This guy is just an average fanboy with an above average IQ.

Hey why did his latest blog posts dissapear?

KungKras said: Hey why did his latest blog posts dissapear?

clear your cache

Email: viral marketers going insane Loved the 3DS announcement. viral marketers scrambling to protect the massive push towards getting everyone to buy new 3DTV’s with dorky glasses from a cheap handheld doing the same thing without the glasses, at once undercutting the price massively and making the glasses-required 3D look outdated. Over the span of a few hours the message went from “it’s not really 3D” to “you’ll have to cross your eyes like Magic Eye” to “it’ll just use the camera to trick you into thinking it’s 3D” to “this will just make 3DTV more accepted more quickly” then finally to random outright fabricated stuff like “the graphics won’t even be any better” and my personal favorite, “the cart sizes will be too small”. Personally my initial reaction was more “sounds pretty cool….what else is there to it?” and immediately thought about what kind of new gameplay integration/interface they’d be putting in. Your comparison to the initial DS reveal strategy seems pretty spot on, imo – we’ll see Sony show off PSP2 with 3D and multi-touch or something and then a few hours later Nintendo will show off something crazy (someone dug up a weird patent on a force-feedback stylus that would vibrate at the edges of the 3d projected object much like the Wii remote does when pointing at a button, could have potential I guess). Anyway I figured you’d be getting the same kind of amusement watching the industry grunts running around like crazy just because Nintendo posted a three paragraph PDF to their website! It amazes me how many people cannot see what is going on. It is clear to me, it is clear to you, but other people just cannot see it. We know the viral marketers see it for what it is (as well as Sony). Since the Wii, there have been many myths made about Nintendo. Most people don’t even bother looking at the business side of the company but just wrap it up into a little phrase. For example, one constant refrain is “Nintendo loves making money.” And what company doesn’t? All those Scrooge McDuck jokes only ended up puffing up the myth. Nintendo has billions of dollars in a warchest. They aren’t hurting financially. So when something happens where the DS successor is announced prior to the DS XL even launching, people become perplexed. Why would Nintendo sabotage their money making potential? It is perplexing only because people believe Nintendo is guided only by money making potential. If Nintendo has a choice of further destroying a competitor at the cost of harming a new handheld hardware iteration, Nintendo will do the former. It is in the long term interest to do so. Much of the ‘Industry’ cheering the 3DS only does so because they think Nintendo is jumping onto the ‘3d movement’ bandwagon. These people are going to be disappointed. I expect Nintendo to use the 3DS to target the low end. All these ‘3d movement’ bandwagon people are obsessed about the high end. In other words, the 3DS is not going to be about Gamecube type games. It is going to be more low end stuff as has occurred with the DS and Wii. It is fun to watch Sony making gaffes and analysts being confused. It reminds me of prior to the Wii and DS being launched. Good times…

 

Iwata had no formal business education And this places him as a perfect disruptor. The entire disruption literature is based on that what is taught in business schools is wrong, that many executives make rational choices taught in schools that end up only destroying their business. This story is from a year ago. But it is very revealing. He seems more relaxed than any CEO I’ve met, but then he has good reason to. When he took over the reins at Nintendo in 2002, the company reported 65.7bn yen (then £350 million) in profit, a disappointing figure blamed on poor console sales and a feeling that the video game “fad” had run its course. By this year, that figure had risen almost tenfold, to 555bn yen (£3.7bn at today’s rates). Not bad for a man with no formal business training. “I was originally an engineer,” he tells me, “and I joined a small company called HAL after university… In 1992, HAL was facing a financial crisis, and I was appointed president in order to help reconstruct it. At that time I was completely unable to read financial statements. I was a game developer. So I was forced to study the financial aspects of running a company.” Having turned HAL around, with the help of Nintendo, Iwata felt honour-bound to repay Yamauchi when the latter offered him the chance to become Nintendo’s youngest board member in 2000. “Of course, I never imagined that I would become president,” he recalls with another of his smiles. There are many great quotes in this story. Such as this: “However, when we started to announce our basic strategy, a lot of people questioned it. ‘Games are for kids and young men. Not for women or senior citizens.’ If you accept that mindset, you will never see customers outside that customer base. So I said let’s do it without that mindset. This is why I raise hell when people begin referring to the Expanded Audience as ‘casuals’. When you say that, you are already adopting a mindset that these ‘casuals’ are retarded gamers. And this will cause a game developer to make substandard games. And then they wonder why their games won’t sell. Gamers demand premium content. So do non-gamers. Just because someone isn’t a veteran gamer doesn’t mean their standards of quality is any lower. When asked about the motion control announcements at E3 2009, Iwata responded with: “To tell the truth,” Iwata says, “I expected them to come up with stuff like this last year. So in my mind they’re later than expected.” He pauses, then opens his arms outstretched, with a huge grin on his face. “I’d like to say to them, ‘Welcome to the motion-control world!’ Later than expected! This is what I thought as well. I thought E3 2008 was when they would come out with their controls. It also shows that Motion Plus was truly a pre-emptive response to any motion controls Sony and Microsoft would show off.

 

Gameindustry.biz gets the context wrong Check out this story from gameindustry.biz. For some reason, the reporter decides to put in his interpretation and gets it all wrong. Despite the dissatisfaction voiced by both of Nintendo’s most prominent executives the volume of new titles has not obviously increased in 2010, with the first major first party AAA title – in the form of Super Mario Galaxy 2 – not due until May in North America and June in Europe. Here are the Iwata and Miyamoto quotes: Speaking to financial website The Economist, apparently before the announcements of the 3DS, Miyamoto was asked how he interpreted the general slowdown in sales for videogames in 2009. He suggested that “any entertainment products are less susceptible to changes in the economy”, but admitted that Nintendo had not produced enough fun products during 2009. This admission echoes comments made by Nintendo CEO Satoru Iwata last October, when he stated that “we were unable to continually release strong software” during 2009. Iwata and Miyamoto were not referring to volume of software. Volume of software doesn’t matter if the quality isn’t good, if people do not find it fun. Games like Wii Music were not fun which is why Nintendo discontinued the title. Nintendo had adopted a strategy shift toward ‘User Generated Content’ in 2008 which led to not-fun software released in 2008 that led to 2009’s decline. If strong software was released, there would not have been a 2009 decline. This is what Miyamoto was saying. When Mario 5 came out, Wii sales rocketed up. So clearly the decline was due to some bad software, not due to other events. It amazes me that business websites and analysts are all not mentioning the User Generated Content direction Nintendo took. How could they have missed it? It was spoken as a holy grail by the executives and at the investor question and answer sessions. What has amazed me concerning the business of video games is that no one seems interested in reporting what Nintendo does. What happens instead is that they report what they think Nintendo does. So when the Wii launched, instead of getting stories about disruption or Blue Ocean Strategy (well, we only got a few there), we got a bunch of garbage about ‘casual gamez LOL’ and discussion that Wii sold only because it was cheaper than the HD Twins. Instead of reported that Nintendo was, indeed, going on their User Generated Content adventure which led to software that consumers didn’t like which lead to hardware decline in sales, we get garbage about ‘casual bubble bursting’. There is no business reporting concerning Nintendo. All we get is cliches and nonsense on stilts. I suppose with 3DS, instead of getting the story of Nintendo disrupting Sony’s attempts of going 3d, we will get stories instead of Nintendo copying Sony and Nintendo jumping on the bandwagon of 3d. Nintendo’s business should not have to be a secret known to everyone!

"Gaming was so much more fun and magical before the existence of the ‘Industry’. Come to think of it, gaming really began to go on a downhill slide after the 16-bit generation when Sony entered the stage. And the more Sony is in decline, the more and more fun games are becoming again."

Ohhh no he di'int! Man the Sony fans are gonna be calling for his head after Malstrom's latest few entries.

I don't agree with him fully on that statement, and I think Sony actually makes some great games, but I guess after being on this site (and previously frequenting gamepro.com) where everybody seems to be collevtively kissing Sony's ass day in and day out, it's refreshing to hear someone bring them down a peg for once.

So Malstrom thinks the same about the 3DS - that Nintendo is going to go after Sony's market with this one. He also said Nintendo would use 3D as a chance for lower-tier customers to get into gaming. And I think so too. (I even made a thread about that, which nobody read hehe )
It's interesting that he said they'll go after Sony's PS3 market. It seems rather obvious but so far all we know is that the thing can do 3D so I don't want to speculate on that one yet (although the first thing that comes to mind when you think of 3D is the Playstation 3 at this point).

This could be really interesting. Was Nintendo ever that agressive? I'm really looking forward to E3 now to see what they have up their sleeves. And when will Koller get it?

Are Nintendo moves since last Autumn cut aggressive or defensive?

But let's read again what Malstrom wrote about price cuts before Nintendo itself did one:

 

@ Alby (the things you wrote, not the quotes): But that's not how disrupting a market works. Nintendo and Sony are still in the very same market it's just that Nintendo caters to low demanding consumers and Sony caters to high demanding consumers. Just because you aim your product at consumers with different values doesn't mean you're in a new market! Ferrari and Toyota are also in the same market, even though Ferrari clearly caters to higher demanding consumers who are willing to pay premium prices.

What strikes me as odd is that everyone here (including Malstrom?) seems to think "moving upmarket" means using the very same product and let it do different things. No, it doesn't! Moving upmarket is caused by using new technology to support the new values you brought to the market. It does not mean keeping the same technology forever. What's way more important than the disruptive product is the values behind it! Two companies can use the same technology but put it into a new context of use.

Somehow everybody assumes Nintendo will just "move upmarket" with the Wii. But they can't do that so easily. You can't just pump out two Zelda games and a Metroid and then they've "moved upmarket". Moving upmarket does not mean returning to the old values used by your competitor. You have to convert people to your new values. And that often happens by improving your technology or let your products be enhanced by using new technology and use it in the context of use you've envisioned for it.

Context of use is very important here. When Christensen talks about these wars ending abruptly people go "yeah, when Nintendo releases XY game they do that because they're moving upmarket." But this is just the software. When Nintendo releases a new console that will be the moment for them to move upmarket. And if it works the console war will suddenly end. Not because all those "hardcore gamers" are buying the Wii now but because those people see the next Nintendo console and say: "I always thought this new kind of gaming was only for casual gamers! But it isn't, it is also for me!" And Sony can't stop that by adding motion controls. They have to adapt to the value change. 

Christensen also says incumbents don't notice the disruption until it is too late. Sony doesn't notice it at all. Most of the people on these forums don't notice it, either. Alby, your post is the prove here. You say "yeah but it doesn't affect Sony at all!" Exactly, it doesn't affect them yet. But if Nintendo releases a new console that is also aimed at converting the "hardcore" gamers people will notice. Funny enough it would be too late by then because they couldn't see it coming as Playstation sales didn't suffer up to a certain point.

I think Malstrom is actually doing a mistake, too. He's looking at a single console cycle and somehow acting like the whole thing would take place in just a single cycle. When the PS3 sold way worse than the PS2 Malstrom said "See? They say the market is fine. This is exactly what Christensen said, they don't see they are in trouble!" But they did see the bad sales, it's just that no company goes out and says "yay, we're screwed! Stop buying our products!" And now he acts like PS3 sales didn't increase, even though they increased dramatically. Back in 2007-2008 the gaming press also did see the bad sales, why else did they publish so many "Nintendo is doomed!" articles. But right now, they see the numbers, they see the Wii is not outselling the competition by that much anymore and they see the PS3 and Xbox360 are selling better than ever and they go: "This time the Wii is really doomed!" And this time they really think they're right - two years ago it was just wishful thinking.

My point is: I think Malstrom was two years too early. Now is the time people really don't see it happening. They won't see it until all of a sudden Nintendo releases the 3DS and people are like "Hey wait. There's something wrong here..." They were so scared Nintendo would "move upmarket" with the Wii and now they feel so reliefed because Nintendo hasn't. And when the 3DS releases eeryone will go "Woah! Where did that one come from?"

I really hope Nintendo is going for that direction. And I really hope Sony will realize it early. That would be the best business fight ever.

Sorry Alby, but you forget a few facts, first off Malstrom is still on the outside looking in, so as information changes, so does the understanding of events, seeing the 3DS does reveal a new aspect to Nintendo's plans and casts new light on Nintendo's moves of the past few years.

Also once again, disruptions take years, even decades, so saying that Sony has halted the disruption is stupid, because its still going on, the Move and 3DS are the next phases in the disruption. So saying that the PS3 sales haven't been affected, is shortsighted of you, although considering what you've stated in the past its not unexpected from you, you do seem to be a shortsighted person, who doesn't really understand business and market forces.

This disruption will probably run its course over the next decade or so, so one or two more cycles

UncleScrooge said: @ Alby (the things you wrote, not the quotes): But that's not how disrupting a market works. Nintendo and Sony are still in the very same market it's just that Nintendo caters to low demanding consumers and Sony caters to high demanding consumers. Just because you aim your product at consumers with different values doesn't mean you're in a new market! Ferrari and Toyota are also in the same market, even though Ferrari clearly caters to higher demanding consumers who are willing to pay premium prices. 1. What strikes me as odd is that everyone here (including Malstrom?) seems to think "moving upmarket" means using the very same product and let it do different things. No, it doesn't! Moving upmarket is caused by using new technology to support the new values you brought to the market. It does not mean keeping the same technology forever. What's way more important than the disruptive product is the values behind it! Two companies can use the same technology but put it into a new context of use. 2. Somehow everybody assumes Nintendo will just "move upmarket" with the Wii. But they can't do that so easily. You can't just pump out two Zelda games and a Metroid and then they've "moved upmarket". Moving upmarket does not mean returning to the old values used by your competitor. You have to convert people to your new values. And that often happens by improving your technology or let your products be enhanced by using new technology and use it in the context of use you've envisioned for it. 3. Context of use is very important here. When Christensen talks about these wars ending abruptly people go "yeah, when Nintendo releases XY game they do that because they're moving upmarket." But this is just the software. When Nintendo releases a new console that will be the moment for them to move upmarket. And if it works the console war will suddenly end. Not because all those "hardcore gamers" are buying the Wii now but because those people see the next Nintendo console and say: "I always thought this new kind of gaming was only for casual gamers! But it isn't, it is also for me!" And Sony can't stop that by adding motion controls. They have to adapt to the value change.  4. Christensen also says incumbents don't notice the disruption until it is too late. Sony doesn't notice it at all. Most of the people on these forums don't notice it, either. Alby, your post is the prove here. You say "yeah but it doesn't affect Sony at all!" Exactly, it doesn't affect them yet. But if Nintendo releases a new console that is also aimed at converting the "hardcore" gamers people will notice. Funny enough it would be too late by then because they couldn't see it coming as Playstation sales didn't suffer up to a certain point. 5. I think Malstrom is actually doing a mistake, too. He's looking at a single console cycle and somehow acting like the whole thing would take place in just a single cycle. When the PS3 sold way worse than the PS2 Malstrom said "See? They say the market is fine. This is exactly what Christensen said, they don't see they are in trouble!" But they did see the bad sales, it's just that no company goes out and says "yay, we're screwed! Stop buying our products!" And now he acts like PS3 sales didn't increase, even though they increased dramatically. Back in 2007-2008 the gaming press also did see the bad sales, why else did they publish so many "Nintendo is doomed!" articles. But right now, they see the numbers, they see the Wii is not outselling the competition by that much anymore and they see the PS3 and Xbox360 are selling better than ever and they go: "This time the Wii is really doomed!" And this time they really think they're right - two years ago it was just wishful thinking. 6. My point is: I think Malstrom was two years too early. Now is the time people really don't see it happening. They won't see it until all of a sudden Nintendo releases the 3DS and people are like "Hey wait. There's something wrong here..." They were so scared Nintendo would "move upmarket" with the Wii and now they feel so reliefed because Nintendo hasn't. And when the 3DS releases eeryone will go "Woah! Where did that one come from?" 7. I really hope Nintendo is going for that direction. And I really hope Sony will realize it early. That would be the best business fight ever.

Actually Toyota and Ferrari are really in favour of my argument, they both build car, both using high-tech, and Toyota has also some high performance models, but their values and markets couldn't be more different and less interchangeable. But I agree on your points 1, 2, 3 and 5, and about 4 too in part, here my point was more about Malstrom suddenly switching from saying price cuts are some rotten filth to praising the Wii's one as a mighty weapon against Sony.

Sony must react, but it's still too early to say it's doing it in the wrong way, the short term situation is that PS3 demand is even occasionally causing shortages, for the middle and long term we still have to see how good or bad Move and its games will actually be and we don't know anything about PS4. And we don't know very much about 3DS either. We know that 3DS disrupting Sony portables, home consoles and 3DTVs all at once is most probably just Malstrom's wet dream, but we can also imagine that early 3DTV attempts will range from barely meh to failure (so the worst enemy for Sony could be its own eccessive ambition and greed about its 1st gen 3DTV). And there is another important thing: being disruptive with Wii doesn't guarantee Nintendo it will be with its next products too, you can't just say "I'll be disruptive" and become so, what's worse, after two products so incredibly successful as Wii and DS, it can be a problem to ask oneself "what next"? Wii and DS success, in the worst case, could be the one true ring that corrupts top execs and shareholders and makes them become conservative and incumbent.

Anyhow, we can also imagine that Nintendo will do its best with 3DS and Wii2 and that Sony knows it and that it learned that making a new console that's basically just more powerful and better equipped than the previous one doesn't work anymore. So about point 6 and all in the other points about what Nintendo and Sony will do beyond the very short term, there are still a lot of unknown things, we know they'll both try hard, we don't know whether they'll succeed. And then there is MS. Three big players make a game more complex than a simple clash between two giants.

And then there are 3rd party developers: they could love one thing about Move and Natal, not having to compete with Nintendo, so they could help them.

About point 7, totally agree, it would be not only interesting to see, but the best we can hope for as gamers.