Casual Nintendo: the Blue Ocean Strategy

What are casual games? They could be described as quick and fun mobile, browser, or console games, easily played and understood. Because of their accessibility, these games are usually marketed at “non-gamers”, in other words people who are not traditional gamers and who don’t sink hours or days into games, but who could still enjoy gaming now and again. This genre is usually associated with small publishers or mobile developers, but one video game giant has famously dipped its toes in the casual market: Nintendo and their Blue Ocean strategy.

In the early 2000s, hardware competition in the gaming industry was rife. Sony was riding on the success of its acclaimed PlayStation consoles, followed with the PlayStation 3 in 2006. Microsoft, the computing giant, had entered the market with the Xbox and, in 2005, indicated it was here to stay by releasing its follow-up, the Xbox 360. Nintendo found themselves and in a bind: how could they retain (or regain) their market-share with their new 2006 console while competing with this increasingly sophisticated competition?

Nintendo turned away from technical escalation and chose instead to apply a strategy known as “Blue Ocean”. Perrin Kaplan, VP of Nintendo of America in 2006, explains this model in an interview: “Seeing a Blue Ocean is the notion of creating a market where there initially was none–going out where nobody has yet gone. Red Ocean is what our competitors do–heated competition where sales are finite and the product is fairly predictable.” (Kaplan, 2006) He then explains how Nintendo will now strive to make games for people who have never played games, or who may not like core gaming genres such as first-person shooters or role-playing games, adding on this subject that these games were “not the core of what we want to develop, but we do offer them” (Kaplan, 2006).

The result? A resounding success. This new Blue Ocean console, the Wii, sold over 100 million units (Nintendo, no date). Despite its technical inferiority, the Wii allowed for sensing devices, allowing the platform to release game genres never seen before. One of the Wii’s flagship titles, Wii Fit, came with sensing platform and prompted the user to do physical exercise, monitored and explained on-screen; the game sold 42 million copies worldwide (Hollensen, 2013). Nintendo released numerous titles based on family mini-games (Wii Sports) or petting animals (Nintendogs), all with great results.

However, this success was not to last eternally. By 2011, Sony and Microsoft had their own version of the Wii’s sensing device, and had regained their market share superiority over Nintendo (Hollensen, 2013). This shows that appealing to the Blue Ocean “new gamers” proved to be insufficient as the only growth incentive, unfortunately for Nintendo. With their following console, the Wii U, Nintendo moved back towards a hardcore gaming market, a strategy which resulted in the console selling a disappointing 2 million less units than expected in its first year (Hollensen 2013).

Has the Blue Ocean strategy damaged Nintendo for good by focusing on a casual market that proved to be lacking? Will their next console attempt a full swing back to its principles and attempt to attract yet more new gamers, or will it succeed in convincing hardcore gamers to pay attention? We should have the answer soon!


References

Hollensen, S (2013) ‘The Blue Ocean that disappeared – The case of Nintendo Wii’, Journal of Business Strategy, Vol. 34: 5, pp. 25-35. Available at: http://www.academia.edu/3254871/Hollensen_S._2013_The_Blue_Ocean_that_disappeared_-_The_case_of_Nintendo_Wii_Journal_of_Business_Strategy_Vol._34_5_pp._25-35 (Accessed 22 February 2017)

Kaplan, P (2006) ‘Nintendo’s New Look’. Interviewed by Rachel Rosmarin for Forbes, 7 February. Available at: http://www.forbes.com/2006/02/07/xbox-ps3-revolution-cx_rr_0207nintendo.html (Accessed 22 February 2017)

Nintendo (no date) ‘Hardware and Software Sales Units’ [online]. Available at: https://www.nintendo.co.jp/ir/en/sales/hard_soft/ (Accessed 22 February 2017)

Images

Wind Waker Ocean (2014) [image]. Available at: http://www.howtobeabettergamer.com/2014/07/11-years-later-i-finally-beat-wind-waker.html (Accessed 22 February 2017)

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