One of my favorite hobbies is to play video games. There’s just something about them. And I’m not alone either… the video game industry is a hot market. And it got me thinking the other day about how the big three companies (Microsoft, Sony, and Nintendo) went about conducting business in this current “generation” of video game consoles (the X-Box 360, PlayStation 3, and Wii, respectively). What can we learn about business decisions by looking at the ones made by these three companies? Read on to find out!
When designing their new systems, Microsoft and Sony both decided to create enhanced versions of their previous systems, capable of outputting in HD, utilizing new video technology, building extensive online communities, and so on. Nintendo, on the other hand, chose to innovate, rather than expand. The introduced an entirely new way of playing (with a motion-sensitive controller), and opened the door to completely new kinds of games.
What were the ramifications of Nintendo’s decision to build something completely different, rather than try fighting with Microsoft and Sony in terms of power? It was truly a gamble, because they would need to come up with something incredible if they weren’t going to fight in terms of power. The question is, how did they do?
The answer is pretty simple: Nintendo is destroying the competition. In this era of bigger games, fancier graphics, robust online communities, etc., the most successful company (in terms of units sold) is the one that refused to play that game.
It seems counter-intuitive. After all, isn’t one of the cardinal rules of business and marketing to know your audience? Doesn’t the “typical” gamer want a more powerful system, one that can run nicer graphics, larger worlds, and all those new features boasted by the Microsoft and Sony consoles? Absolutely. But that’s not who Nintendo is marketing to.
Nintendo is marketing to everybody else. The “non-gamers”. They’re targeting entire families. While Microsoft and Sony duke it out to win over members of the established niche group, Nintendo is just bringing in everybody else. My mother, who I could never get to play my X-Box for more than 5 minutes, bought a Wii. And she continues to buy games for it. My whole family plays on occasion. Even my 4 year-old cousin plays when she comes to visit.
So what’s my point? What’s the lesson I think you should take away from this? I guess I’m just trying to say that when it comes to building up your business, you don’t always need to play by the established rules to win. Sometimes, thinking outside the box (as cliché as that may be) is the way to go. You need to be smart about it, of course, but don’t be afraid to be bold.
Know of any other examples of this kind of effect? Drop us a link in the comments!
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