”
Values.
What is The Blue Ocean about? What is disruption about? Both are about
choosing different values than the competitors. In both The Blue Ocean
book and in disruption, these new values create a new market. As this new market
grows and grows, as some consumers in the old market switch over to the new
values, the new values become dominant. The Industry becomes changed.
For twenty years, consoles have been competing over the same values
(graphics, horsepower, greater sophistication in software). Even now, it should
be clear that Xbox 360 and Play Station 3 compete over the same values. The Wii,
however, has adopted different values (interface, pick-up-and-play, 5-95 age
group for games).
Blue Ocean Strategy is not about making new markets. It is about adopting new
values which opens up not just new markets but also makes your
competitors irrelevant (since they have different values). This is why Blue
Ocean Strategy matches disruption very closely.
’Competition’ means fighting over the same values. ‘Disruption’ means fighting
over different values. When a console outsells another based on same values, it
is called ‘CONSOLE WAR’ (or ‘symmetric battles’). When a console outsells
another based on different values, it is called ‘disrupting the Industry’
(or ‘asymmetric battles’).
When people turn the marketplace into a Casual Vs. Hardcore, they are
really saying Value A Vs. Value B. The words ‘casual’ and ‘hardcore’ have
been defined by the hardcore. So the word ‘hardcore’ is viewed as some Olympic
skilled video-gamer while ‘casual’ is viewed as a special Olympic, dumb down,
‘everyone-can-win’ retard gamer. (The ‘casual’ side tends to view themselves as
‘normal’ and view the ‘hardcore’ as ‘freaks’).
In “Birdman and the Casual Fallacy”, it pointed out the difference between
downmarket and the upmarket with a number of tiers. Many have mistaken that to
mean upmarket means ‘hardcore’ while downmarket means ‘casual’. The difference
between downmarket and upmarket is the demand of the user. The difference
between the so-called ‘hardcore’ and the ‘casual’ is a set of values.
DOWNMARKET- The user does not demand much for this product. These users
tend to be newer users. Almost all new users begin in the ‘downmarket’ and,
should they keep playing, their demands increase so they travel upstream to the
upmarket.
UPMARKET- The user demands much for this product. These users tend to be
experienced users and/or grew up with the product.
NEXT GENERATION- This is a sustaining upgrade of the Old Values. These
Old Values are graphics, horsepower, and greater sophistication in games. By
sophistication, ‘next gen’ means for a more immersive, more epic experience.
Sophistication is measured in length of playtime.
NEW GENERATION- This is a disruptive upgrade from the Old Values. The New
Values are interface, pick-up-and-play, and greater streamline in games. By
streamlined, ‘new gen’ means for a more utilitarian, more ‘real world’ type
experience (the interface brings the game more to the real world).
UPSTREAM- The user demands more from the product. So the user ‘upgrades’
to higher tiers, to more demanding games. This upgrade is still on the same
value line.
DISRUPTION- The user, either completely new, a former user, or overshot,
changes values by what they define as quality. Disruption is not about
MORE of a quality but CHANGING the definition of quality. As values change, so
does what is defined as ‘quality’.
Since there has been much confusion of this subject lately, let us go through a
test. The six bolded words above are your choice of answers.
Highlight to
discover the answer. Let us begin:
QUESTION
ONE:
This is an example of a user going ________.
Donkey Kong -> Mario Bros. -> Super Mario Brothers -> Super Mario Brothers 3
Answer:
Upstream
Why:
The values are the same for all the games. The only difference is the
demand the user has for use of the product. If you said ‘upmarket’, you are
incorrect. ‘Upmarket’ is a part of the market, not the process of upgrading as
the pictures clearly show. All these games are on the NES and users did
‘upstream’ toward Super Mario Brothers 3. If ‘Super Mario Brothers’ was not
included with the NES, it is doubtful as many would have been able to get into
Super Mario Brothers 3’s complexity.
QUESTION
TWO:
This is an example of a ______ game.
Pac-Man
Answer:
Downmarket
Why:
Pac-Man is basically on
the lowest tier of a video-game one can find. This ‘maze’ game is very simple
and its sequels are more complex. If you said ‘New Generation’, it would be
incorrect since there were a number of other hit games prior to ‘Pac-Man’.
Pac-Man carries a different weight than Pong.
QUESTION
THREE:
The arrows represent generational changes. The first arrow represents
________ and the second arrow represents _________.
Super Mario Kart -> Mario Kart 64
Mario Kart: Double Dash -> Mario Kart Wii
Answer:
Next Generation, New Generation
Why:
The major clue that the answers could only be ‘next generation’ or ‘new
generation’ is clearly obvious by the question asking for generational
changes (which upstreaming would not apply). The change of SMK to MK64 is a
sustaining upgrade. It still uses the SNES values such as better graphics, more
sophistication. (Change to 3d is a sustaining upgrade.) The change of MK:DD to
MK:Wii is about a change in values making it ‘new generation’. MK:Wii is not
interested in upgrading the graphics or adding sophistication to the game as it
is in altering the interface (as the included wheel should represent).
QUESTION FOUR:
What is this game?
Fire Emblem
Answer:
Upmarket
Why:
It is a far more demanding game than other games on the system. Upmarket is
defined by how much software demands of its users. F-Zero would be upmarket from
Mario Kart for example..
QUESTION FIVE:
These three games are the flagship titles for their consoles. One represents
____, another represents ______, and the third represents _____.
Wii Sports, Halo 3,
Metal Gear Solid 4
Answer:
New Generation, Next Generation, Next Generation.
Why:
Wii Sports is the flagship game for showcasing Wii’s values such as the
change in interface. Halo 3 is a flagship game showcasing Xbox 360’s values for
greater sophistication and graphics. Metal Gear Solid 4 also shows values for
greater sophistication and graphics. If you said ‘downmarket’, ‘upmarket’ and ‘upmarket’,
you would be incorrect as ‘flagship titles for a console’ is representative of
values, not the demand on the user.
QUESTION SIX:
See, with each new entry in the series, Nintendo has added
elements to encourage more precise, practiced play. Super Mario Kart had coins,
feathers and shortcuts; MK64 replaced them with power-sliding; Double Dash!!
added a cooperative element and fine-tuning though mixing-and-matching karts and
characters. Mario Kart DS didn't add much new (besides online), but it refined
all those elements to near-perfection. MK Wii tosses everything out and
simplifies racing, because some kids discovered "snaking," an unintentional
exploit that gave determined racers a sure way to win. It sucked, sure, but it
was painful to do. At least you could take pleasure in knowing that the dude who
just left you in the dust had strips of thumb-beef dangling from a bloody stump
on his hand. But Nintendo wanted to quash cheating, so they've dumbed down MK
Wii to the point where everyone has to race like an amateur. As a conceit,
though, they've incorporated "tricks" whereby you shake the Wiimote like an
idiot at key moments and get a little boost for your trouble. I guess the idea
is that ludicrous physical flailing is fun -- just look at those Wii
commercials! -- so that's their answer. Sure, we've gimped the game, but look
how fun it is now!”
-Jeremy Parish, (blog post)
”Mario
Kart Ennui... er, On Wii”
This person sounds uphappy. Whether he knows it or not, what he is REALLY complaining about is ____.
Answer: Disruption
Why: If you said ‘New Generation’ or ‘Downmarket’, you would be incorrect. Parish admits he has no problem with ‘expanding’ gaming (selling to non-customers). Parish, like many other people, has misunderstood Blue Ocean Strategy to simply mean ‘expansion of market’. The book is really about new values. Many hardcore gamers, such as Parish, have no problem with ‘new values’ type games so long as they kept themselves separate. However, the ‘bridge’ games are to upstream new gamers as well as convert old value gamers to the new values. Parish was not converted. The change of values is ‘disruption’, and it is this change of values that Parish is directly arguing about. Many unhappy hardcore are angry at Nintendo because the values of gaming are changing, i.e. disruption.
QUESTION SEVEN:
We think Nintendo's success, to be honest, is great for us. They're doing great things to help broaden the audience in the industry. We're playing a role as well. And Xbox is a great complement to that experience. It's interesting, because we're not really targeting the same consumer with the same kind of experience, but in many ways we're finding that as we grow and broaden...a lot of that audience is going to be graduating up from the Wii experience. We think we're a great complement to that. What Nintendo's doing is great for the industry, but it's great for us as well.””
- Aaron Greenberg, Xbox 360 Product Manager. Interview with Next-Gen: “Microsoft’s Console War”
What mistake is Greenberg making? He is mistaking ________ for ________.
Answer: Disruption, upstreaming.
Why: If you said ‘upstreaming’ and ‘disruption’ in the opposite order, slap yourself. Microsoft doesn’t want disruption. But the ‘graduating up’ is confined only to a similar plane of values. People who like the values of Wii Sports will not ‘graduate’ to Xbox 360 that shares completely different values. People who want to graduate from the Wii have nowhere to turn as the Wii is the only system holding those values. This is why most were non-gamers or former gamers before the Wii came out.
QUESTION EIGHT:
To many players’ surprise, Nintendo keeps focusing on the wheel with Mario Kart: Wii from giving it a special icon in multiplayer to making tournaments that only use the wheel. This is an example of how Nintendo is pushing ________ values.
Answer: Disruption (or New Generation)
Why: Values can only be three type of answers: New Generation, Next Generation, or Disruption. Since motion steering is not a Next Generation value, it has to be the other two.
QUESTION NINE:
After E3 2006, Sony unveiled its motion controlling ‘Six-Axis’ controller. When interviewed, Iwata said this:
Q:Sony showed its own motion-sensing controller this week. What do you think?
A: A motion-sensing controller that you hold with both hands
is completely different from one that you can use with either your right or left
hand. Worldwide, bloggers have been writing that they copied us, but I don't
really think we've been copied.
I don't think at all that we've lost Wii's advantage.
We've come out with a unique, new innovation. I think the fact that a company would do something similar is an admission from the outside that it has value. So instead of getting angry, we should celebrate.
-Interview with Iwata and Todd Bishop, SeattlePI (“Q & A: Wii controller could swing interest its way”)Iwata wants to celebrate because the motion controllers represent a new type of value. By generations, with _________ attempting to co-opt ___________ with __________ values will only speed up the __________ and implode the ____________.
Answers:
Next Generation, New Generation, Disruption (or New Generation), Disruption (or New Generation), Next Generation
Why:
The ‘by generations’ words points that Next Generation and New Generation would be the answers instead of upmarket and downmarket. For ‘values’, either ‘disruption’ or ‘new generation’ will work since disruption and new generation are all about the new values. Injecting technology used for the new generation (such as the accelerometers) creates a ‘me too’ effect that implodes next generation values. It would be stupid as if Nintendo crammed ‘HD graphics’ into a Wii 2 released in 2008.
QUESTION TEN:
Match the letters to their correct labels:
Answer:
A Upmarket
B Disruption
C Next Generation
D Down Market
E Upstream
F New Generation
Why:
A is upmarket because the circle indicates a specific point on the arrow. This specific point is at the top of both main arrows can only be upmarket.
B is disruption because the circle represents the right arrow (new generation) eventually crossing over the left arrow (next generation). It is through disruption how New Generation values become dominant over Next Generation.
C is Next Generation because it is one of the two arrows and overshoots far before the other arrow does.
D are circles indicating specific points at the bottom of the arrows. Downmarket is at the bottom of the value lines for Next Generation and New Generation.
E is Upstream because they are two tiny arrows (which, to my fault, looks like sperm). The tiny arrows indicate movement upward on the two main arrows which can only be upstream.
F is New Generation because it is one of the two arrows that is below the other and eventually will cross it to, hence, becoming the new mainstream values.
SCORE:
10: Whoa! Yamauchi reads this website!?
9: How would you like to become a Nintendo President?
8: Future Nintendo investor here.
7: Try becoming a Nintendo Vice President.
6: I see, so you ARE an entrepreneur?
5: Peter Moore, is that you?
4: Gamestop Employee of the Month
3: I foresee you becoming a video-game analyst.
2: Apply to game journalism.
1: It could be worse. Look into becoming Product Manager for Xbox 360.
0: You too can become President of Epic!
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