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First, console wars are muddled. A great number of console owners are in fact duel console owners. I have all 3. Taking away a significant part of Nintendo's audience basically means "Oh by the way you Wii owners should get a PS3/X360 also cause we have something you like that Nintendo doesn't offer." You may entirely be right that Nintendo's current 'upmarket' as you put it strategy will block SONY/MS 'downmarket' strategy. I don't really see it quite so black and white, but ok.
You guys and your blue ocean analogy. The Good Enough strategy IS a way to create a disruptive tech. I don't think its the exact same as Nintendo's Blue Ocean but it sort of does compare.
The Wii has Good Enough performance, its above the GC but can't match the other consoles of the gen, but a large significant segment of the gaming population are fine with it (maybe even prefer it, far as I can tell). It made the Wii cheapest to buy out the gate.
Motion controls are simple enough and intuitive its easy to become efficient in controlling whatever game uses it. This allowed people to play games that had never done so before (this is by the way the blue ocean strategy, get new gamers). The controls are Good Enough for alot of people for alot of games, but not all people and not all games.
Look at the Flip camera. It does nothing new at all, all it does is focus on the KEY elements of a digital camera, make it intuitive to use, cheep to buy. It completely disrupted the digital camera market.
A warrior keeps death on the mind from the moment of their first breath to the moment of their last.
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