Finding Nintendo's Sword

Value Innovation Define Blue Ocean Strategy and Disruption

Those who do not understand ‘Blue Ocean Strategy’ (though think they do) will describe it in these banal simplistic terms:

”Growing the market.”
”Selling to non-consumers.”
”Not competing.”
”Turning the product casual.”

With disruption, they, again, choose the most basic terms:

”Changing the market.”
”New technology.”
”Making something new.”

It is well known that Nintendo is financially conservative, yet they bet the farm of billions and billions of dollars on both Blue Ocean Strategy and disruption. Do yourself the honor to stretch beyond the five minute readings and cliff notes to appreciate the vast investment Nintendo made in these ideas that are reshaping the video game world. Let us strive to understand the ‘Revolution’ better; we shall not love it any the less.

Blue Ocean Strategy and disruption are about value innovation. Blue Ocean Strategy uses value innovation to attack indifference. Disruption uses value innovation to attack competitors. These two strategies are confusing because many believe that Blue Ocean Strategy is a pacifist approach, i.e. ‘non-competing’ and that disruption is a hostile approach, i.e. competing. How can a company adopt both strategies? The answer is that people do not really understand the Blue Ocean Strategy at all which makes understanding disruption even harder.

The premise of Blue Ocean Strategy is value innovation. Most companies attempt to increase value by throwing more features than their competitors into the product. Instead of just playing games, consoles are now marketed to play CDs, DVDs, Blu-Ray movies, download digital movies, and all sorts of other ‘values’. Value innovation differs by taking away values which are ones customers do not care for since in value innovation, the non-customer is the king (instead of the customer always being right, the non-customer is actually the one who is right). By removing these excess values, the Cost of Goods Sold is much lower than the gross margin and the volume of sales becomes much higher. Since people buy game consoles for ‘fun’, it makes sense that graphics, sophistication, and movie functions can be overshooting values. Which is more appealing to the masses? A two course meal created by the best ingredients, prepared by a talented chef, and served in a plain atmosphere by a friendly and prompt server or a lousy eight-course meal served by a crank in a palace? Consider how Google, who came late to the ‘search engine’ competition, won by removing values (typical clutter on search engine front pages) and focusing on what the customer truly desired (a good search engine).

The premise of disruption is also value innovation. Most companies rely on sustaining values which are incremental upgrades to the product that its most demanding customers want. A disruptive innovation is the use of technology, not for the existing customers, but for the non-existent ones. As the non-customers become new-customers because of this value innovation, so too do the old market customers adapt to this value innovation. The new value innovation eventually replaces the old overshooting one and the paradigm shift is complete.


The Tiers of Blue Ocean and Disruption

As you can see, the Blue Ocean Strategy and disruption are the shoes on Nintendo’s feet; they travel further with both than just one. However, not every Blue Ocean product is a disruption. The iPod Touch and iPhone are Blue Ocean products, but they are not disruptive.

Everyone conveniently forgets that the subtitle of Blue Ocean Strategy is “Make Your Competition Irrelevant.” How does a company make its competition ‘go away’? It is done by changing the values. The nature of competition is not the competitors but the rules for the basis of competition. A foot race has its competition based on speed to the finish line. A change of values would be one of the contestants focus on entertaining the audience than focusing on ‘speed’ by doing cartwheels down the track.

A very real example would be the 2000 Sydney Olympic Games where Eric Mousambawi, from Equatorial Guinea, qualified for competition not due to a minimum time standard but by winning a wild card entry. The intent of the ‘wild cards’ is to make the Olympics a truly world-encompassing event so such cards are allocated to athletes from small, third world countries who would otherwise have no chance to meet the competitive standards. When the race started, the swimmers arrowed into the water as they normally do while Eric struggled due to being uninitiated in the ways of a diving start (and this was his first time in a full size swimming pool). He didn’t even swim ‘right’ as he flailed and splashed his way like an eel. Somehow, (in last place by far of course) he managed to finish the 100-meter to the spectators’ uproarious reception. This caused him to become one of the most talked about athletes of the games, gained him worldwide fame, celebrity invitations and attractive promotional opportunities. Why such raving success for the worst swimmer in Olympic history? Because he unintentionally sidestepped head-on competition with his much more qualified rivals, and instead gave spectators what they really wanted: inspirational entertainment. Eric also dramatically reduced the cost of his investment: he started swimming just six months before the Olympics. While Eric didn’t end up with the gold medal, he did end up with the gold (and what else really matters?).

If Eric’s approach had been ‘disruptive’, the values of the Olympics swimming race would become changed eventually into inspirational entertainment instead of speed. Guys like Eric would be the new standard of Olympic swimmers while the speed swimmers would become a thing of the past (and wouldn’t know how to compete in such a new environment). While the Olympics won’t change in that way, the market easily does. Disruption is about how new market values eliminate the old market values, i.e. new world destroying old world.

Both Harvard School Business teachers give a series of tiers for both Blue Ocean Strategy and disruption as a manner of levels for the strategy. Let us examine where Nintendo is on the Blue Ocean Strategy tiers.

TIER ONE: Soon-To-Be Non-Customers

Game journalists have spread the misconception about tier one by simply saying it is reaching for ‘non-gamers’ for the Blue Ocean Strategy. Tier one is actually about soon-to-be non-gamers or current customers that are about to leave. (In the generations since the NES, these demographics of girls, parents, families, and elderly USED to play but left over the last few decades). This means current gamers (who are beginning to get bored but might not know it yet), former gamers (who used to like gaming but are bored), and non-gamers (who do not game because of a barrier like complex controls or no suitable content for them, e.g. Brain Age, Nintendogs).

The standard Wii appears to have fit this tier entirely. While I mistakenly believed Wii systems reaching retirement homes was the third tier, it appears that it was actually the first tier. Retirement homes were always ‘soon-to-be’ non-customers. They had the time, they had the money, but the content and controls were barriers for them WANTING to play.


The explosive launch of Wii, due to Wii Sports, captured ‘soon-to-be’ customers.

Microsoft is quite the expert on how to do the Blue Ocean Strategy backwards. Vista is a disaster for it has given the excuse of many tier one people, those current customers ready to leave, a reason to leave and find an alternative. People were already bored and discontent with Windows. Vista gave them no reason to stay. Sony’s pricing of the Play Station 3 also was a straw that broke many tier one people’s back. “What!? $599!? Forget it!” The point is that these users were close to being non-customers anyway. Such products just gave them the excuse they needed.


TIER TWO: People who consciously decide against your product

They are not people who decide against gaming because of a barrier (such as lack of content for them or confusing controller). These are people who choose to be against gaming for reasons other than indifference. They are actually hostile to gaming.

Now, why would someone be hostile to gaming? The most common answer is its geeky image and how unhealthy it is. So, Nintendo comes up with this:

Healthy gaming. Beautiful gaming.

Listen to what Nintendo vice president, Cammie Dunaway, said.

”It's [Nintendo’s Advertising Blitz] really about us thinking about our expanded audience: women and moms. We believe that they are not waiting around to see the latest and greatest news from Nintendo like a core gamer might be. So when she hears about Wii Fit or is interested, she goes and buys it. She doesn't necessarily want to wait for two weeks or stand in line. We felt like it was more appropriate to have less time between the start of the advertising and the product being available.”

-Cammie Dunaway, NOA Vice President speaks in an interview with Wall Street Journal

It is evident the biggest marketing campaign since the Wii’s launch  (which would be Nintendo striving to the first tier) is the launching of the second Blue Ocean tier which are ‘refusing customers’. Aside from the massive amount of money spent on the Wii Fit marketing campaign, another sign that indicates the product is hitting a major moment in Nintendo’s strategy is that Miyamoto is leaving Japan to showcase it. Outside the usual trade shows and console launches, Miyamoto rarely does a personal appearance for a product.


TIER THREE: Those in markets entirely distant

These people are beyond those who choose against gaming. At least those who choose against gaming know what gaming is. No one, not even the Blue Ocean Strategy experts, who have been keeping a careful eye on Nintendo, knows what this final tier will be.

I suspect tier three will be efforts to complement the gaming experience (but not gaming). What I am talking about is the top-box. Yamauchi wanted it badly for the NES. Finally, decades later, the Wii might finalize this deal. Achieving this tier would be something like people doing their stocks on the Wii, having Wii be the nexus of their television watching, Wii telephony, or something entirely distant.


What is this? What could it be? Not even the Blue Ocean experts know.

Nintendo’s huge customer base is again the doorway in. “Given the size of the installed base,” says David Leibowitz, at American Securities, “Nintendo is the most appealing platform for a network.” NOA could take advantage of all the NES households and also sell access to those homes to all kinds of businesses. “Open a video game and you find a computer, optimized for fun with special chips for zippy graphics and rich sound,” wrote John Schwartz in Newsweek’s look at “The Next Revolution” of computer-based technology in April 1992. “That’s a lot like the sort of machines that computer makers are hoping to make for the consumer-electronics market. Computer companies such as Apple will be hard-pressed to beat video-game companies at their game, says Mike Saenz, founder of Reactor, a Chicago-based entertainment-software company. ‘If they think they’ve got a technology that can compete against the entertainment machines, they’ve got it wrong.’ …Nintendo [in Japan] has already tapped the computer power within the game box: consumers use the consoles to bank at home, trade stocks and even to bet on lotteries and horse races…”

-David Sheff, “Game Over”, pages 390-391

Poor hardcore! Even the Famicom had non-games. Note how Newsweek called it ‘the next revolution’. Is there a pattern here? Will the Wii pick up where the Famicom left off?

Absolutely. Given that Nintendo's core-business has traditionally been making games, some might consider it strange that the "Forecast", "News" and "Game" Channels are given equal weight. Our team, however, had few doubts about this. The main reason I can give for our conviction was the "fun for the entire family" concept. Another big factor was that the Nintendo DS had been well received by so many people.

-Kuroume, Iwata Asks "What is Wii?"

But one of the ‘conventional truths’ is that Nintendo is little more than a toy company. How is such a network significant?

The network is significant because it is the first time Nintendo demonstrated that it had plans to be more than a toy company. It is the first time Nintendo has actively stepped on the toes of computer companies since the NES co-opted the games market.

Yamauchi’s plan was unveiled in 1989. “The network shows how the Famicom has outgrown its singular purpose as an amusement system,” he said. “It is our important business target this year.” A Japanese business magazine proclaimed, “The Famicom is the first mass home computer. Soon you will be fighting for time on the Famicom with your children.”

-David Sheff, “Game Over”, pages 390-391

I want to see families fighting over the Channels!
 

-Tamaki from Iwata's Ask "What is Wii?"

But I thought people only bought the Wii for game software. Are you saying that it is OK to have such non-game software?

Yes, the Nintendo DS proved that it's okay to have a variety of software, rather than just conventional games. This proved to be a major consideration when creating Wii's Menu screen. We felt that people who want to play games should be able to do so, while people who are interested in other features should be able to enjoy those Channels.

-Kuroume, Iwata Asks "What is Wii?"

Iwata:

One obvious argument against these Channels was that the news and weather can be checked using a computer. Some people said that Wii was becoming more like a PC than a games console. What conclusions did you draw from this?

Tamaki:

This kind of overlaps with what Kuroume-san said earlier, but I was very aware of the fact that people obviously have a wide variety of interests. Looking at Nintendo DS software sales alone, you can see that while non-conventional games such as "Brain Age" are flying off the shelves, more conventional games like RPGs are also selling well. To be honest, we did contemplate making the Disc Channel button stand out more when we first started planning the Wii Menu screen, but in the end, we felt that this kind of thinking was too orthodox. It's no different from the logic stating that if you release a top-class game, everyone will play it. However, we hoped that by equipping Wii with a variety of features catering to a host of people, then Wii could be the point where all these overlapping interests would converge. I think we ended up with the broad principle that the Menu should be full of variety, since the age and interests of each family member also vary. That said, I'm not sure that everyone would agree with me, but when deciding upon the features, however, we were completely confident in our conclusions.

-From Iwata Asks "What is Wii?"

Now I can hardly wait to see how people respond to the console. I don't mean whether they like it or not; I mean it in the sense of wondering what uses people are going to find for Wii. I think we've really come up with something pretty special.
 

-Satoru Iwata from Iwata's Ask "What is Wii?"

As cool as the ‘Nintendo Network’ sounded, why didn’t it work out?

But all the early hype and promise of the network (and Nintendo’s lofty projections for it) remained unfulfilled by the early 1990s. A survey in Japan diagnosed that one of the biggest stumbling blocks was Nintendo’s name. In spite of its size, it was still viewed as a toy company, and most adults cannot conceive of using a child’s toy for business. In addition, as an article in a Japanese newspaper pointed out, kids refuse to relinquish the video-game controllers to their parents.

-David Sheff, “Game Over”, pages 391-392

Q: Sony has turned their box into a DVD player with Blu-ray and Microsoft has done the same thing with HD-DVD. What do you think about this idea of dominating the living room.

A: We've sold 4 million Wiis in the U.S. We have, depending on the week, depending on the month, 50 to 60 percent of the Wii's Internet-connected. So when you talk about a box that is creating a living room experience tied to the Internet, we're doing it.

-Reggie Fils-Aime, San Francisco Chronicle interview

New Technology IS involved in both Blue Ocean Strategy and Disruption

Most game journalists care nothing to learn about disruption, but some are able to push themselves to barely read Christensen’s first book called Innovator’s Dilemma. The book is filled with terms that Christensen changes because the book went to the printers before he could correct it. The use of the word disruptive technology is one of them. While technology is a very important part of disruption, new technology itself is not disruption.

The bigger problem is how no one connects the use of technology to the Blue Ocean Strategy. Not only do commentators rant that cutting edge technology has nothing to do with innovation, they even say Blue Ocean Strategy supports this notion.

The Blue Ocean Strategy (as well as disruption) places customer value at the center of any new product offering. Customer value is never defined in terms of raw technology, but in how the technology is catalytic to the value: the value will not get realized without the technology. For example, high definition resolutions are a raw technology as are processor speeds. A type of technology that is catalytic in value would be accelerometers (which have been getting cheaper over time as they are used in air bags in the car industry). The accelerometer allows the creation of the Wii controller. However, Nintendo is not marketing accelerometers. Sony is marketing Cell chip, Blu-Ray, and high definition television sets.

I enjoy using Google as an example. Google uses a technology of a search algorithm and massive data centers which allows excellent web search. However, the end users never see the technology.

In E3 2005, Reggie Fils-Aime said to keep thinking with your ‘right brain’ instead of your ‘left brain’. Undoubtedly, he was trying to express this concept and use of technology back then. The end user feels the technology but never really sees it.

Iwata went further by even saying:

” I suppose I could give you a list of the technical specs. I believe you would like that, but I won't for a simple reason; they really don't matter. The time when horsepower alone made an important difference is over.”

-Satoru Iwata, E3 2004

Is Iwata suddenly saying that technology no longer matters?

” Please understand, I am not saying that technology is unimportant. I understand that technology is important. But if we are just focusing on technology and investing in an IT manufacturing plant to come up with higher performance processing [chips], we will not succeed.”

-Satoru Iwata, “Nintendo’s New Direction” interview by Steven Kent

While one might confuse disinterest in graphics and horsepower to mean disinterest in cutting edge, listen to what Iwata says below:

”Of course, we are applying advances in technology. But when you use those advances just to boost the processing power, the trade-off is that you increase power consumption, make the machine more expensive and make developing games more expensive. When I look at the balance of that trade-off -- what you gain and what you lose -- I don't think it's good. Nintendo is applying the benefits of advanced technology, but we're using it to make our machines more power-efficient, quieter and faster to start. And we're making a brand-new user interface. I think that way of thinking is the biggest difference.”

-Satoru Iwata, Q&A: Video-game industry maverick promises a Revolution. Seattle Post-Intelligencer.

Miyamoto fleshes out how Nintendo is using technology further:

”You know, I didn't get a chance to see the Sony and Microsoft presentations for myself, but from what I've heard from people it sounds like they are going to be using cutting-edge technology, as are we. However, the way that they are planning on implementing that technology is obviously very different from the route that we're going to be taking. On the business side of things I see where we're going and I see where they're going and I'm not worried at all. I don't think it's going to influence us at all. We're good to go.”

-Shigeru Miyamoto, IGN interviews Miyamoto at E3 2005

Miyamoto even says it again:

"The Revolution will use cutting edge technology, but it's ultimately about how that technology is used. We asked ourselves 'why would a family need or want to have a gaming console?' The answer is what's driving development of the Revolution."

"Most of what you're seeing are not even the first projections of games [of Sony and Microsoft systems]. They're just shiny computer graphics. They're things anyone using a computer can do. ... It's how we're going to use the technology that separates us. What we want to do is different – and we're happy with the road we're taking. When you have a Revolution, you're not going to have the same experience as you would with the other home consoles."

-Shigeru Miyamoto, Interviewed by Chris Morris (Emphasis is Miyamoto’s)

And for further proof that cutting edge technology is used in the Blue Ocean Strategy (just in a different way), let us turn to the book itself:

"[acting] on the assumption that bleeding-edge technology is equivalent to bleeding-edge utility for buyers ... is rarely the case."

-Blue Ocean Strategy, pg. 120.

All the examples in the Blue Ocean Strategy book use technology. Technology DOES drive industries. Cutting-edge technology DOES drive the Wii. It is just that technological innovation must be defined in terms that drive utility to the end user instead of the technology by itself. Game journalists and developers who rant that Wii has ‘no technology’ are just trying to cover-up their own unwillingness or inability to learn about the context of bleeding edge technology to drive utility to the end user.

For disruption, technology is used almost entirely in the same way. Disruptive products do use new technology. However, disruptive products are always seen as ‘crummy products for non-consumers’ because this new technology is utilized for a new value instead of increasing an old one. With the Wii, the technology of accelerometers is used to create the value of motion controls. It is cutting edge technology but since it is applied to a different value than that of graphics and horsepower, avid customers mistake Wii going backwards or not going anywhere since they only see the old values and do not see the new ones. The reason why new people buy the Wii, and will not graduate to Xbox 360 or Playstation 3, is precisely because of that new value (which is sorely missing on the other systems).


One of the Many Reasons Analysts Missed the Revolution

Every analyst considered the ‘Revolution’ to be third place. Even on the eve of Wii’s launch, analysts detecting some of the hype began to put in disclaimers saying, “Wii could be a spoiler…” while repeating what that Play Station 3 will ‘win’.
 
As the Wii took off like a farg out of Hell, the poor analysts must have been very confused. Yet, while some could change their contexts and see the vast change occurring, others wrote the same story: Wii fad will end in 2007, 2008, no 2009 while Play Station 3 skyrockets at the end!

Screen Digest is a fun microcosm of this. Starting from the present and moving backward, I will show how Screen Digest’s view was persuaded more by time than by real analysis. In the end, there is a major reason for this generation for how the analysts went off the reservation.

Dec. 10, 2007


Screen Digest, among others, has Play Station 3 turn into a miracle console that somehow rockets at the end.

"Whereas in 2007 Nintendo has succeeded in expanding the appeal of the Wii to different consumers, including more females and older consumers to drive adoption, Sony's pipeline of exclusive content and the launch of multimedia services may result in a significant uplift for the PlayStation 3 in 2008,"

–Screen Digest, "PS3 to Catch Wii... in 2011"

Screen Digest finally has Wii ‘winning’ in the end but only ‘barely’. Still, Screen Digest has Play Station 3 ‘surging’ in the end mostly because of ‘multi-media hub’. Note that I bolded the ‘pipeline’ comment which will become very important in a moment.


June 20, 2007

“The Wii's target market could be saturated more quickly than its competitors as the technology looks increasingly tired by comparison.”

The firm goes on to claim that: “Most publishers’ European management teams feel that the PS3 will win-out by the end of the current console cycle, especially in Europe where the brand still appears to be impregnable.”

-Screen Digest, Mousetrap Technology, "Why the Wii Could Fall in 2008"

Months earlier, Screen Digest was still declaring Play Station 3 to ‘win’. Why? The ‘technology’ of Wii would become too ‘dated’. Such analysts seem to know absolutely nothing about technological value in regards to The Blue Ocean Strategy or disruption as explained at the beginning.


February, 2007


Remember this?

Outside of being totally ignorant on how Blue Ocean Strategy and disruption REALLY are about and the contexts it demands, there is a common theme that connects these analysts to their failed predictions. Look below where Screen Digest explains that it is ‘impossible’ to analyze and track the Wii (impossible only in their current context):

"The one thing I would admit is that Nintendo's strategy with the Wii is, at the moment, the great unknown. Can they repeat the kind of success that they've had with the DS by applying that strategy with the Wii? Absolutely, if Nintendo can make this work on a home console and appeal to those demographics outside the core gamer constituency, the potential is absolutely huge."

"However, we also have a lot of faith in the ability of, in particular, Sony, which we see has really got a huge amount of development resources, and they are backing the PlayStation 3 to enormous unprecedented levels for a first party publisher."
 
"One of our core beliefs, is that no one buys one of these plastic boxes on technical specs alone, people tend to buy them for content. Our forecasts at the moment are based on the belief that PlayStation 3 has this level of support [of resources]. The numbers that we're seeing now for the Nintendo Wii, they've come out of the blocks fantastically strongly – no one would deny that – however it's incredibly early in the hardware cycle. There's still another five or six years to play out on this one, and the first big battleground will be Christmas of 2007."

"There's also a third pillar, in that the PlayStation 3, and this is also true for the Xbox 360, is, if you like, a domestic broadband hub, the magic box which enables a consumer to buy premium content delivered over broadband. And so, if Microsoft and Sony can execute and convince consumers to buy content delivered over broadband stored and played in the magic box, then this could grow the market for the particular games consoles, and also has an influence, in my opinion, on how the market will shape up over the next five or six years."

-Ed Barton, Screen Digest from Gamesutra, "PS3 to Lead to 2010, Wii is 'great unknown'"

Clayton Christensen places analysis in a triad of RPV: Resources, Process, and Value. Christensen then says… well, it is best to let him speak for himself:

”Let’s say your friend asks you who you think will win Saturday night’s big prizefight. You have never heard of either boxer. What do you do? You quickly flip to a chart in the newspaper that compares the two boxers’ heights, weights, historical records, bicep sizes, and so on. This tale-of-the-tape chart gives you a reasonably good sense of each boxer’s strengths and weaknesses.

”We need a similar way to take a firm’s tale of the tape. Most people start and end with what is most visible and obvious: a firm’s resources. They see a company’s fixed assets, its technology, its cash reserves, its product lines, and the resumes of its management team and think that possession of superior resources determines success.”

-Clayton Christensen, Pages 31-32, “Seeing What’s Next”

Starting and ending with a firm’s resources is the error of Screen Digest that has continued to have them cast wrong predictions for this generation. However, this error is far more widespread and can be seen in Wedbush Morgan Securities, Research and Markets, Strategy Analytics, among others.

The reason why analysts keep saying Play Station 3 will win is based entirely on resources. Ask an analyst about Blue Ocean Strategy or disruption and not one of them will have an answer because that is value and process based, not resource based. They chatter about price cuts and allocation of hardware because those are answered by resource analysis.

Based solely on a resource analysis, Nintendo, naturally, always loses. Nintendo does not have the vast resources Sony has (from making new chips, to new multi-media content, to factories) or Microsoft has (can leverage the entire PC platform, can spend billions of dollars with no profit). When someone looks at Nintendo’s resources, all they see are popular franchises (Mario, Zelda, Pokemon). It also explains why analysts can only look at the Wii and see ‘fad’ for Nintendo lacks the ‘resources’ that Microsoft and, especially, Sony have.

How would Nintendo counter the constant resource analysis? How would Nintendo attempt to get investors to look more at the process? The answer comes with Iwata Asks series. Iwata says the reason for Iwata Asks series of interviews is to put the spotlight on developers who normally don’t get the spotlight. While that is true, I suspect it is only true in part. Why would secretive Nintendo, who has been closed forever, suddenly begin interviewing its own staff? And these interviews with the staff have one thing, and one thing only, in common: to illustrate the unique process of creation in Nintendo.


The Upcoming Asymmetric Battles

In this article, I have attempted to illustrate the following:

1) Blue Ocean Strategy (attacks indifference) and disruption (attacks competitors) hold, at the core, asymmetric values than the traditional values that rule the incumbent marketplace.

2) The values that are the core of Blue Ocean Strategy and disruption are propelled by cutting edge technology used in a context of customer utility (as opposed to traditional competing upgrades).

3) Analysts commonly miss market disruption and the rapid creation of new markets because they tend to analyze only resources, rarely processes, and never values (especially from a non-consumer perspective).

The result of having two very different value based products in the marketplace is asymmetric battles. The two cannot co-exist. One value has to go. When the new value wins its asymmetric battles, it becomes the industry standard and the paradigm shift is complete.

When the Wii exploded into new markets, the old value industry expressed surprise but thought it would not affect the incumbents or, at least, affect them favorably if new consumers ‘graduated up’. But like any disruptor, the Wii is beginning to move upstream. This action, alone, causes the two values to collide. It explains how we’ve suddenly come to New Generation versus Next Generation (often expressed in the ‘Casual vs. Hardcore’ context) as they debate viciously on the Internet. We have observed journalists scoring a new value game low, even write open letters to Nintendo complaining about it, while many gamers think the game is amazing. As this generation goes on, this divide will only deepen.

Instead of a traditional console war of three camps (console war is a result in all consoles having symmetric values), we are witnessing an asymmetric war of two camps: Next Generation where the value is placed on visuals and immersion and New Generation where the value is placed on interface and pick-up-and-play.

Christensen writes that in order to win the asymmetric battles, the disruptor must have a ‘shield’ and a ‘sword’. In the previous article, “Finding Nintendo’s Shield”, we isolated the unique motivations behind the Wii that competitors lack which will deflect counterattacks from the incumbents until a ‘sword’ is fashioned to slash upstream.


The Power of the Asymmetric Sword

The power of the asymmetric ‘sword’ is by adopting skills that produce technology that delivers service at a fraction of the current cost. The cheap price alone instantly cuts the value of the existing market as a whole meaning no money in it anymore for the established high overhead businesses. The goal is to starve the old guard of revenue and watch them die.

When the $1000-a-set Encyclopedia Britannica phenomenon was still going on, Microsoft uses their asymmetric ‘sword’ (unique skill of software) to make the $99 Encarta CD ROM. Microsoft’s asymmetric ‘sword’ slashed Britannica’s market by half, and Microsoft kept swinging slicing Britannica’s profit to almost nothing.

Of course, the asymmetric sword cuts both ways. Wikipedia’s free online encyclopedic library is destroying Microsoft’s market domination; no cost online tends to beat a $99 piece of plastic. Of course, one day another Asymmetric Sword will rise and slash Wikipedia to pieces but that is the future.

Sony, too, used to be an experienced disruptor. As a newcomer, Sony slashed its Asymmetric Sword (skill in transistors) at radios, cutting to pieces the radio standard in the day, and vacuum tubes, stabbing into the incumbent being RCA.

Why are incumbents so vulnerable to the Asymmetric Sword?

”One reason is an asymmetry in financial incentives. A disrupter might look at a million non-consumers and see a huge opportunity, whereas the incumbent sees a drop in the ocean. Initially, moreover, the incumbent will find being disrupted very pleasant, because the customers that defect first are likely to be the unprofitable ones. As its own profit margins improve, the incumbent will be tempted to ignore the competition. The disrupter now makes its own sustaining innovations until its technology becomes ‘good enough’ to poach the original market, at which point the incumbent is gored.”

-“The Blood of Incumbents”, The Economist, Oct 28th, 2004

But what is this asymmetric ‘sword’ that will tear the game market apart? What skill does Nintendo possess that Sony and Microsoft do not? What type of ‘sword’ will Nintendo use to carve out a new Industry?


Nintendo’s ‘Sword’

Nintendo’s sword: an 'ancient gaming' skill unleashed on the present.

The arcade industry forged gaming companies to not be hardware or software orientated but both in an integrated fashion. Arcade games demanded expert craftsmanship in the hardware interface as well as the software or the game would not succeed in the cut-throat competition. It only took a consumer two minutes to say, “The controls do not feel right,” or “This game isn’t fun,” and walk away to a competitor. The consumer would only lose a quarter while, today, the consumer can lose $50 or hundreds depending on the machine and software that is bought. As competitive the game industry seems today, it is nothing compared to how harsh it was back then. Or, rather, it was different in that it was a battle of ideas and not so much as ‘production quality’.

Atari started the fire, and the massive amount of profits attracted competitors. Atari innovated and innovated and stayed ahead of the competitors. While history books show dreary images of 70s and early 80s arcade games looking something like some blocks on a black screen, there was an excitement and energy in the market similar to the NES days and, I can happily say for younger people to finally experience such phenomena, the Wii. The ‘craze’ people had for Atari was not unlike the enthusiasm Sega fans have for Sega or Nintendo fans have for Nintendo. Find a past enthusiast (if you can) from the Atari Era and ask about what went on; you will be very surprised especially if you think gaming began with the Atari 2600 or NES.

There were no other integrated software and hardware developers (especially when IBM unbundled its software from its hardware). The personal computer revolution came from hardware manufacturers who put on a software operating system (most often Microsoft’s). The makers of VCRs did not make movies. Television manufacturers did not make the TV shows. The makers of radios were not the disc jockeys. Atari, the first of the new integrated hardware and software companies, became, at the time, the fastest growing company in American history.

The usually unmentioned story of Atari was, aside from being an integrated hardware and software game company, they became an integrated hardware and software computer company. Atari computers were released and spawned similar integrated hardware and software competitors. An employee of Atari, Steve Jobs, would found Apple (which, to this day, is still an integrated hardware and software company).  Steve Wozniak designed the Apple II based on his experiences with developing the Atari game Break-out. Atari’s success brought in new competing integrated hardware and software companies as well as separate hardware and software companies working together.

When Atari crashed, one of the reasons was the top-down disruption of the personal computer (“which also could play games” as the TV commercials kept reminding). The belief was that these personal computers, especially the ones selling to gamers as a type of 'trojan horse', would become a nexus of the household controlling all content, including operating the washing machine and dish washer. This ‘dream’ of the omnipresent platform was destroyed by the arrival of a disruptor called the NES who slashed many of the ‘game centric’ computers to pieces. The less game centric integrated hardware and software computer companies were starved to death by the rise of Microsoft and its cheap hardware creating partners where only Apple survived… and just barely.

When the second great gaming boom occurred (with the launch of the NES that, also, attracted widespread competition), the secret fear of Nintendo, Sega, and others was that a gigantic sized electronics maker could enter the market, utilize their factories, and their chip making to put out hardware at rock bottom prices where the small fledgling game companies could not compete. Such a big corporation could use its massive pocketbooks to buy development studios, purchase exclusives, and release hardware at a huge loss. When NEC entered the market, it was believed that they would become this nightmare. However, the TurboGraphx-16, successful in Japan, failed to find similar success in North America. Soon, NEC left the market. The little game companies’ sigh of relief was short when their nightmare became realized: Sony entered the market.

Some will undoubtedly object to my labeling Sony as a ‘nightmare’, but they clearly were from the little game companies’ perspective. Allow me to give an example with Sega.

Sega was intending to beat the 3DO with its planned console, the Gigadrive. But news of the Play Station and leaked specs got to the enraged Sega president. Play Station’s 2d graphics ran rings around the SNES, the 3d graphics were as good as the arcade and high end PCs, and the development libraries Sony had on hand made the new console easy to program giving Play Station more appeal to the Industry than Trip Hawkins and his 3DO team ever dreamed. The Sega president had Sega re-make their console to compete against the Play Station resulting in the Saturn.

At the first ‘E3’ on May 11, 1995, the console companies were to give their keynote addresses on the first day. Sega went first. Kalinske shocked the audience by saying the Saturn would still ‘launch’ at September 2 as originally announced, but they would start shipping consoles to users today. The stunned audience listened as Kalinske announced the price for the Saturn would be $399. The audience excitedly applauded, and the Sega representatives felt relieved. They had won.

Sony president Olaffson went up next. As he talked about the Play Station, he stopped two thirds in the speech to call up Steve Race (President of US subsidiary of Sony Computer) to talk more about the Play Station. Race walks up to the podium with a thick sheaf of papers in hand, and the audience braced itself for a long, boring technical demonstration. Instead, Race put the papers on the podium, leaned over to the microphone, and said, “$299”. The audience erupted with applause, and the Sega delegation knew they had failed.

The Saturn’s failure would destroy Sega, as a console company, while Nintendo struggled against Sony. Microsoft, paranoid how Sony was attempting to use video games as a means to disrupt computers in the living room for being a ‘top box’, entered the market. Nintendo’s Gamecube sold worse than newcomer Microsoft’s Xbox. It is no wonder analysts were so pessimistic about Nintendo’s chances. The important thing is to know why they were pessimistic.

”Strategy Analytics recommends that Nintendo abandon its traditional console-exclusive software publishing strategy and publishes its games across multiple platforms. The company stands to lose relatively little, while gaining access to an additional 77 million console owners during 2003.

"Nintendo is missing out on the current generation of games players. Culturally it will be difficult for the company to change course, but it must do so in order to secure its long-term position as a leading games publisher."

- David Mercer, VP of the Strategy Analytics Global Broadband Practice (Feb. 2003), N-Europe: "Multiplatform Nintendo Titles?"

IGNcube: We're all assuming that the revolutionary aspect of Revolution is the controller. Do you know what the Revolution is yet or are you still trying to figure that out?
 

Shigeru Miyamoto: [Laughs] You're doubting me, aren't you? I can see that you're over there mistrusting my word. I understand. [Laughs]

Of course. It's set in stone. It has been determined. I'd love to show it to you. I'd love to be able to show you the features of the Revolution controller and tell you about them. However, unfortunately if we do that too early those ideas would be stolen. We know that from past history. Analog stick. Boom - gone. Rumble Pak. We bring it out and everybody has to have rumble. We got the wireless out first and now there's wireless everywhere. So we have to keep it under wraps.

-IGN interviews Miyamoto at E3 2005

Keeping quiet about the ‘Revolution’ until the last possible second, this allowed Nintendo to use its ‘sword’.  No longer would Nintendo let competitors take their ideas easily.

This is Nintendo’s asymmetric sword of the last standing integrated hardware and software gaming company. The asymmetric sword cuts both ways and only two outcomes were possible:
 

”If it [the DS representing the new context] succeeds, we rise to the heavens, if it fails, we sink into hell.”

-Hiroshi Yamauchi, Third President of Nintendo

The DS was simply the prototype of the asymmetries. Let us look at where Nintendo went from there.

 
New Generation’s Arsenal

Nintendo’s asymmetric sword will not only attack upmarket, it allows Nintendo to change the values consumers look to for games.


The DS



Only an integrated hardware and software company could come up with the design of the DS. The touchpad, the two screens, and the microphone allow Nintendo to create software that the PSP could never do such as Brain Age or Nintendogs. While the DS is not a truly disruptive platform, it does illustrate how the strange elements made it immune to traditional competitive values.


Wii Hardware



The Wii, itself, could only be designed with Nintendo’s asymmetric skill. While Nintendo applied cutting edge technology to make the system smaller, cheaper, the biggest change was having the console on all the time. This allowed the ability of WiiConnect24 that will allow unique gameplay elements the other systems cannot do. While this feature hasn’t been utilized much yet, realize that Wi-Fi was sitting dormant in the DS for a year before Nintendo did something with it. WiiConnect24 will likely be a major focus in the years ahead.

A Wii development kit costs around $2000 which is significantly cheaper than its competitors. By controlling the hardware, Nintendo is intentionally undercutting development costs for their own profit margins as well as giving as many incentives as possible to attract third parties.

Changes Values By…

-Changing the relationship of game console and televisions.

People turn on their television sets everyday to find out weather, news, to see what everyone is thinking, and watch new content. It is no coincidence that WiiConnect24 focused on weather, news, to see what everyone is thinking (everyone votes channel), and play new content (new games such as new Virtual Console and WiiWare games each week). Receiving messages from people or Nintendo causes the Wii to glow blue causing the consumer to return back to the console again and again.

-Changing the relationship of game console and online.

Since online is on all the time, this allows new gameplay possibilities that are not possible with the traditional route. What these new gameplay possibilities, only Nintendo knows. But with Animal Crossing Wii and other games, the possibilities will likely be explored. These new type of games will be unable to be made on the other systems which is why Nintendo sees a priority in making them.

The Wii Controller (and nunchuck)



This is the most obvious ‘sword’ resulting from Nintendo’s asymmetric skill. However, the Wii is not just all about the Wii-Mote as it is just one element in Nintendo’s asymmetric ‘skill’.


A Nintendo trailer unveiled at E32006. Interestingly, everything Nintendo showcases is spotlighting its asymmetric ‘skill’, of what it is doing that the incumbents cannot.

While the Wii-mote was supposed to ‘break down’ the barriers between gamers and non-gamers, the controller really is a very radical change of the typical controller philosophy. As everyone knows, the first consoles had the ‘controls’ on the consoles themselves. Only later were controllers separate from the console. The legacy philosophy of the controllers, since the days of Pong, has been that controllers were extensions of the consoles. What if, instead, controllers were extensions of the Human body? It is this change of thinking that led to the Wii-mote and to Wii Sports in general.

The other big feature of the Wii-mote is the expansion at the bottom. While the nunchuck is the most common addition, other peripherals could be included. This would allow a direct disruption as the costs for the new peripherals would be substantially lower than the competition due to the Wii-mote already containing the accelerometers, pointer, rumble, and Bluetooth wireless.

Since the nunchuck is the essential companion to the Wii-mote and very similar, it won’t be mentioned here. The classic controller, which creates no new values, was released only due to the nature of the Virtual Console and will not be listed here either.

Changes Values By…

-Changing the image of gaming

This is the value that Wii’s launch stormed the world with. The image of gamers standing around a TV, swinging their arms, moving around, was literally shocking to the market and explains the huge Wii tsunami that crashed as soon as the console was released.

What is more interesting is how the change of image affected consumers virally. Over twenty years ago, when the NES launched in America, it was figured out that the focus of commercials and trying out the game could not be on the standard controller. Watching people play using the regular NES controller was boring. Nintendo of America focused, instead, on the light gun and R.O.B. which were more entertaining to watch people use. It is fun to watch people use the Wii-mote, and this makes watchers want to try out playing it. By bundling Wii Sports with Wii in the Americas and Europe, Nintendo was able to propel this viral effect profoundly.

-Changing the relationship between the console and the television.

It is intentional that the Wii-mote looks like a TV remote. The idea is for the Wii-mote to be naturally placed on the coffee table just as the TV remote. Now, the Wii is not ‘competing’ with the TV as it is complementing it, as being a companion to the TV. No longer would Mom shove the Wii to a kid’s room, but, hopefully, place it in the living room attached to the main television.

The Wii Zapper



While it is easy for a gamer to say, “This is a chunk of plastic! I do not need it to point at the screen. Away with thee, Wii Zapper!” we must recognize that Nintendo does not just put out pieces of plastic for the thrill of doing so. There are reasons lurking behind the zapper.

A sad change in gaming has been that newer televisions cannot replicate the light gun experience anymore. While the pointer of the Wii-remote is not exactly the same, it does allow light gun type games to be made again… and only on Wii. No doubt, Nintendo jumped on this asymmetric opportunity.

Changes Values by…

-Changes the image of gaming

While it is fun to watch people swing the Wii-mote, it is not fun to watch them simply point it at the screen. It does not continue the ‘viral effect’ as motion controls did. The purpose of the Wii Zapper, while attempting to make shooting games ‘easier’ for new audiences, was more about making pointing to look very interesting. The idea was when someone saw someone with the Wii Zapper, they would be more likely to say, “I want to try that…”

”These are the kind of games that have people looking-on saying, "let me try." If they really have fun with this, I hope they will also try out more authentic types of FPS games introduced by third party publishers.”

-Shigeru Miyamoto, “Iwata Asks: “Link’s Crossbow Training”

Reggie talks about the ‘feel’, but the real purpose of the Wii Zapper is to make pointing look entertaining so the viral effect continues.

The Wii Wheel



No element of the Wii since the Wii Remote has expressed the asymmetric ‘sword’ of Nintendo so well. The Wii Wheel was packaged in with Mario Kart Wii so everyone got a wheel (even if they didn’t want one). Iwata coined the term ‘bridge game’ for Mario Kart Wii which means not a bridge between ‘casual’ and ‘hardcore’ but a bridge between ‘New Generation’ and ‘Next Generation’. The wheel causes new generation value gamers to travel upstream to a more sophisticated game. The wheel also would convert many ‘incumbent gamers’ to the values of New Generation.

This cannot be emphasized enough: the incumbents do not think the disruptor will travel upstream and take away its upmarket until it is too late. This does not mean Nintendo will make ‘hardcore’ games using the values such incumbent gamers know and expect (better graphics, more sophisticated gameplay). Rather, it means Nintendo will use the values that founded the new generation (pick-up-and-play, simpler gameplay) to make more sophisticated games. The next Zelda will not focus on being better looking or have more layered gameplay elements than Zelda: Ocarina of Time as Zelda: Twilight Princess. The next Zelda will take away gameplay elements, and, it will do this while focusing on using extensions of your body as the new controls. This ‘paradigm shift’ of values is basically the gamer, and industry, looking for progress beyond that was what was on the screen.

Mario Kart Wii revealed the asymmetric divide cracking through the market better than any game of recent memory. Gamers who clung to their ‘Next Generation’ values, including many reviewers, only saw the game as ‘weak graphics’, ‘casualized’ (oh, that word!), ‘gimmicky’ due to the shaking of the controller, and using less buttons than the previous incarnation. Other gamers discovered they actually liked (and preferred) using the wheel to their surprise. They also enjoyed the removal of ‘snaking’ and other complicated maneuvers that were a fixture in the series; they have adopted New Generation values. No longer do they look at the screen as sole progress for video games. This ‘conversion’ will continue as Wii software continues to pierce more and more upstream into the upmarket.

The wheel was an intentional addition to Nintendo’s disruption. Listen to the Miyamoto:

Q: It is interesting that your accessories here are all very simple and inexpensive. The contrast between your wheel and Microsoft’s wheel at $149 are very stark. Is that a deliberate strategy?

A: It is definitely deliberate. There are a few different philosophies behind it. Nintendo always wants to provide the most intuitive device and one that is easy for anyone to pick up and play whether they are a hardcore gamer, a young child or an adult. The devices need to be inviting. The Zapper and the Wii Wheel – while I wouldn’t call them cheap – we’re able to produce them in an inexpensive manner. They have a straightforward interface, they look inviting to people. Because there is no real technology in them, we can slip the Wii Remote in and they are ready to go in a way that is affordable for the mass market. Because of that, we’ll be able to provide new and unique peripherals that match new and specific play styles in different games.

-Shigeru Miyamoto, Mercury News Dean Takahashi: "An Interview with Miyamoto"

The introduction of Mario Kart Wii shows the wheel and the wheel users are given a special icon in the game. Nintendo is pushing the wheel because it is an asymmetric skill.

Changes Values By…

-Changes the relationship of the image of gaming.

To onlookers, the wheel looks like fun. It feels different as well. The blue circle, while ‘expensive’, was placed on the other side precisely so it would be seen. The wheel, like the Wii Zapper, is intended to promote the viral effect as watching someone simply twist the Wii-Remote is not entertaining.


Mario Kart Wii is mentioned in regards to the wheel and online.

-Changes the Relationship between the Console and Online

Nintendo is an integrated hardware and software maker so we must look at the software that is going out with the hardware (for the two are one). Mario Kart Wii includes a dedicated channel for the Wii which allows the user to track online progress as well as ghosts. In the game, itself, Mario Kart Wii is the most fleshed out online experience for the Wii (as of this writing).


The Wii Balance Board



Unlike the other peripherals, the Balance Board does not require the Wii-mote in order for it to be functional. Still, the creation of the Balance Board and Wii Fit shows off Nintendo’s asymmetric sword better than anything. Microsoft and Sony lack the skill to invent this.

The Balance Board illustrates Nintendo’s new controller philosophy that the controller is an extension of the player’s body, not an extension of the console. By creating the Balance Board with Wii Fit, the hardware and software work together to create an experience unlike any other.

Changes Values By…

-Changes the Image of Gaming

Instead of swinging a Wii-mote around, images of people dancing, ducking, leaning left to right, doing push-ups, swinging hips, and even Yogo poses again surprise the market. Unlike Wii Sports which was almost entirely entertainment based, Wii Fit focuses more on utility showing that video games can be a tool outside entertainment. This is a massive value change which explains why Nintendo is spending tons marketing Wii Fit.


The Image of Gaming again changes. However, it is more accurate to say that the Image of Gaming shows increased progress toward the controller as the extension of the player more than any game since Wii Sports.

-Changes the Relationship Between Console and Television

Wii Fit keeps bringing players back to the console to update their progress. A dedicated Wii channel is made so players do not have to keep inserting the Wii Fit disc.

Note that the television is often used for non-entertainment purposes such as the news and weather. While the Wii attempts to simulate this as well, the television cannot weigh you or track your progress. This gives added reason to keep the Wii console in the living room, as a center for the family, and less incentive to throw it into the kid’s room.


What's Next?

Not all the ‘swords’ above are new peripherals. Nintendo has no plan to flood the market with peripherals for most of the peripherals there are just attachments to the Wii-mote. It is likely that the future ‘swords’ will be utilizing WiiConnect24 with Nintendo made software to further penetrate upstream and convert incumbent gamers to the new values. With less peripherals, the value of changing the image of gaming will fade to building the values of blending the Wii to the television and online. Animal Crossing Wii will likely do something like this as would the next Zelda.


Paradigm Shift Allows Longer Platform Cycles

Ever since the NES, the life for a platform tends to be around five to six years. Instead of thinking the platform cycle is some inflexible Law of the Market that no company, no matter how desirous, can escape, it is interesting to note that several consoles were not tied to the five to six year platform cycle. The Atari 2600 soared until the Video Game Crash. The Famicom, released in Japan in 1983, did not see its successor until 1990. The Gameboy was released in 1989 and saw (a somewhat) successor in Gameboy Color in 1998.

While Atari was embroiled by Warner mismanagement and the resulting Crash of 1983, the NES would have continued market expansion had it not been the symmetric competition of Sega. Historians enjoy waxing nostalgic about the so-called great '16-bit Console War' but have forgotten the Asymmetric War of the 8-Bit Generation. Comparing the 8-bit Asymmetric War to the 16-bit Console War is like comparing a lance to a straw; there is no comparison.

Consider: video game platforms enter a bitter contest which revolves mostly around price cuts and then, a new entrant appears, whose graphics are a generation behind, brandishes a new controller that is completely different from the traditional controller, keeps putting out an ungodly amount of new peripherals that change the way how people can play a game, bundles a hit game with the console that kept moving systems, changed the definition of games, had major Western third parties trying to hold out as long as they could from putting games on the new entrant platform, raised a new generation of gamers who would know nothing of the 'old ways' but consider this to be now 'the standard', and created a new business model that turned colossal profits and a skyrocketing stock for the company.

Consider: before this new entrant appeared, investors sat on the edge of their seats and analysts high-five one another for the resulting end of such video-game platforms would result in the top-box nexus to control computing for the household. Year after year when the new entrant's sales kept growing stronger and stronger, analysts and hardcore gamers remarked that the new entrant was only a 'fad' and would soon collapse. To everyone's astonishment, as the new entrant's sales increased, the incumbents sales' began to decrease until one after another went out of business and their firms destroyed.

While I could be describing current events, I am talking about twenty years ago. While consoles crashed, video-game centric computers filled the void. As they entered the 16-bit technology realm, it was clear that a victor (which was among young males) could create a 'top-box' computer nexus that would be standard. Investors couldn't wait, and analysts were excited about the upcoming 'battle' they could carefully forecast. When the NES, an 8-bit system, emerged it was laughed at from the 'hardcore' at the time who mocked the 'family friendly focus' of the system. The 'expanded market' for the NES, that was ignored by these home computers, were children as well as adults and females. Electronic Arts did their best to 'hold out' against the Nintendo effect for they thought the NES was a fad that was set to collapse. Every single year, analysts said that it was NES's last good year. The joystick, the standard iconic game controller, eventually became replaced by the NES pad (Author's Note: Malstrom was one of the hardcore who looked at the NES and said, "It will never catch on...")

History has been re-written in that consoles and personal computers are 'different markets'. This might be true for general computers but there was a time when computers sold primarily for gaming (under the commercial guise of 'helping your son learn programming'). Such home computers were blown out of the water by the NES. And, like today, this was perceived as impossible because the Commodore 64, just like the Playstation 2, was filled with a rich library of games. From the incumbent perspective, the fad simply had to end.

"Industry analysts predicted that each year was going to be Nintendo's last good year. 'Expect Atari all over again,' one said in 1989. 'This was their last year as a force,' another said in 1990. In 1991: 'A crash is imminent.' But each year NOA did better and made more money. If the rate of growth wasn't as high it had been, the slowdown was viewed as a disaster. But the fact was that in spite of a maturing industry, Nintendo raked in higher profits than most companies in any industry in any country."

-David Sheff, "Game Over" Page 401.

The forgotten gaming war in the 8-bit generation was probably forgotten because the competitors were gored by Nintendo's integrated hardware and software, its asymmetric sword.

"Nintendo had completely blindsided the American computer industry, too. The founders of the personal-computer revolution had predicted in the early eighties that computers would soon be commonplace in most homes, like toasters. Yet a decade after the personal computer was launched, only 24 million American homes had them- almost 10 million fewer than had Nintendo systems. Worldwide, there were about an equal number of Nintendo systems and PCs, some 50 to 60 million. As with VCRs, the PCs were manufactured by dozens of companies; less than 10 percent were made by the number-one PC company, IBM. With the exception of a growing number of illegal pirate versions coming out of Hong Kong and Taiwan, just one company manufactured and sold all the Nintendo systems. The huge Japanese computer company NEC and a video-arcade-game company, Sega, tried to compete with Nintendo, but in spite of investments in the hundreds of millions of dollars, they shared less than 10 to 15 percent of the market through 1991. Companies such as Apple and IBM looked over their shoulders and saw Nintendo on their heels. When Apple Computer president Michael Spindler was asked in March 1991 which computer company Apple feared most in the 1990s, he answered, 'Nintendo.'

"The computer industry understood why Nintendo had a jump on them: Nintendo had predicated its entire strategy on the control of both hardware and software."

-David Sheff, "Game Over", Page 6 (Emphasis is Sheff's)

The new values of the NES replaced those of the game-centric home computers. A paradigm shift was made.

The NES would have lasted for longer than it was had it not been for symmetric competition coming from Sega. This expansion of the market that the NES did is similar to what the Wii is doing now and is why we cannot place Wii in the same platform cycle as before:

"We doubt if the past platform cycle can be applied today and in the future as before.

"It is true that technology constantly makes advancements, so that one single hardware cannot enjoy an eternal life-span. However, only when we are dealing with the same fixed customers as before in the same market with few changes, can we base our prediction for the current platform's life-span upon past platform's histories of how and when they have expanded, shrunk and taken over by the next generation. The facts here are that, we are dealing with wider audiences, the market is further expanding, and our business environment has been rapidly evolving by the minute."

-Satoru Iwata, Investor Relations: Financial Results Briefing, April 25, 2008

During the briefing with investors, Iwata spoke of the paradigm shift. He showed these slides:


Nintendo is changing the rules for game consoles.

But can Nintendo goof this all up? Can they screw up their disruption? The beginning of decline for Nintendo can be traced back to this specific point:

"NOA had commissioned a study by Market Data Corporation, and its results sobered Arakawa and company. Top-level staffers met in the Zelda conference room, settling into cozy purple chairs around a massive table made up of smaller tables that had been pushed together. Representatives from Leo Burnett, the ad agency, and Nintendo's top brass, including Arakawa, Main, White, Shigeru Ota, and Gail Tilden, were all present. Explaining the results of study, the man who addressed the group uttered the words 'slow growth' and 'erosion' so many times that the mood turned dark. Nintendo had been used to meteoric growth and increasing excitement over its products. Now, the study said, many of its players were abandoning Nintendo for Sega, while others had lost their interest in video games altogether. The study of eight hundred people revealed some good news too. Of those families with systems in their homes, 90 per cent actually play them. Also, more girls between the ages of six and fourteen were becoming primary players, and their level of satisfaction was intensifying.

"But the fact was that the primary players Nintendo had counted on were beginning to age, and their satisfaction with the product was lessening. Kids still played a lot- in the sample, they spent an average of 2.3 hours a day playing Nintendo five days a week- but they were 'more apathetic, less involved' with it. The worst news was that 'it isn't as cool, not as much the thing to do'.

"The survey was by no means conclusive, but it did indicate that Nintendo needed new strategies in order to retain its dominant position. Segmentation was a key- the company would have to market specific products to specific groups. One group that would remain a relatively easy sell was younger kids, for whom Nintendo was still the coolest."

-David Sheff, "Game Over" Page 399.

As Nintendo would define 'Wii' to mean 'everyone', segmentation would be the opposite of that. After this study, Nintendo segmented its audience and chopped up its market to specific groups. Whereas a Nintendo NES game would be considered for everyone, from kids to adults, such as Adventures of Lolo, since the SNES Nintendo games began to be aimed at specific audiences. Consider a game such as Yoshi's Story which is aimed at children. The great NES audience began to fracture.

The legacy of segmentation has permeated throughout the Industry and is still seen as 'The Way'. When observing the Wii audience, instead of seeing Nintendo making games for everyone, the Industry thinks Nintendo stepped into a new huge segment, which is never addressed specifically but given a general name, of that they call casual games.

 

Birdmen Lay an Egg

Dr. Christensen remarked that disruption is misinterpreted in such a way that when trying to match soaring birds, people attempted to fly by flapping their arms instead of learning the logistics of lift. Companies, who attempt to follow in a disruptor’s wake by mimicking certain outside elements, and making no effort to understand the business ‘lift’ behind it, are what I call ‘birdmen’.


Behold the Birdmen!

When looking at the success of the Wii, they do zero research on Nintendo, disregard every previous Nintendo quote and speech, to shut off their brain by creating ‘catch-all’ categories such as labeling new Wii gamers as ‘casual gamers’. Has Nintendo ever used the phrase ‘casual gamers’ as a certain press does today? Nintendo has always said they were attempting to attract former gamers and people who have never played games before. Even today, Miyamoto and Iwata refuse the casual gaming label.

”But having said that, we don't develop games with two categories in our mind: "This one's just for people who don't play games..." or "This one's just for gamers..."

-Satoru Iwata, Iwata Asks: “Turning the Tables”

Q: Do you have a strategy to target particular part of the market, like people over 50, with particular kinds of games?

A: I don’t think Nintendo really thinks in terms of specific targets or markets. When we create a game, we try to create entertainment that is appealing to everybody. Here there is a lot of talk about the casual and the hardcore market. We don’t look at casual versus the hardcore. There are a lot of hardcore gamers who play a lot of casual games. And within the casual games, we can win some of them over and get them to play the games that are more hardcore. We are trying to break down the psychological barriers even between those two groups.

-Shigeru Miyamoto. Mercury News Dean Takashima: "An Interview with Shigeru Miyamoto"

"I don’t like the word casual. There’s a lot of meaning and interpretation of the word. For me you’re either a gamer or a non-gamer. You can spend time playing ten or twenty hours playing a Wii game or Flash game on the ‘net. The people who play all these games are core gamers. A 50 year-old woman who only plays Brain Training? She’s still a gamer – because she’s playing like a core gamer.

"Really, you get different kinds of gamer. The casual word I don’t like so much because people tend to consider that something which is casual needs to be easy. If you’re good at any game you can play it on a high difficulty level.”

-Laurent Fischer, Nintendo Managing Director of Marketing in Europe. Casual Gaming Biz: "Nintendo says there is no casual gaming"

The Birdmen are attempting to re-write history as well. ‘Pong’ and ‘Space Invaders’ might have been ‘casual’, but the common belief is that the hardcore pioneered gaming and that gaming ‘trickled down’ to the mass casuals.

When MTV interviewed Bushnell, Klepek said so himself. Bushnell told him how history really was.

“The way that games started, they were virtually all casual. If you really think about ‘Breakout,’ ‘Tank‘ and some of those things, games were very, very simple.”

“I like to talk about [how] 1983 was sort of the break point where games went from casual to hardcore. They got violent. They went long form. The violence lost the women and the long form lost the casual gamer. I actually sort of stuck to my roots, and the console game market moved away.”

-Nolan Bushnell, MTV Multiplayer Interviews Atari Founder

Now listen to Bushnell reject the label of ‘casual games’:

“I actually think the future of gaming is going to be much more emphasis on games that are casual. The Wii was as much about a return to fun games — what I call universally accessible games — as much as it was about the controller. There’s clearly been a demand for games for everybody else, and that’s why I think this is getting so much attention.”

-Nolan Bushnell, MTV Multiplayer Interviews Atari Founder

It is informative that Klepek, who himself is a hardcore gamer, refers to those Atari era games as ‘hardcore’ with Bushnell correcting him. Hardcore believe they are the fountain of all gaming with casual gaming as the edge and the hardcore is at the center, naturally, where everything gaming revolves around. While those who chatter about ‘casual games’ would not call a game like ‘Tank’ to be a ‘casual game’ in the same way they do not call Super Mario Brothers or Gradius ‘casual games’, yet they all were very accessible. They had to be; they were in the arcades after all!


Birdmen have attempted to describe games such as this as ‘hardcore’. Just because it has tanks and multiple sticks doesn’t disqualify it from being an ‘accessible’ game, according to Bushnell.

Nintendo developers also aim to have the software become ‘accessible’:

”Well, this is going back a bit, but when I first entered the company I often said that I wanted to make the sort of games you could play with your grandmother. I had an image of games not feeling out of place in the living room. Of course, this could have been around the fireplace, at the dining table, the coffee table, or anywhere. I just wanted to make a game that would be fun for the entire family. Recently, I've found myself sitting all alone, starting up a game and feeling a bit cut off from the world. I wanted to change this. That is, I wanted to make gaming a little less lonely. In my mind, the Wii Remote belongs on the coffee table. I spent a long time discussing with a whole range of people about what we could do to achieve this. For the system function project, we were discussing a similar vision.”

-Tamaki, “Iwata Asks, ‘What is Wii”

”As we talked, the concept of "fun for the entire family" gradually took form in our minds. We didn't want any member of the family to feel left out, either through not understanding the Wii or feeling it had nothing to do with them. An all-too-common trend in gaming is for the user to play a game they like for hours and hours until they complete it, and then never touch it again. This was something we wanted to avoid.”

-Aoyuma, Integrated Research and Development Division, Product Development Department Development Group No. 4 “Iwata Asks, ‘What is Wii”

Peter Moore hates the label ‘casual games’ too:
 

President of EA Sports Peter Moore has called into question the longevity of the term ‘casual games’ – despite Electronic Arts owning its very own Casual division.

Moore, who previously headed up Xbox 360’s marketing at Microsoft, called the term “a hodgepodge” and said that as the busness starts to grow… [that] will be the right descriptor”.

Moore told GameDaily: “You know, within casual is such a hodgepodge that's still coming together with mobile, and Pogo, and 'What is casual?' And I'm not even sure we like the word casual. I don't think [Kathy Vrabeck] does either.

 “'Okay, we couldn't call it anything else, so we'll call it casual.' But I don't think, as that business starts to grow for us, it's the right descriptor.”

-Tim Ingham, Casualgaming.biz: "Peter Moore: Casual is wrong term for these games"

No, I did not mistype that. It really is written as ‘busness’ in the story. Either Peter Moore suddenly equates casual gaming to buses, or casualgaming.biz believes in casual spelling. Nevertheless, the point is that Moore rejects the casual gaming label. I find it fascinating that those who have been in the gaming business since the earlier days openly reject the casual games mantra. They know a birdman when they see one.

But Peter Moore then turns around and says ‘casual games’ are like a shallow swimming pool.

”We used the analogy of a swimming pool, which people have mocked us for. But it's a good analogy. EA Sports was the deep end, right? You either jumped in, you sank or you swam, or you were intimidated and didn't go near the water. We needed to provide a shallow end. So things like All Play for the Wii, the Freestyle brand, provide that shallow end that you can get in and hopefully move down the pool, which we want you to do.”

-Peter Moore, Eurogamer Interview

What Peter Moore is talking about is a purpose brand. In a situation that EA Sports is in, where their money is coming from sophisticated users, creating a special purpose brand will allow EA Sports to serve the jobs these new Wii users want without harming the EA Sports brand.

We have written elsewhere about how to harness the potential of disruptive innovations to create growth. Because disruptive innovations are products or services whose performance is not as good as mainstream products, executives of leading companies often hesitate to introduce them for fear of destroying the value of their brands. This fear is generally unfounded, provided that companies attach a unique purpose brand to their disruptive innovations.

-Clayton Christensen, “What Customers Want From Your Products”

Christensen goes on to describe examples of purpose branding in regards to Kodak. One of these examples was the single-use camera. Since it used cheap plastic lenses, it couldn’t match the quality of a regular camera. Since it didn’t use film, it received opposition within Kodak’s film division. By creating a purpose brand, the Kodak FunSaver, it allowed customers to do the job they wanted without risking harm to Kodak’s brand. EA Sport’s ‘Freestyle’ brand aptly describes the motion controls and basically shows what type of product it will be (sports games that use ‘freestyle’ motion controls). Nintendo used a similar purpose brand with the DS called ‘Touch Generations’ which channeled the new Brain Age and Nintendogs users to software that could be played by directly touching the screen. ‘Touch Generations’ was so successful that Nintendo is continuing it on the Wii.

Moore’s ‘shallow end of pool’ analogy is poor only so much that using the word ‘shallow’ people will automatically think the game is ‘shallow’. Peter’s shallow end of pool is identical to Iwata’s bridge: both are to send new market users upstream and to invite upmarket users to join the downmarket with these new type of games. Peter Moore even has a portrait of Iwata hanging in the offices of EA Sports to remind everyone the direction to go.


Not a Birdman. Peter Moore gets it.

Is ‘Casual Gaming’ a purpose brand? No, just as ‘Hardcore Gaming’ could not be a purpose brand. Marketers are thinking ‘Casual Gaming’ as a demographic specific brand instead of a job specific brand. But it’s worse than that…

’Casual Gaming’ was heralded as a ‘new form of gaming’, as a savior for easy money, and many pundits applauded excitedly over the ‘casual gaming’ ‘wave’ as they equated the popularity of Wii and DS to the popularity of ‘casual gaming’. In “Birdman, A Casual Fallacy,” there are quotes of the same ‘heralding’ and ‘excitement’ of ‘casual games’ years before the Wii and DS even came out. Since the story of ‘casual gaming’ being new, being fresh, never-before-seen, has fallen apart, now the birdmen have swung the other direction: by saying ‘casual gaming’, as opposed to being new, is actually ancient and talks how Emperor Chinese Yao and Captain Cook invented ‘casual games’ (not a joke, see for yourself).

The absurdity continues. Finally, we are given a definition to casual gaming:

”Hotly contested, but generally indicates a game with some or all of: quick to start playing, simple gameplay mechanics, mass-market theme/setting, relatively cheap development costs. Usually digitally distributed.”

-Casualgaming.biz glossary

Here is their definition of ‘hardcore gamer’:

”An avid consumer of full-priced boxed games, who responds positively to difficult and lengthy games that have a focus on skill-based gameplay, and who identifies himself through his consumption of specialist websites, forums and games magazines.”

-Casualgaming.biz glossary

Well, that certainly didn’t answer the mythical questions of ‘what is casual gamer’ and ‘what is hardcore gamer’. We are left with more questions than answers.
 
Due to the nature that handheld consoles are used in spurts of time in various environments and might be interrupted at anytime, are all handheld games ‘casual games’? Do the NES games, who use only two buttons and a D-pad including a ‘start’ button to pause the game at any time (quite an innovation at the time), qualify as ‘casual games’? Many NES games are much harder than today’s modern games! Do modern games, who use more buttons but elaborate 3d environments, qualify as ‘hardcore games’? Many of those games are easier than the old school games since they rely more on time invested instead of skills needed.

Are Mario Kart DS and New Super Mario Brothers ‘casual games’? They sold to the same people who bought Brain Age and Nintendogs. Some might say Final Fantasy III is a ‘hardcore game’, yet it sold much to that same audience (in Japan) as well. Does any of this ‘hardcore’ and ‘casual’ labeling make any sense?

No! It does not make sense. There is no Mason-Dixon line in the market where on one side is proclaimed ‘Hardcore Land’ while the other side says ‘Casual Land’. In terms of sophistication, there is certainly a downmarket and upmarket, and definitely a difference of New Generation values and Next Generation values, but this is the closest one can get to ‘casual’ and ‘hardcore’ gaming labels. Yet, the Industry rejects even universal ‘upmarket’ and ‘downmarket’ labels and keeps insisting on ‘casual’ and ‘hardcore’ labels.

Psst…the reason why is because they are intent on building up ‘brands’, not ‘games’. Casual Games brands are all the rage from the Birdmen. If one rejects the label of ‘casual games’, one will be perceived as attacking their new brands.

The only conclusion left is that the basis of ‘casual gaming’ and ‘hardcore gaming’ is based on stereotypes. Would you found a business model based on stereotypes?

Apparently, EA did.

EA's new focus on casual games began in April 2007 when returning CEO John Riccitiello told fellow execs that they needed to do more in the casual space. Of course, with its long history running the Harry Potter game franchise and having ownership of Pogo.com since 2001, EA was already in the casual games business.

-Michael French, casualgaming.biz  “EA’s Russel Arons on the Casual Entertainment revolution”

Apparently, EA already selling games to the downmarket was not enough for Riccitiello even with the massive success of The Sims. But was ‘Casual Games Division’ necessary? It sounds as ridiculous as a ‘Hardcore Games Division’.

”So a number of EA Casual Entertainment's key execs and producers come from toy industry giants like Hasbro to inform its new strategy towards. Arons herself previously worked for Mattel and ran the Barbie brand.

"It's not just a toy - it's more complex than that," she says [referring to titles like Boom Blox], and then - unknowingly paving the foundation for a new entry in our Casual Games Glossary - says: "It's what I call 'toyetic'."

-Michael French, casualgaming.biz “EA’s Russel Arons on the Casual Entertainment revolution”

Not another stupid non-definable label. Toyetic!?

”In building new games for the EA Casual Entertainment label, Aarons adds, the priority is to focus on making sure the appeal is there amongst specific audiences - a stark difference from the broader marketing campaigns you might find implemented by the likes of sister label EA Games when it comes to the likes of FIFA or Need For Speed.

"Previously when EA has done early launches into casual games we've said 'oh, these games are for everyone'," she says. "But for something like Boom Blox we're clear that the primary target market is eight to 12 years old, and we're not even really approaching the gamer press.”

-Michael French, casualgaming.biz “EA’s Russel Arons on the Casual Entertainment revolution”

Well, marketing to twelve year olds explains ‘Boom Blox’ sales. The Nintendo approach is to say the games are ‘for everyone’ and do their best not to appeal to a specific audience. EA Casual Games is going the opposite way.

You might ask, “Malstrom, why is aiming at a specific demographic, or rather, stereotype, a wrong thing? Is it not good? Should not software be aimed at these people?”

I’ll tell you why it won’t work, and why ‘casual games’, which is just another excuse for dumb marketers to pander to specific demographics, is a house of cards ready to fall down.


Parable of the Milkshakes

”People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"

-Theodore Levitt, Economist Legend of the Harvard Business School, coined the Term 'Globalization'

People do not buy products; rather, they hire them to perform a job in a functional, social or emotional dimension. Our lives face obstacles in and of themselves so by spending our hard won money we ‘hire’ these products to perform these jobs for us and make our lives more enjoyable.

”In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy.”

-Clayton Christensen, “What Customers Want From Your Products”

The key to market analysis is to study the consumers’ behavior, not the consumers themselves. The source (or should I call it hellacious pit?) that generates these birdmen, cocky with the belief that the wind is at their backs, is the context that customers and not the new jobs are what consists of the ‘New’ Market. With the current video game disruptions (first is from online flash gaming and the second is from Nintendo) creating new gamers, the old industry stares at the New Market and literally sees the literal. “Oh, Grandmas.” “Oh, housewives.” “Oh, busy people,” which they sum up as “I get it! Casual gamers!” The ‘casual games’ mantra is generated solely from marketers’ studying the consumers and noting they are ‘casual’; the tail is waging the dog.


Studying customers and not the job is why companies make the plastic dog.

Nothing illustrates that solution-orientated analysis should be based on jobs the customers want instead of the customers themselves than the Parable of the Milkshakes. It began with one fast-food restaurant’s efforts to improve sales of its milkshakes. The marketers, as is their tradition, first defined the market segment by product (milkshakes) and then segmented it further by profiling the demographic and personality characteristics of those customers who frequently bought milkshakes. The marketers then invited people who fit that profile to evaluate what type of improvements should be done to the milkshakes of them being thicker, more chocolaty, cheaper, or chunkier. “What would satisfy you better?” was the question they asked to them. The panelists gave clear feedback, and the improvements were put into the milkshakes.

But the milkshakes’ improvements had no impact on sales.

A new researcher was brought in to discover why the milkshakes were not selling. He spent a long day in the restaurant attempting to understand the jobs that customers were trying to get done when they hired a milkshake. Dutifully, he jotted down when each milkshake was bought as well as other products the customers purchased, whether the customers were alone or in a group, and whether they consumed the milkshake on the premises or drove off with it. At the end of the day, he was surprised that 40 percent of all milkshakes were purchased in the early morning. Most of the time, these early-morning customers were alone, did not buy anything else, and they consumed their milkshakes in their cars.

The next day, the researcher returned to interview these morning customers before they left the restaurant with their milkshake in order to understand what caused them to hire the milkshake in the first place.

”Most bought the milkshake to perform a similar job: they faced a long, boring commute and needed something to make the drive more interesting. They weren’t yet hungry but knew they would be by 10 a.m.; they wanted to consumer something now that would stave off hunger until noon. And they faced constraints: They were in a hurry, they were wearing work clothes, and they had (at most) one free hand.

”The researcher inquired further: “Tell me about a time when you were in the same situation but didn’t buy a milk shake. What did you buy instead?" Sometimes, he learned, they bought a bagel. But bagels were too dry. Bagels with cream cheese or jam resulted in sticky fingers and gooey steering wheels. Sometimes these commuters bought a banana, but it didn't last long enough to solve the boring-commute problem. Doughnuts didn't carry people past the 10 a.m. hunger attack. The milk shake, it turned out, did the job better than any of these competitors. It took people twenty minutes to suck the viscous milk shake through the thin straw, addressing the boring-commute problem. They could consume it cleanly with one hand. By 10:00, they felt less hungry than when they tried the alternatives. It didn't matter much that it wasn't a healthy food, because becoming healthy wasn't essential to the job they were hiring the milk shake to do.

”The researcher observed that at other times of the day parents often bought milk shakes, in addition to complete meals, for their children. What job were the parents trying to do? They were exhausted from repeatedly having to say "no" to their kids. They hired milk shakes as an innocuous way to placate their children and feel like loving parents. The researcher observed that the milk shakes didn't do this job very well, though. He saw parents waiting impatiently after they had finished their own meals while their children struggled to suck the thick shakes up through the thin straws.

”Customers were hiring milk shakes for two very different jobs. But when marketers had originally asked individual customers who hired a milk shake for either or both jobs which of its attributes they should improve—and when these responses were averaged with those of other customers in the targeted demographic segment—it led to a one-size-fits-none product.”

-Clayton Christensen, “What Customers Want From Your Products”

When researchers realized what jobs the customers were trying to do with their milkshakes, they also realized their old ideas for improvements to the milkshake would be irrelevant unless they specified the improvements for that particular job. In order to make the milkshake work better during the boring long commute, they made the milkshake thicker so it would last longer and whirl in tiny chunks of fruit to add a dimension of surprise and anticipation to the boring morning routine. The restaurant chain also began delivering the product more effectively by moving the dispensing machine in front of the counter and selling customers a prepaid swipe card so they could come in and go out without getting stuck in the drive-through lane. The changes to the milkshakes for the noon and evening jobs would call for a very different product from the early morning milkshakes, naturally.

Knowing the jobs the customer wants and improving the product’s social, functional, and emotional dimensions so the job is done better allowed the company’s milkshakes to gain market share against the real competition- not competing chains’ milkshakes but bananas, bagels, and boredom. The new milkshakes would grow the market.

Should the current Industry’s marketers still be scratching their heads at this point, let me explain: job-defined markets are generally much larger than product category-defined markets. This is why our ‘casual games’ will not work. You are stuck in the context that equates market size with product categories, and you don’t understand with what you are competing against from a customer’s point of view. The success of the milkshakes growing the market did not come from selling to ‘new people’ as if understanding untraditional milkshake consumers. It came from understanding the job.


Why are the Four Horsemen of the Apocalypse so happy in that jeep? They are holding milkshakes.

There are too many examples of products growing the market as they improve the social, emotion, and utility dimensions of the job. Google was tailor made for the job for finding information, not for a ‘search demographic’. The success of Roomba, the vacuuming robot, was to perform the job of cleaning, not a demographic of robot fetishists. The creation of “Napster” and music trading came from a college student improving on the job of finding and trading music, it was not made for a ‘music listening demographic’. Napster’s success, as well as many other various music trading programs including music stores such as i-Tunes grew the market for the job of obtaining and listening to music was much easier.

”Why do so many marketers try to understand the consumer rather than the job? One reason may be purely historical: In some of the markets in which the tools of modern market research were formulated and tested, such as feminine hygiene or baby care, the job was so closely aligned with the customer demographic that if you understood the customer, you would also understand the job. This coincidence is rare, however. All too frequently, marketers' focus on the customer causes them to target phantom needs.”

-Clayton Christensen, “What Customers Want From Your Products”

Since video games have traditionally been closely aligned with the young males demographic, not only do marketers think ‘new market’ means specific demographics that are not young males, they even pander with the traditional ‘hardcore games’. Nubile scantily clad females wielding weapons bigger than they are, bald space marines, violence for the sake of violence, and profanity have become staples in which marketers mistakenly believe will create ‘sure fire’ hits with this so-called traditional young male audience. But gamers are savvy, and they despise nothing more than this pandering to a specific demographic. When their attempts fail, a new blockbuster game emerges from left field (which was built by passion, not chasing any demographic), and all the marketers say, “Aha! That is it!” and begin copying the game in mass. This is t