Case study: Blue Ocean Strategy - Nintendo Wii

Nintendo’s successful Wii game console is an example of a multi-sided platform business model pattern.

Let's look at how Nintendo differentiated itself from competitors Sony and Microsoft XBOX from the standpoint of Blue Ocean Strategy.

Compared to SONY Playstation and Microsoft XBOX, Nintendo pursued a fundamentally different strategy and business model with Wii. The heart of Nintendo strategy was the assumption that consoles do not necessarily require leading-edge power and performance. This was a radical stance in an industry that traditionally competed on technological performance, graphic quality, and game realism: factors valued primarily by die-hard gaming fans. Nintendo shifted its focus to providing a new form of player interaction targeted at a wider demographic than the traditional avid game audience.

With the Wii Nintendo brought to market a console that technologically underperformed rival console, but boosted the fun factor with new motion technology.Players could control the game through a controller simply through physical movement.

The Wii was an immediate success with casual gamers and outsold its rivals focused on traditional market of “hardcore”.

Nintendo new business model has the following characteristics: A shift from “hardcore” to casual gamers, which allowed the company to reduce console performance and add a new element of motion control that created more fun; elimination of state-of-the-art chip development and increased of use of off-the-shelf components; reducing cost and allowing lower console prices; elimination of console subsidies resulting in profit on each console sold.

Recently, Microsoft XBOX has released a motion controlled device, the Kinetic. The device added to the XBOX, and the game will be controlled by the gamers body...

references: businessmodelalchemist, Alex Osterwalder