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Wii Blue Ocean Strategy

The document discusses the strategic approach of Nintendo in creating the Wii using the Blue Ocean Strategy, emphasizing key factors such as eliminating unnecessary features, reducing graphics and physics, and raising the fun element. Nintendo's focus on fun over technical specifications led to the Wii's immense popularity and sales success, outpacing competitors like the PS3 and Xbox 360. By avoiding direct competition and creating a unique market space, Nintendo effectively rendered its rivals irrelevant.

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25 views2 pages

Wii Blue Ocean Strategy

The document discusses the strategic approach of Nintendo in creating the Wii using the Blue Ocean Strategy, emphasizing key factors such as eliminating unnecessary features, reducing graphics and physics, and raising the fun element. Nintendo's focus on fun over technical specifications led to the Wii's immense popularity and sales success, outpacing competitors like the PS3 and Xbox 360. By avoiding direct competition and creating a unique market space, Nintendo effectively rendered its rivals irrelevant.

Uploaded by

soopa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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In April I'll try to show some Strategy Canvases built with the Blue Ocean Strategy (BOS) practitioner's

tool I developed, BOS Createware. I'll start with the Nintendo Wii. Nintendo has never released the
strategy canvas they used, but the canvas above is a good guess of what it probably looks like.

Let's look at the Key Factors, and examine how Nintendo likely arrived at them:

Eliminated Movie Playing. The PS3 plays Blu-Ray disks. The XBox 360 plays HD-DVD. Both play DVD's.
The Wii plays ... nothing. Only games. Nintendo realized that high-resolution movies on a game machine
are Technological Innovation: innovation solely for the sake of innovating. High-resolution movie-playing
adds cost that doesn't align with the added consumer value.

Reduced Graphics & Physics. The Wii has good-enough graphics: they're fine. Using the six-path
category of Strategic Groups shows people trade-up on entertainment to TV and movies or down to
board-games. Nintendo obviously realized the cost of trying to invent a widget that traded up to the
higher strategic group, movies, didn't outweigh the cost. Physics is similar: balls bounce just fine but if
you're looking for real-time rendering of wind rustling through leaves look outside your window: this
isn't something important enough to justify the added cost.

Raised Fun. This one almost seems obvious but, in retrospect it's probably the biggest six-path key
factor responsible for the Wii's success. Microsoft and Sony concentrated entirely on functional
elements: great graphics processors, physics engines, specialized chips, etc... Nintendo used the six-path
element of Functional/Emotional to turn that around. Everything about the Wii is Fun: Fun -- an emotion
element -- was placed over chips, a functional element. Mii's are fun; the fact the PS3 does a petaflop of
calculations is cool, but not especially fun. Besides raising the Fun element Nintendo created the Virtual
Console to take advantage of that giant game library they had lying around.

Created the Wiimote: Nintendo's Magic Wand. I've written an entire post just about the Wiimote: here's
a link -- http://www.valueinnovation.net/2008/02/create-tech-innovation.html.

Repeating the well-known end-result, the Wii blew out of stock the day it was released and has
remained unavailable ever since. PS3's and XBox 360's are stacked up as tall as a person on showroom
floors, but you still have to show up at store opening times for the chance of landing a Wii. At last count
the Wii was outselling the PS3 4:1 in Japan and is projected to overtake the XBox 360 in total volume of
consoles by year-end despite that the 360 had a year head-start. Nintendo didn't compete in the Red
Ocean: they created a Blue Ocean that rendered the competition irrelevant.

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