Nintendo broke away from competition with Sony and, new arrival, Microsoft with what some call the “Blue Ocean” business strategy. The Blue Ocean strategy is the metaphor of leaving a “red ocean” (one dyed by the blood of competition) for unclaimed waters filled with the potential for creating new demand. From a business stand point this brave (or stupid) move has paid off and now Xbox 360 and Playstation 3 are competing for second place.

Nintendo managed to succeed because they did something more than incrementally improve and repurpose old features. Yes, Gentle Reader, I’m talking about the “I” word, innovation. It’s debatable if the Wii controller is a true innovation as some gamers will still belittle it and mock it, but from a business standpoint it’s a successful change that’s brought in tremendous profit. Nintendo is as guilty as everyone else of giving us sequels by the truck load, most games in each series offer something new every one or two games. In truth, sequels are not really a bad thing as long as they are different enough that it stands on its own or adds to the previous experience. (continue reading…)