I was in a Toys R Us the other day and saw that they had a couple of PS3’s behind the counter. Of course, when I asked about the Wii, the clerk chuckled and said, “Sorry, our last shipment sold out in a few hours. I have no clue when the next shipment will arrive.” Not the scenario many had envisioned this time last year when all eyes were on the PS3.
Nintendo’s last generation console, the Gamecube, was not as powerful as the other systems (Microsoft’s Xbox and Sony’s Playstation 2). Consequently it has become a system targeted at younger, less demanding gamers. Unfortunately for Nintendo, not being at the cutting edge meant becoming less relevant to the market. That was until the Wii came along. What Nintendo has done with the Wii is a perfect illustration of how a company can identify and develop successful innovations by taking a different approach to analyzing their market.
This approach, sometimes called a “jobs analysis”, builds on the work of Harvard Business School professor Theodore Leavitt. Professor Leavitt used to tell his students that when a customer buys a drill, it’s not the drill they are buying, rather it’s the hole. A product is simply a means to an end. It is “hired” to enable the customer to complete a job. Using the drill example, the job that needs to get done is making the hole; the drill is just a way to complete that job.
Unfortunately, few companies take this approach to market and competitive analysis. Instead, companies segment their markets along more traditional dimensions such as product characteristics or customer demographics. The drill company that is busy designing drills for stay-at-home-moms or commercial grade drills is likely to miss the start-up that has figured out a completely new way to drill holes.
So what does this have to do with the Wii? It turns out that using the jobs lens to view the video game market helps to explain why Nintendo has a hit and provides a good lesson in the value of a jobs analysis.
At the simplest level, the “job” of a video gamer is to escape into a different world for a short period of time. The more immersive and realistic the game, the better it achieves this objective. For many years, the way to make video games more immersive was to improve the quality of the graphics. In the early days of video games, characters were little more than blocks on the screen. A football player looked pretty much the same as a knight or an assassin. As a result, companies were primarily focused on making the images look more realistic. They succeeded. Today, games such as Madden 2007 are so realistic they rival live television broadcasts.
The most recent generation of game systems maintains this graphical focus. Microsoft’s Xbox 360 has high definition output and state of the art graphics chips. For the graphics engine in the Playstation 3, Sony developed a micro processor almost as powerful as a super computer of a few years ago. Both companies are engaged in a graphic “arms race.”
Nintendo, which lost the graphics arms race the last time around, has chosen to go in a different direction this time. While the graphics quality of the Wii is fine, it doesn’t compare to the graphics of either the Xbox 360 or the Playstation 3. Nintendo believes that the graphics are good enough for most people, and that the way to make video games more immersive is to get the player physically involved in the game. The Wii has a unique wireless controller that allows game players to control what they see on screen via their motions. When playing video baseball, instead of hitting a button to swing the bat, you swing the controller just like a real bat. Rather than move a joystick to aim a gun, you aim the controller. And when you thrust and parry with the controller, the knight on the screen mimics your actions. Nintendo is betting that having your physical movements reflected by characters on the screen will make the game playing experience more real and thus do a better job of helping the gamer escape into a different world.
An added bonus of Nintendo’s approach is that it promises to be make video games much easier, and this has the potential to expand the market to new consumers. Video games today are tough. Gamers spend millions each year on books about game specific strategies. Even then, success requires agile fingers and fast reflexes. Playing football on a system today is an exercise in futility for all but the most adept players. Snap the ball with button A, pass to one receiver with the B button, another receiver with the C button, pull back on the joystick while pressing the A and B buttons simultaneously to hit the hot receiver during a blitz – it’s overwhelming!
Compare this to football on the Wii. To pass to a receiver, just hold the controller and mimic throwing a ball in his direction. The faster your arm moves, the faster the ball comes out of your hands. Not only is this more immersive, it’s much easier.
Pretty cool stuff.
Oh.. and I want a Wii..!!
Posted by ChrisC 
Posted by ChrisC 
Posted by ChrisC 
