometimes that makes them incredibly right and sometimes that makes them incredibly wrong. They're certainly making a very different bet in terms of how much they're putting into the graphics this time. I do think there is a question as to whether they can get outside the young age bracket at all. That's been tough for them."

-Bill Gates answers EGM's question via 1up. Source: "Moore's Law"

"There's room for innovation here, but moving that controller around — it's something that's not mainstream for most games. It's tough because sometimes you move the controller, and you don't [mean] to fly into the ground. You just want to put the controller down," he said. "People aren't that good at totally standing still. Even pilots actually sit in a chair when they do their flying. So there's a lot to be learned about these controllers."

-Bill Gates. Source: MTV News, "Bill Gates Wary of Motion Sensitive Controllers, Solo Gaming"

"We expect Nintendo's Revolution, based on its price and immense catalog of downloadable games, to be the market leader by 2010," Runte told GameSpot News. "Nintendo is going to be one heck of a competitor for the gaming pie, and from the looks of it, I think they are going to get a rather huge slice."

Runte says it's not only that Nintendo has "superior strategy" and is "totally awesome"; it's Nintendo's rivals' weaknesses that give the Revolution the advantage. He dismisses the competition as a non-factor and had particularly harsh words for Sony.

"Sony has yet to come out of the pit stop after the first lap. Folks, when this race started, naysayers said Nintendo would not have enough under the engine to compete with Microsoft and Sony. Trying to one-up Nintendo like they did with them wanting to make a Revolution-style controller after it was revealed and oohed and aahed over... Nintendo is back in a big way. I think Nintendo will own them all. I believe they are on the path to domination once again. I think they finally are giving people what they want and continuing to give them things they never thought of."

-Gamespot, April Fool's Joke 2005

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Executives The Revolution has Taken Out

 

Ken Kutaragi


Peter Moore


Phil Harrison

... plus more to come! Who will be the next executive taken out by The Revolution? Perhaps I will start a betting pool.