Wii: A New Value Curve For Nintendo
Published November 13th, 2006 in Customer Experience, Gaming, Exceptional Experience, Innovation, BrandI’m not finished with the Wii just yet. After I posted a link to Laura Ries’ great analysis of the marketing warfare that Nintendo is currently engaging Sony and Microsoft in I got to thinking about how Nintendo is in the midst of trying to create a blue ocean for themselves. I’m not the first person to recognize this; after doing some digging I discovered that Nintendo refers to the blue ocean strategic approach themselves as the basis for their innovative Wii.
Blue ocean strategy is a strategic approach for continuously identifying uncontested market space and capturing it. The idea is that you move from the “bloody” red ocean of competition to a blue ocean where the competition is irrelevant. Blue Ocean Strategy
Some examples of companies that have created blue oceans for themselves include Cirque du Soleil, Starbucks, Southwest Airlines and Curves. Each of these companies are profiled in Blue Ocean Strategy
Part of blue ocean strategy involves creating a strategy canvas that depicts the current market space and relative offering level for major attributes that companies compete on. It helps visualize which offerings cost more to compete on. It also helps companies identify which values to eliminate, reduce and/or raise. And finally, it helps identify new values that aren’t currently competed on.
Here’s a strategy canvas for the new Nintedo Wii when compared to Microsoft’s Xbox 360 and Sony’s PlayStation 3. Nintendo’s value curve is in blue:
The bottom of the graph lists the primary points of competition:
- Price
- CPU power
- GPU power
- Hi-def video
- Storage
- Games
- Product ecosystem
- Unique gameplay
My approach to this was hardly scientific (references are linked to below); but the gist of it comes across. Nintendo is attempting to create a blue ocean by creating a unique gaming experience with easy access to a back-catalog of games, while at the same time creating a product ecosystem (e.g., virtual console and shopping channels) and keeping the cost of it’s system lower than Sony’s and Microsoft’s.
I understand that PS3 and Xbox are backwards compatible and that Sony has a minor product ecosystem going on with it’s PSP integration; but Nintendo is making accessibility and ease of integration even higher priorities.
If Nintendo’s Wii bet pays off, there’s a good chance that they will find themselves in a new market space uncontested by the current heavies, Sony and Microsoft.
What do you think Nintendo’s chances of creating a blue ocean are?
References:
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Hi,
I don’t understand the chart, does this mean that Xbox 360 has the best price?
Shouldn’t Sony have the (supposedly) better cpu/gpu rating?
Can you give me a hint?
Thx, gg.
Hi gg,
The X axis is meant to show low to high. So, from low to high, here’s how the three systems rank in terms of price:
1) Wii (lowest price)
2) PS3
3) 360 (highest price)
As for cpu/gpu rating; the info I referenced pegged the 360 better slightly higher.
Let me know if you have more recent or detailed specs for systems. I’m collecting feedback from commenters like yourself on other forums and will update the graph in a couple of days.
Sound good?
Scott
lets get things in oprder less hype more fact
wii in terms of gameplay interaction imursion shall leave ps3 with its out dated sness pad ripp off and dead anologs for dead same applys 360 gameplay wise interaction wise wii is king
cpu right what most are forgetting is wii cpu is a true cpu a desk top cpu with gaming upgrades
both sony and microsoft have big number crunching inline processors the stipped down and over clocked to do more work but wirth weak cores in terms of programming depth
out of line true cpus breat inline number crunchers clock for clock so clock for clock wii cpu is by far the best allso remember broadway conbines copper tech and silicon on insulator tech for turbo boosted performance if i can use such a laymens termanoligie
wii cpu =gaming cpu work////no hd coding no surround sound engines as wii has a dedicated sound processor
ps3/360 cpu do all cpu plus background op system plus hd coding plus surround sound engines before they start doing the fancy stuff
doesnt look such a gap now does it cpu in wii =cpu work load
cpu in 360/ps3= cpu work sound work hd work etc and remember these cpus in design and hardware pale against true out of line processors hmmmmmmmmmm powewr wasted mii thinks
wii uses nec edram mim2 ram process this =big bandwitdths and low latency
wii uses the worlds best ram give or take 1tsram-r very fast very stabile and high bandwidth
better than pc ram in 360
im not saying wii is more powewrfull im saying its much better design with less bottlenecks easy to programme and avouding hd coding and sound coding on the cpu it allows wiis tiny cpu to do what it should cpu work secondery gpu work
combine that witrh very very very fast ram a gamecentric fast disc drive a bottleneck free system
you get a machine that can match ps3 in power minus hd resolutions
and is far far easier to programme loads and streams data much better
and has amasing trully next gen gameplay via wiimote and nunchuck
THINK ABOUT IT
cubeboy101,
Thanks for the comment. I think we’re on the same page. Personally, I’m not interested in the hype either. All I’m trying to do here is illustrate how Nintendo has decided not to compete with Microsoft and Sony by creating another high-power CPU and graphics heavy system. Instead, Nintendo has focused on creating a unique gaming experience in hopes of appealing to a new market.
Scott
currect allso remember nintendo themselfs were sceptical saying 25% of a cpus power would be gone JUST DOING HD WORK ,thats not so good when it can go to things like a.i,physics etc …
next gen graphics take next gen horse power and abilitys HD is resolution wii doesnt support true HD but it fully supports NEXT GEN GRAPHICS a lot of people dont understand the differance
some tips for wii players
conponant leads and progressive scan modes should be used and if you have a upscale tv or a image enhancer like LGs XDengine SWITCH IT ON IT FAKES 720P FROM A 480P SIGNAL
I PLAY RES EVIL 4 AT 576I RESOLUTION with xd engine switched on it looks HD
ill play wii at 576p pal resolution and also xd engine switched on 720P FOR FREE kind of
WHAT IM SAYING IS DONT BELIEVE HD HAS SOME MYTHICAL POWER IT DOESNT SONY AND MICROSOFT ARE USING AS HYPE
THEY DONT HAVE ANYTHING ELSE TO HYPE DO THEY
OBSOLETE CONTROLS YOU CARNT HYPE THOSE
i hope cuteboy’s as cute as he is informed—hard to read, but worth it.
i’m sure your entry wasn’t meant to launch a technical discussion, but it was appreciated. thanks for illustrating nintendo’s design choices so clearly. smart stuff.
Davidcus,
Glad you appreciated the effort made here. Thanks for your positive comments!
Scott
I think that the xbox360 is the best all around, but i think that nintendo wii has some interesting features as far as the ps3 I think its way overpriced Xbox all the way.
I do believe that the PS3 price far exceeds the xbox 360s…
Nice work.
Scott: One assumption here is that the Xbox 360/PS3 are strictly gaming devices (which they’re not). Microsoft’s announcements at CES point to the 360 as a media center–so of course it supports HD–and a pretty good one at that. The PS3 is headed in the same direction (also, the PS3 is more expensive than the 360).
Xbox Live is another factor that distinguishes the 360. Through Xbox Live you have access to game demos, trailers, and back-catalog. I’m no MSFT fan, but I’ve been really impressed with how well Xbox Live is executed. Online play through Xbox Live completely changes your experience with some games (someday I’ll blog about how much fun I had playing Tony Hawk’s Project
.
None of this diminishes Nintendo’s accomplishments with the Wii. One important “feature” is that it costs substantially less to develop a game for the Wii than the other platforms. Lower development costs means publishers are willing to take more risks with their titles. This was true of the Gamecube and the DS, too.
(Nintendo is incredibly smart in this way. Laura Ries’s post talks about them like an also-ran 80s gaming company that nearly ran out of steam. That’s completely off the mark. IIRC, Nintendo sold fewer Gamecubes than PS2/Xbox but made more money per consle and title than either Sony or Microsoft. They had a pile of cash to invest in the Wii, while their competitors were selling consoles at cost or a loss.)
Gene,
The point about the Microsoft positioning the XBOX as a media center makes sense and in context of this particular argument, I think, underscores the fact that Nintendo is choosing not to compete with Microsoft and Sony on traditional values, as they are not positioning themselves as a media center solution (to my knowledge).
Also, the other point about Nintendo’s lower game development costs is probably worth adding to the value curve. Another point of differentiation!
Thanks for your comment!
Scott
Used with a decent amount of research, a strategy canvas is such a smart way to help position most any brand. A solid way to get a clear picture of where your product or service fits into the marketplace. Great way to identify competitor weaknesses. We use them for every client before beginning creative and campaign development.
Isn’t this just another marketing term for “niche”.
Seems to me it’s just jargon for something that already exists?
I can agree with the point that the wii is competing for a completely unique market of consumers, however the statistics being shouted around about it having any better components is just a complete fabrication. I love the wii and play it more than my 360, but to say that the wii has a better gpu or cpu is a lie. If you’ve ever played the cross platform games you will find out how inferior the wii graphics actually are. The wii only does graphically well in a pre-rendered environment where it can just modify an existing framework. The wii will never be able to generate even 720i graphics spontaneously like on the ps3’s new farcry 2. It wasn’t meant to do that, because a system that can do that requires an incredibly powerful processor and graphics card that can create, modify, and render HD models with an almost real time speed. The wii can render these models if forced to, but at the cost of a visually noticeable loss of frames per second, which would make the game all but unplayable.
The wii is meant for superior variety in game play and for entertaining game models like mario kart or super smash brothers. With the economy the way that it is right now, it looks incredibly enticing to those who are struggling to make ends meet, but are looking for a reason to justify a next gen system. Cheap accessories, granted many of them, cheaper games, family oriented games, fitness games. Nintendo was trying to take away people’s excuses for not buying a game system, and is doing so incredibly effectively. They have an awesome business model that is truly forward thinking.
The point that most people miss is a the other side of the “uncontested space”…. the Wii tapped a completely new market, namely that of people who wouldn’t buy a game console before.
They may take some customers away from their “competitors”, but they’re really not in the same market - they’re no longer operating reactively, their former competition is irrelevant in their space as they simply don’t exist there!
I would never buy a PS or Xbox; too many buttons, don’t care for more reality (or blood); what appeals to me in Wii is the fun, humour, different games, how the somewhat minimalistic graphics actually exude a lot of attitude and make the characters lifelike… and the controls are just great (both the Wiimote and the balance board).
Competing head-on with other similar value-propositions tends to be a losing gig… so Nintendo found (created!) a new arena. Anyone else coming in there (if they bother) will have to deal with the already established presence, so Nintendo has a great advantage. Maintaining it is not a great problem even in the long run, although they could of course stuff it up.
An argument for the PS3 would be that there is free online play and upgrades updates and what have you. The PS3 is also a media centre and plays music and videos. But one important point is that the PS3 is a Blu-ray dvd player too. not only that it is one of the cheapest Blu-ray players one can buy. also its a games console. HDDVD’s have been banished as Blu-ray DVD’s dominate the market leaving no room for HDDVD’s
I do not own any of the 3 games consoles mentioned but wouldn’t it be good if there was one that could do all the best bits from each console.
low cost
blu-ray
ultimate game play experiance
online interaction with other gamers
WiiStation360
oh and Wii is definately dominating the market
Scott,
Nice post especially considering the time lapse since you wrote this and how things have developed in the gaming arena since. I agree (ed) wholehartedly with you about Wii’s unique proposition as you call it Blue Ocean Strategy (ordering the book by the way - thanks) however I did say agreed.. this is simply for the fact that both Sony & Microsoft are now adopting human movement interfaces similar to the Wii which, arguably was its most valuable and distinctive feature of all the consoles.
It will be interesting to see how the more powerful consoles popular with hardcore gamers develop the user interface to suit MMORPG and POV style games more suited to highend systems.
In the least I think we can say the ‘tide has changed’ and where Wii once the the open blue ocean it would seem we now have a few currents of crimson encroaching on their innnovation.
Regards
J