I like how Klepek introduces this. He says Microsoft has ‘taken’ Nintendo’s buzzword of ‘disruption’! It think its funny since everyone here fully knows that disruption isn’t a ‘buzzword’.
Here is the story about Microsoft’s strategy to ‘disrupt’ gaming. I’m not convinced that XNA will do anything since I’ve worked in the indie scene and there is a reason why, in order to be considered for WiiWare games on Nintendo, you absolutely must have your own office. The indy scene is better taken care of on PC anyway.
At E3, will Microsoft suddenly declare themselves the ‘disruptor’ now? Unfortunately for them, Peter Moore has let the cat out of the bag letting it be known that the Wii forced Microsoft to change its strategy.
Apparently, a X-mote is said to be ‘definitely’ coming. But the question is not the hardware. Any idiot can make hardware. The real challenge, as Iwata replied to the investors, is the software. At E3, pay more attention to the software using the controller than the controller itself. With the challenges third parties have had with the Wii-mote, I wonder what type of software we will see.
Comments will be open for this one for testing purposes. What do you think what Microsoft is doing?
Random Mealstorm fangirl dropping by to ask: What are the chances of Microsoft actually ‘beating’ the Wii? I mean, what does the X-Box have to do to pull that off? (I’m not even counting on Sony at this point, they’re a joke.)
It seems to be such an uphill climb and that system is so tainted with hardcoreism (which as you imply, is actually a Bad Thing). If I’m reading you correctly, isn’t ‘top-down disruption’ damn near impossible to pull off? That is what they’re trying to do, right?
You wrote that there’s two ways to deal with disruption: fight or flight.
MS wants to fight, but their graph reminds me of something you wrote, that if they start by catering to the hardcore, they may later feel stabbed in the back when the ‘retards’ join the fray.
In short, aren’t they setting themselves to a big fall? Or is this is an attempt to merely to buy themselves some time until the Next Big Thing comes?
And slightly OT, what’s your take on the Wii’s lack of storage? Is it meaningful or just a hiccup on their path to world domination?
By: Lum on June 18, 2008
at 5:45 pm
Random Malstrom Fan Girl poped out to respond:
I believe that answer is in “Nintendo’s Shield” and it’s called Assymetries (damn not been english my first language!) of Motivations. Depends what actually Microsoft wants, and probably they want to simply stop Nintendo growing somehow. And they want to stop Google grow somehow, and thwy want to stop linux grow somehow… even Apple. I wonder from which place they don’t have any problems actually…
By: GinnyN on June 18, 2008
at 9:07 pm
w00t! Malstrom fangirls! I feel blessed. :)
Lum, the subject of whether Microsoft can co-opt Nintendo’s disruption will become the major topic after E3 (from all over the media). It is clear Microsoft is moving in that direction and Sony, it looks like, is preparing a defensive co-opt.
To be honest, we just won’t know until after E3. All we have are ‘ifs’. What will matter more than new controllers is the software for them.
What we can look at right now are the companies themselves. Disruption isn’t just the product, it is the people in the companies. Christensen literature says that you can tell a company is being disrupted when senior executives keep changing. This is currently happening in the Microsoft Game Division.
A disruptive company must first get key senior executives in tune with disruption before they can actually disrupt. Before the Wii, Nintendo got Iwata and Reggie and the company slowly began to transform during the Gamecube years. Lately, Reggie has replaced old NOA executives such as Perrin Kaplan and George Harris with former Yahoo exec Dunaway who, on the Nintendo page announcing her new role at Nintendo, says she was being hired to help Nintendo be a disruptive company.
Contrast this to Sony. Sony needs new blood in their executive team. This hasn’t happened and essentially ensures that Sony ‘doesn’t get it’ yet.
The sudden departure of Phil Harrison and Peter Moore are further indications of votes of ‘no confidence’ at their companies. They would have stayed if they thought they knew the companies knew what they were doing. Both Moore and Harrison, once freed, have praised Nintendo’s strategy. Both are seeking to change the companies they are currently at to embrace ‘New Generation’ values. Moore has hung a picture of Iwata in the building to remind employees how they need to go after the expanded audience.
No, I don’t think Microsoft and Sony have any chance at all to turn things around this console cycle. They will even continue to suffer longterm because they still haven’t changed their senior executive teams to bring anyone who focuses in disruption, either in making it or defending against it.
Ginny is right that ‘Asymmetries of Motivation’ in the “Finding Nintendo’s Shield” article address the subject in more depth. (Don’t worry Ginny. Most English native speakers have trouble with the word asymmetries too!)
Frankly, we are in a calm before the storm. Microsoft and Sony will respond to the Wii this E3 and the hardcore, as well as concerted efforts by certain viral marketers, will proclaim the Wii is doomed. We are just going to have to wait until after E3. Everything right now is at ‘if this’ and ‘if that’. After E3, we will know.
As for Wii space shortage, Nintendo, as well as Microsoft and Sony, underestimated how fast digital downloads would move. In 2006, the space was considered ‘plenty’. They will likely find a solution for it. But the solution is to fix the bottleneck to more profits, not a catering to hardcore demands. Both Microsoft and Sony have released additional hard-drive space as well.
By: seanmalstrom on June 19, 2008
at 12:24 am
So is Microsoft afraid of Nintendo disrupting them in the video game business or the digital entertainment business? Is the Wii somehow gonna take sales from Windows?
I only ask since Malstrom seems to be the only one thinking about this type of stuff. (I’d bet other less public people are as well)
By: liquidninja on June 19, 2008
at 12:37 am
eh I like this thought, since you: Malstrom
wrote that a top-down disruption is really hard, but on top of that: it will easily be countered by a bottum-up disruption….
so even is MS does something, Ninty might come up with something even better.
so they will always be two steps ahead, right?
since MS is not trying to disrupt, it’s just copying…
By: Kevin on June 19, 2008
at 2:16 am
@liquidninja,
Microsoft has its hands, as well as Sony, in many different markets. When it is referred that Nintendo is disrupting Microsoft, it means in their video game business model. Nintendo is not making PC operating systems or word processors and spread sheets for corporations.
The reason why Microsoft is so vulnerable is because they have never succeeded in the consumer market. Windows is bundled with new PCs. During the rise of PCs, Microsoft let hardware vendors compete against one another while its software was placed on all the systems.
Microsoft is no stranger to disruption. They have both been the disruptor and the disrupted. After “Innovator’s Dilemma” came out, Bill Gates complained that every new product idea was gloated as being ‘disruptive’. In the tech industry, competition is fierce and many companies are attempting to disrupt Microsoft.
In the battle against Netscape, Microsoft simply made a better browser and integrated it with Windows. Microsoft won because incumbents always win direct competitions due to superior resources.
In the battle against Google, however, Microsoft is currently being chipped away. Google’s business model relies on online advertising which Microsoft cannot affect. Google also has different motivations than Microsoft. The reason why Microsoft is attempting to buy Yahoo is because they cannot compete with Google despite their superior resources.
In terms of video game consoles, Microsoft made the entertainment division, separate from the main Microsoft group, to house the Zune and Xbox. Both Zune and Xbox require software and hardware integration which is not what Microsoft normally does (which explains the separation). While cheaply made hardware might have sold in the PC market, it doesn’t work in the console market as the RROD illustrates.
In disruptive battles, the amount of resources a firm has no longer matters. It is no longer the size of the dog in the fight, it is the size of the fight in the dog. A company has to be motivated to reach out to the new market. It can’t simply succeed by focusing on what their competitors are doing.
Windows isn’t a video game console so it obviously isn’t going to be disrupted by Nintendo. However, Windows gaming is currently being disrupted by online sources which explains the fall in retail PC sales and the rise of online games. Adobe’s platform of flash is rising as flash gaming rises for example. Alex St. John, as well as Nolan Bushnell among others, have discussed the disruption of the PC gaming model.
Here is a funny Alex St. John interview for you to read: http://www.gamespot.com/news/6156565.html
While upstreaming does go on with the Wii, it also goes on with these new online games. They are getting better and better and, soon, they will fully disrupt the older PC game model. This future is actually pretty interesting. Imagine all PC games for free… just have to endure some ads to play it.
By: seanmalstrom on June 19, 2008
at 3:47 am