Innovative Strategies Assignment
Where Would You Locate the Wii in Terms of the Degrees of Innovation Matrix
I would locate Wii in the disruptive innovation. Initially, it presented a unique feature which was revolutionary to the gaming scene. In particular, it introduced the wireless game controllers. As a consequence, this necessitated competitors to come up with equally appealing features. In light of this, it is in the disruptive distribution since it changed the entire gaming industry. Comparatively, so disruptive was Wii’s entry that it upstaged the existing giants’ dominance in this sector. Traditionally, the practice in the gaming console industry was based purely on technological performance. Specifically, this was the ability to offer faster graphics processors and massive storage capacities. However, Nintendo’s revolutionary entry strategy overlooked these conventional competitive avenues. Instead, it proposed a totally different approach which had far-fetched effects in their business, the customers, and the competitors. Noteworthy, the impact the wireless gaming console had on the previously abandoned market segment was evident. Notably, the Wii was introduced in 2006 and by 2007; Sony’s PlayStation was being outsold three to one.
What Was the Value Proposition Being Put Forward by the Wii and How did This
Differ From the PlayStation and the Xbox? Who Was the Value Proposition Aimed
at and Why?
Conventionally, both X-Box and PlayStation utilised advanced power processors, graphics, and storage (Campbell-Kelly & Aspray 2004). As a result, Wii had to be unique in order to compete in this market. In effect, Wii was introduced with no buttons and joysticks. In essence, the value proposition of Wii was the ease of using this gaming device to play video games. Further, this feature was aimed at the non-conventional gamers. Notably, these included the females, the elderly, and family gamers (Fawkes 2008).
Basically, this segment of gamers needed something fun. In retrospect, the coming together of all these groups of people created immense value for the customers as common activities could transpire across persons of diverse age groups. In light of this, the emotional response exhibited by the customers assured of its delivery of its intended purpose. Importantly, the “Wii remote” made it possible to play games “physically”. In essence, this group was targeted as they formed a large portion of untapped market (Campbell-Kelly & Aspray 2004). For instance, games like tennis became much more involving with the player mimicking real-life play movements. Essentially, this was in contrast to the norm where joysticks would be wired up to the computers. Important to note, Wii created additional value to the customers as it was priced at relatively lower cost than similar products in the market. Noteworthy, this was one of the factors that enabled it to penetrate into this industry.
What Was the Business Model and the Associated Revenue Generation Mechanism
Used for the Wii?
Ideally, the Wii capitalized on identification of an easy-to-use and fun gaming console. In essence, this was expected to drive up sales leading to increased market share from the existing players (Jevic, Howlett, & Jain 2007). Importantly, it is the efficacy with which human-computer interaction gaming model that drove up profits for Nintendo. Noteworthy, the available gaming technologies at that time were so inflexible that they had the risk of rendering each other extinct (Hertz et al. 2013). In effect, Wii created a system that used add-ons as a source of revenue. Noteworthy, the company’s add-ons provided customers with health information on their health-gaming devices such as the Wii Fit (Halton 2010). In brief, the Wii Fit was a fitness tool that resembled a bathroom weighing scale. Ideally, a gamer could do yoga or aerobics while the Wii Fit took their body mass index (BMI).
Accordingly, the provision of relevant health information to gamers-cum-fitness enthusiasts was another revenue stream for the company (Chaplin & Ruby 2006). Basically, the fundamental revenue stream was to be from the profits from the console sales. Additionally, Nintendo capitalized on obtaining royalties from the gamers. Essentially, with the exponential growth which was being experienced in the gaming space, this was potentially a major revenue stream avenue for the company. Noteworthy, Nintendo channelled their business model mostly towards their non-customers while ensuring that their existing customers were further impressed.
Markedly, the Wii had three approaches that resulted in it realizing maximum profits. Firstly, the business made income from the sale of gaming console just like the existing gaming companies. Secondly, the business used adds-on on its gaming devices to attract the health conscious customers. In effect, this was a creation of a new market that led to increased profitability in the business. Finally, the use of wireless gaming system led to the development of a new segment in the industry that relied on the human-computer interaction gaming model. Noteworthy, this was instrumental in increasing the demand for Wii gaming products.
Campbell-Kelly, M, & Aspray, W 2004, ‘Computer: A history of the information machine (Sloan Technology’) (2nd Ed.), West View Press, Boulder, Colorado.
Chaplin, H, & Ruby, A 2006, ‘Smartbomb: The quest for art, entertainment, and big bucks in the videogame revolution,’ Algonquin Publishers, New York, NY.
Fawkes, P 2008, Stephen Fry on the Wii’s popularity, viewed 11 June 2016, <http://www.psfk.com/2008/09/stephen-fry-on-the-wiis-popularity.html>
Halton, J 2010, ‘Rehabilitation with the Nintendo Wii: Experiences at a rehabilitation hospital,’ Occupation Therapy Now vol. 12, no. 3, pp. 1-14.
Herz, N, Mehta, S, Sethi, K, Jackson, P, Hall, P, & Morgan, J 2013, ‘Nintendo Wii rehabilitation (“Wii-hab”) provides benefits in Parkinson’s disease,’ Journal of American Medical Association, vol. 6, no. 2, pp. 1-13.
Jevic, G, Howlett, R, & Jain, L 2007, ‘Agent and multi-agent systems: Technologies and applications: 9th KES-AMSTA 2015 Sorento, Italy, June 2015, Proceedings,’ Springer, New York, NY.