Sunday, September 25, 2005

Nintendo's Innovation Strategy

Bill told me to read This very long rant about Nintendo's Innovation Strategy and it's a good read, but overly long. Here is the snippet that made me realise it was talking about familiar territory:
Genre life cycle is the concept that game genres go through distinct stages of market status as they mature:
  • Introduction: A new and addictive set of game mechanics are created.
  • Growth: The game mechanics are experimented with and genre addiction begins to spread.
  • Maturity: The game mechanics are standardized and genre addiction forms a strong market force. Product differentiation occurs primarily through higher layer design elements like plot, license, etc.
  • Decline: The market consolidates around the winners of the king-of-the-genre battles that occurred during the Maturity phase. New games genres begin stealing away the customer base. With less financial reward, less games are released.
  • Niche: A population of hardcore genre addicts provides both the development resources and audience for the continued development of games in the genre. Quality decreases.
Essentially the article is talking about what everybody knows as The Product Lifecycle.
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Product is developed (costs money), product is introduced (customers start to buy the product), there is a period of growth (where the money is to be made), other competitors release competing products (not so profitable) and then consumers move on to other products (see Foster's S Curve for a better understanding on that if you like).

The loss in development doesn't necessarily apply so much to games, but what he is trying to get across in his bloated article is that Nintendo needs to build freakish hardware so that they get on the upward slope of sales early with new types of games. Instead of producing games in a crowded market where it is difficult for your product to be defined (like with the current world war 2 FPS market).

The only problem I have with this is that it relies on a very whimsical type of product development where the product is constantly changing. So when FPS games are popular Nintendo is off doing something completely different and not necessarily giving the customer what they want (Nintendo has never had a serious racing game like Gran Turismo for exsample).