Nintendo may exit handhelds in 10 years due to disruption

[famousringo]

WereKitten said:

MrT-Tar said:

This is assuming Nintendo won't do anything at all

If I were more wicked than I am, I could fill this with "blah blah, asymmetry of disruption, blah blah". Which would mean that N. being the incumbent would have to out-disrupt the disruptors by going even cheaper, even lighter, even simpler, even less bound to hardware - very hard for them - or face an uphill defensive battle they probably can't win.

But since I don't believe the disruption theories are universal enough to cover for evolution of complex intellectual products such as books, movies or videogames, I won't even pretend to play the part. Still a conundrum for those who do believe in the theory, or at least did when they could call N. the disruptor.

Some people might portray disruptions as inevitable, but they aren't. They're just a very bad position for the incumbent. An incumbent usually has to be very flexible and suffer a certain degree of damage to its bottom line to stave off a disruption, and a lot of companies fail to muster the will, insight, and agility required to do it.

Microsoft was mentioned earlier in the thread. A few years ago, their hegemony in laptop operating systems was threatened by cheap netbooks running Linux. They responded effectively by coming out with netbook-targeted Windows SKUs, slashing licensing fees, and leveraging their considerable influence over OEMs. It cost Microsoft a good chunk of money, but good luck finding a Linux-based netbook nowadays. Disruption averted. Now we'll see how MS does against the tablet onslaught.

Nintendo's response so far has been to co-opt digital distribution, consolidate its position in the upmarket, and offer unique value that touchscreen phones have a hard time replicating, like 3D displays. Seems pretty defensive, but I think Nintendo can hold a lot of ground in this market in the short term, even if pocket computers cut off growth potential. There's no magic disruption bullet, so Nintendo is circling the wagons until an opportunity arises to break free. The question is when will such an opportunity arises, will Nintendo be able to seize it? And how much ground can they hold in the meantime?