Shigeru Miyamoto: "In the world of fun, there's only number one."

[The_Liquid_Laser]

Jumpin said:

The_Liquid_Laser said:

To put it more precisely it is actually handheld consoles in general that are a crappy product for crappy customers.  But disruptive products also improve over time and that is how they move upmarket.  The Switch is a handheld console moving upmarket.  That is when the disruption is really felt by the market.  The Gameboy created the market, and the handheld systems have steadily improved over time, but Switch is the handheld market invading the home market space.

Blue ocean, on the other hand, is a creation of a new uncontested space.  It is about avoiding competition by creating a new market or growing an existing one.  Nintendo did not create a new market with the Switch, because it isn't selling to a new type of customer.  It is true that the handheld market is currently uncontested space, but that is not from the Blue Ocean Strategy.  It is because Nintendo fought very hard with the 3DS and defeated Sony and the Vita red ocean style.  For example, they cut the price by $80 within the first year.  That is the sort of thing a red ocean product does to compete.  Nintendo was not following the Blue Ocean strategy with the 3DS, so much as they were simply creating a monopoly by defeating the competition.  Blue Ocean Strategy is about making the competition irrelevant.  That is not what Nintendo did.  They fought them and beat them and the 3DS wasn't terribly profitable as a result.  But now Nintendo has a monopoly on the handheld market with the Switch.  That still is not the Blue Ocean Strategy.

And when I talk about games I look at which ones seem to be appealing to unorthodox customers.  That gives an indication about how well the Switch as a whole is doing as a potential Blue Ocean product.  Some of Wii's biggest games were Wii Sports, Wii Fit and New Super Mario Bros., and the DS had Nintendogs, Brain Age and (also) New Super Mario Bros.  All of these games were appealing to new or underrepresented customers at the time.  Meanwhile Switch's best selling games are Mario Kart, Smash Bros, Mario Odyssey, Zelda, and soon Pokemon will join that top tier list.  All of these games are the type that appeal to core gamers.  None of the most popular games are trying to reach new or under-represented customers.  The closest game that actually does this is Ring Fit Adventure, which is not one of Switch's top tier games.

So Switch is not a blue ocean product, but not from want of trying.  Nintendo has been trying to follow this strategy with games I mentioned in my last post: Labo, 1-2 Switch, Arms, Pokemon Go and Ring Fit Adventure.  These games are not really exciting the market with the possible exception of the last one.  But Switch is still successful in spite of that.  It's success comes from it being a disruptive product rather than a blue ocean one.  It is the crappy handheld market that is moving up market and invading the space of the home console market.

I'd say the Switch is a textbook example of a blue ocean product. It created its own demand rather than fought with others over existing demand.

This might be an example of us having to wait and see who is right.  I never thought Switch would affect PS4 and XB1 sales.  I do think it will affect PS5 and Series X sales instead.  Specifically I think the latter two systems will sell slow out of the gate and peak later much like PS3 and XBox360.  If that is what happens with the coming 2 systems then I am right.  If they sell great while Switch sells great then you are right.

The DS is what I would call a textbook example of a blue ocean product.  It sold great and the PSP sold really well at the same time.  Total handheld sales during generation 7 were incredibly higher than either generation 6 or 8.  The DS grew the market (temporarily unfortunately) and the competition still did quite well, because they weren't really competing.

Last edited by The_Liquid_Laser - on 11 January 2020