1) I'm not sure I get what you meant. Sustained innovation is a challenge for Nintendo, right?

2) What you describied isn't an incumbent, it's merely a company that overshoots it's customer, thus creating conditions for disruption, but incumbent (hence original meaning of the word in latin) born when there's a disruptor and vice-versa. In other words, when company aware of a competitive company (though may underestimate it), it acts accordingly (fight or flight), thus became incumbent merely due to it's behaviour/business decisions. In layman's terms, you can't define black without white and vice-versa. Back to initial point - Nintendo isn't an incumbent right now. You probably misused the term, rightfully implying  that there're some threats to Nintendo as a business.

You do not understand disruption.

Nintendo is not the incumbent. The incumbent is the market leaders of sustaining innovations. They control the market. The disruptor is the one with the disruptive innovation who plans to cut up market and take over the makret. Nintendo's goal, as a disruptor, is to make Sony and Microsoft gone.

Nintendo can very well hurt the HD twins by taking away customers from Sony and Microsoft. Motion Plus was announced before Microsoft's conferese. Reggie talking a lot about attacking at E3 09. Zelda will be a key to moving upmarket. But ask yourself: Why are Sony and Microsoft making motion controls. They had no interest in the new market before, what makes you think they want to make inroads now. They really don't, but they have to stop Nintendo or Nintendo will take over their market. Heck, Speilberg's speach at E3 09 during Microsoft's conference was ver batem, the same as Reggie's in 06.

In other words, Nintendo is making the Wii remote better and making more indepth games which will take customers some Sony and Microsoft. These customers don't like the standard Wii Remote, but they may like motion plus as it is better, and closer to their demand (the higher the tier, the more demanding the consumer). Nintendo will make deeper games based on the new values (feel over sight) and will make inroads upstream.

And, I'll write it again: next gen nothing can grant Nintendo will be able to release something with the same disruptive potential of Wii, surrendering to Wii2/Zii/Whatever without fighting and before even knowing what it will be and whether it will be successful or not doesn't make sense at all, it's just the wet dream of Sony and MS haters. And maybe of Steve Jobs.

This paragraph makes no sesne. You never say why Nintendo can not release a disruptive console again. Why can't they? Why would they make a Wii 2? It makes no sense and you never say why.

Remember this: So long as Nintendo is disrupting, the end result will be the same and Sony and Microsoft will be made gone. This is why they have motion controls. To fight Nintendo. But usually, it is the disruptor (Nintendo) who will win. E3 2010 is the turning point of the industry. Either they stop Nintendo now or Nintendo will goar them.

So Alby has no idea of what he is talking about, but mai gets it. He has been right so far.

The important point Pachter is making is that the Wii is unable to address the entirety of the market. Thats the significant point right there which has prevented the Wii from aquiring > 50% of the market. So whilst it was able to serve many of the underserved/unserved non consumers of the market it failed to address the needs of the entirety of the market and at that it failed to serve the majority of the existing gaming market either if you consider the fact that a proportion of the current Wii userbase is new to gaming.

True, as has been mentioned above they're likely to target this portion of the market next gen. At least I believe so.

There're not much choice though, either you move up or down on consumer pyramid (or fight against non-consumers). Some known essential characteristics of Nintendo business model will pervent them from moving really down (especially competing with such extremes as free or very, very cheap games like found in AppStore), so their expansion is to move upmarket.

1) Not sustaining innovation, that's totally feasible, the challenge is living up to Wii's might too. It's analogous to Sony trying to live up to PS2 with PS3, like it did successfully from PSOne to PS2, failing (although in PSOne -> PS2 -> PS3 case the scenario was evolutive, not disruptive) or like MS trying to repeat XP success with Vista (OK, we are both sure Nintendo will do a lot better with Zii than MS with Vista, and that, unlike Sony, it will keep costs under control, the analogy is only in PS2, XP and Wii's immense success and reputation).

2) The incumbent may cause the rise of a disruptor, but is not defined by it, while OTOH the disruptor rise when the incumbent exists. The concept of incumbent was already defined before Christrensen's theories and is used also in antitrust issues, for example. And the incumbent doesn't become so when it acknowledges the beginning of a disruptor's rise, it becomes so before, as you said also just reacting to competitors, that aren't necessarily disruptors. Incumbent's concept is wider than the particular meaning Christensen uses. Nintendo currently is still disruptive with 3DS and its portable market strategies, but has become more conservative in the home console market: yes I'm exaggerating saying it has already switched from simple leader to incumbent, but the risk is there, Nintendo already switched to incumbent behaviour in the past, before becoming again disruptive with DS and Wii.

Casual games as you say.

Not.

I understand disruption, but I don't adore it like a divinity.

And I must not prove Nintendo won't be disruptive a second time in a row because I just didn't state that, can't you read? I just wrote that nothing can grant it, it's quite different. Giving to my words a wrong meaning to prove your point proves yourself wrong, not me.

Usually the disruptor wins. Usually doesn't equal unerringly. And even this high likelyhood needs the disruptor to keep on devising and following the right strategies (and developing and releasing the right products!) to be achieved.

So there are still a lot of doubts. And E3 2010 will remove a lot of them, but not them all.

I don't believe theres any reason why they cannot move in both directions at once with the next generation of consoles. The important point that has to be stated is that they key component to moving in either direction is providing value and cutting the price is only one tool to do that.

Their next console can easily move in both directions at once. They just need to do roughly three relatively obvious things to do so.

1. Increased performance to levels in line with the market expectations. This shouldn't be too hard as they can use off the shelf Fusion parts from AMD for instance which will offer both lower power and higher performance charactaristics which ought to ensure that they can get the full range of current and future generation software from third parties.

2. Further refinements of the key interface technologies. Anything which makes the Wii easier to use or more intuitive or enables improved gameplay possibilities.

3. Embrace the possibilities of the download market, internet, streaming and take a leaf out of Apples book and implement not only a game store but an application store as well. Im sure there would be far fewer hacking attempts if they simply let people make applications for their consoles without resorting to hacking.

Essentially they need to iterate further on basic computing technologies, innovate key improvements in keeping their control system a step ahead of the competition and expand by vastly increasing the possibilities of their system. In a closed console world, openness in itself is once again disruption. I wonder if they dare embrace it?

Tetris  a damn card game, DS has touch screen, which is what sells the DS, not Nintendogs nor Imagen babiez.

Nintendo WILL Release a Wii HD eventually, it may not come out for another 4-5 years but its coming. Its would be stupid for Nintendo to abandon the Wii name, which is the best selling Nintendo console EVER. They are gonna name it the Wii HD and there gonna sell it, so that casuals and hardcores can buy it.

Tetris, A card game?  Ok, sure.  I remember tetris as a block game, but continue to build your fantasy.  Anyway, your statement was that casual games don't outsell hardcore, only with motion controls do they and if you look up the sales figures on Nintendogs, Brain Age, and Tetris, I think you'll find exceptions to your absolute rule.

I did not say Nintendo would never release a Wii HD, nor abandon the Wii name.  Patcher kept predicting the Wii within a year or two, and that's been for a long time that he's been predicting it.  Nintendo has flatly stated that they haven't even opened all of the doors on the Wii and they won't be releasing a new console until they can no longer write the games they want to write.  When the technology can no longer cover their requirements, they'll go with a new console.  HD is not yet a requirement for Nintendo to build outstanding games.