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senortaco said:

 

Correct me if I'm wrong, but I thought that with disruption the goal is to move upsteam while your competiors are trying to move downsteam, basically while your competiors are trying to take your turf, you're already working on getting theirs.

...So far everything that Microsoft & Sony has done, from avators, to motion controls, has been reactive instead of proactive to the disruption that Nintendo caused. The repackaged systems by Sony & Microsoft has been the closest to offsetting the disruption that Nintendo has caused. If Nintendo repackaged (although I would do it) then they are following instead of leading at that point.

The goal is to eat away at the markets while the competition abandons them. The competitor continues moving upstream towards their most reliable customers, ie: the hardcore.

For example, the ps2 was a highly varied product. It had casual games, core games, and hardcore games. Then ps3 came out. It was too expensive for the casual, and had no games targeting them. They aimed too high. Nintendo moved in and took it all, and expanded the market into an even more casual player, the type who never plays games period (like wiifit adopters so to speak). It was too early to move upstream then, but look at nintendo's last e3 conference. Mostly core games. That is a complete change. It was a move upstream. However, Sony isn't abandoning the core, they are reinforcing and expanding as well.

http://www.self.org/news/Great_Disruption.pdf

Moving downstream leads to lower profit margins, and therefore, an initial shrink so a lot of companies at the top don't do it because the basis of capitalism and stock is to continue expanding and making more money year over year. However, in the long term, moving downstream is the best possible solution. You lose a lot of money early on because you have to develop new products and price your product a lot lower, but you prevent your market from shrinking upwards. Being at the top is a trap.