In May, Nintendo will seek to expand its successful strategy of expanding the video game market by launching the U.S. version of “Wii Fit.” All signs suggest that Nintendo’s strategy of “competing against nonconsumption” will continue to thrive.
Nintendo’s strategy has long been one of our favorites. While Microsoft (who makes the Xbox 360) and Sony (who makes the Playstation 3) are locked in an arm’s race to provide cutting-edge game play to demanding customers, Nintendo is trying to reach new customers.
Arguably Nintendo’s first breakthrough success with this market expansion strategy was “Brain Age.” The handheld game targeted Baby Boomers who wanted an easy way to combat the effects of aging on their mental acuity—hardly the typical gamer market!
In 2006 Nintendo launched the Wii. The console’s innovative, intuitive controller makes video game playing so simple that my two-year old son can play the baseball game (admittedly not particular well).
Nintendo’s strategy is not accidental. CEO Satoru Iwata said “Some people put their money on the screen, but we decided to spend ours on the gaming experience. It’s an investment … not simply to improve the market—but to disrupt it.”
We call this sort of strategy “competing against nonconsumption” …
Read the rest at Scott's Harvard Management blog, Innovation Insights