I haven't read all the replies, so it might have come up:
" While the Gameboy was an evolution of the Game and Watch, it would be appropriate to describe the Gameboy as the initial disruptor since Game and Watch wasn’t as widespread outside Japan. The Gameboy fit the disruptor description well. It was definitely a crummy product for non-consumers. It was, in every way, inferior to the NES. However, it brought values to it that the NES did not have: it was portable.
“But Malstrom!” you say. “Are you saying that the Gameboy was disrupting the NES, that Nintendo was disrupting itself? Are you insane?”
The correct action for a disruptor is to follow-up previous disruption with another disruptive product to cannibalize their business. Had console gaming remained forever in the 8-bit generation, it is obvious that Gameboy would have disrupted consoles as its mobile technology improved. Instead, console gaming moved upmarket and handhelds have always been a couple of generations behind.
While competitor consoles are the obvious reason for Nintendo moving upmarket (to 16-bit, to 64-bit, and so on), the bigger problem is Gameboy cannibalizing the console market. In the future, this will become a problem for Sony with their handheld. The point is that the handheld business forced Nintendo to keep moving its console to the upmarket (or else risk it becoming gobbled up by the improving Gameboy). Nintendo’s solution was innovative: the DS turned Gameboy into a product that does not resemble a portable console for there are two screens and a touch pad (which cannot easily be put on consoles). This would later allow Nintendo to create a disruptive console without risk of its handheld equivalent eating it up."
- Disruptive Storm, by Sean Malstrom