Born in the 1970s, the early notable key player s in the video game industry aimed at teenagers in form

of arcade games using malls and video games arcades as games centers. However, with the increasing popularity of personal computers in the 1980s and early 1990s, the video game industry found its way into households around the globe through the introduction of home consoles albeit the target customer group remained teenagers. With notable new players such as (Sony, Microsoft and Nintendo) coming in to the market, the video game market has evolved into a mature and structured industry with increasing competitiveness. In 1985, Nintendo, with the launch of the NES (Nintendo Entertainment System) introduced a number of innovations to the industry such as replacing joystick with a pad controller and launch of 2D games, while accurately reproducing arcade games. With the belief that 3D games will provide a more interesting experience than the traditional 2D game, Sony launched the PS (PlayStation) in 1995 shifting the dynamics of the competition with its larger customer group target(primarily young male adults with high disposable income) and licensing 3rd party game developers to develop for the PlayStation. Microsoft, realizing the success of Sonys product and the impact of the booming video game market may have on its PC and software domain with the advent of an improved version of the PlayStation (PS2) by Sony in 2000 entered the video game console market and went ahead to develop its video game console - the Xbox, which was launched in 2001. As at 2008, the three big players in the market were Nintendo (Wii), Microsoft (Xbox360) and Sony (PS3) With Sony taking a dominant position in the industry by capturing the significant portion of the market, Nintendo, desperate to reclaim its dominating position in the market had to adopt a new market strategy (called the Wii strategy). According to analysts, Nintendo Wiis strategy can be summarized as disruptive strategy/technology/innovation. Simply put, Disruptive technology is a new technology that unexpectedly displaces or uproots an established technology. Clayton M. Christensen (a professor at the Harvard Business School) described disruptive technology as service designed for new set of customers .He argued that successful and well managed companies that are responsive to customer needs and strong in R&D can as well be hurt by disruptive technologies. This is amplified in the case of Nintendos fight for dominance from the already successful key players in the gaming industry. The Wii, although technically inferior was set to capture majority of the market-share with focus on its strength on factors other than technical prowess.

Realizing the difficulty of competing with Sony and Microsoft with their appealing and technical hardware accessories, Nintendo extended to a non-existent part of the market i.e. bringing games to non-gamers with simplicity for newgamers(novices) focusing more on using games as a medium for ultimate entertainment(simulation of real-life scenarios). With the invention of the Wii, Nintendo extended its impact to other industries like the health industry through the Wii Fit, in a way to get families together and show playing video games can help people stay fit. To promote the Wii, Nintendo adopted a more experimental approach (word-of mouth strategy) which proved to be more effective than the traditional advertising by its key competitors by recruiting selected sub-urban housewives about the fact that Wii was a game for the whole family to enjoy together. Other competitors can either choose a passive or active approach to the challenge posed by the Nintendos strategy. A passive reaction would only serve to bolster the Nintendos approach while an active strategy can either be to import the capabilities of the Nintendo Wii into their own products (say PS2/PS3 enhanced or Xbox reloaded) with reduction in cost of consoles or to adopt a disrupt the disruptor approach i.e. employ the same strategy albeit in a different way. The disrupt the disruptor approach is therefore highly recommended for other competitors. By careful and intensive research, fallow segments of the market, if discovered, can be tapped into. This actually should have a greater chance of success and shift the market equilibrium in their favor.

References:

Christensen, C. and Anthony, S. (8 January 2007) What Should Sony Do Next, Forbes, www.forbes.com/2007/08/01/sonygames-Innovation-leadcz_cc_0802christensen.html (accessed 25 June 2008). Christensen, 1999, The Innovators Dilemma, Harvard Business School Press. http://ezinearticles.com/?expert=Allen_Crow

Bower, J.L. and Christensen, C. (1 January 1995) Disruptive Technologies: Catching the Wave Harvard Business Review, www.hbsp.harvard.edu/b01/en/common/item_detail.jhtml Sandstrm, Christian G. (2010). "A revised perspective on Disruptive Innovation Exploring Value, Networks and Business models (Theisis submitted to Chalmers University of Technology, Gteborg, Sweden) http://www.nintendo.com/corp/history.jsp