PlayStation: Hirai - Casual Gamers are Fickle

Sheesh, if you say the casual gamer is fickle and always looks for the next big thing...the hardcore gamer is even worse! The casual gamer is a less demanding customer then the hardcore gamer. Everything the hardcore gamer is, the casual gamer is but at a lesser basic degree, the reverse is also true.

And Nintendo actually aims at Core-gamers, but not core-gamers as defined by hardcore gamers (aka themselves) but defined by the disruption theory. The Core-gamer is then the mainstreamgamer, the biggest bulk of customers out there, it's that huge gray area between non-gamer and hardcore gamer. So following Hirai's logic, Nintendo is doing just fine, it has just "left out" (not really, it's just reinventing it) the niche of hardcore gamers (which Hirai is defining as the actual core-gamer).

What he's saying is that casuals will move on to stuff that's not gaming. Core or hardcore or gamers or whetever will stay with gaming, so don't piss them off. Look after your gamer market because they'll still be here when the casuals have gone back to hoola hoops, reality tv or reading books.

So i'm geussing you have never read a book, saw tv or did one hoola hoop in your life. No gamers are not human, they're robots programmed to only and exclusively game. Gamers don't get to choose at all...fantastic.

That's not how I read what DrkStr said. He appears to be saying that "casual" gamers are more likely to leave gaming behind altogether and never come back to it.

Of course being a "gamer" doesn't prevent you from reading a book or whatnot. It's just that if you are a "gamer" you'll play games almost no matter what.

I think he's got a point, the current upswell in gaming is due almost entirely to the Wii and its popularity to previously non-gaming people. What's to say that they won't become non-gaming people again?

If they do stop playing games, then Nintendo are royally screwed. They've pissed off a large percentage of their previous "hardcore" fans to concentrate on the "casual" market. If that last lot leave gaming altogether, or even if a percentage of them do, Nintendo's sales figures are going to drop like a stone.

I kinda geussed he meant that, but actual gamers are equal eager to leave gaming if doesn't interest them anymore or they don't have the time anymore for it. I know a few guys (indeed not at all representative, i know ^^) that would have quit gaming a couple of years ago if it was not for the Wii.


You're forgetting two key-concepts in Nintendo's strategy.
1) Nintendo is the one out of the three console makers that practically owns 70-90% of the children market (not counting casual gaming on the PC/laptops and so forth). Nintendo is literally breeding a new Wii-generation, just like it did in the NES-era. However, it does remain to be seen how Nintendo pulls of to keep them hooked on their consoles when these kids hit teenagery.
2) Nintendo's Wii and DS is actually also aimed at the older gamers who thaught about stopping gaming or who actually stopped gaming althogether at some point (this is mostly the Atari generation filled up with good chunks of 8-bit and 16-bit gamers) because of the re-use of videoarcade principles the Wii is built around. A good book that illustrates that these "retired" gamers exist in droves and haven't been catered too since is Joystick Nation from 1997.

But the real thing what bothered me about his remark was, so? What if all those casual gamers leave, that's their choose, it means videogaming has ceased to be able to attract them. If an industry can't attract customers anymore, then it is only logical companies will go bankrupt and so forth. The thing is, if you keep concentrating on your hardcore audience first (which is not the coregamer, coregamer=mainstream gamer, the medium demanding one), your industry will go down either way. It will keep making more expensive products for a stagnant to shrinking audience.

So Nintendo pissed of a number of their hardcore fans. That was to be expected if you're going to apply a disruption strategie where you aim for the least demanding layers and leave the highest demanding ones (for the time being) to the competitors to knock each other out for. Then, trough sustaining innovations of your own you will attack these high-demanding layers again, but not to the old rules, but your own new rules. That's what Wii Motion Plus is for and the games around it. And don't bring up Natal or the PS3 wands, Sony and MS are now really living on borrowed time. Wii Motion Plus is out now, with games (in the US), Nintendo is attacking now. What would be a good defense? Sony saying God of War 3...going to use PS3 wands and also doing it. MS...wel, they first have to prove Natal actually existing and not being one of their smoke and mirrors tactics.

Really, this is based on the disgusting premise that hardcore gamers are the complete opposite of casual gamers for no reason at all. They're not opposites, they're on either side of the same scale. Yeah, the hardcore will never quit gaming so ofcourse the casual ones will quit it at a whim, wrong, huge parts of the 2D-generations left (the older the higher the chance they left). Nintendo brought them back and made them their new core (core =/= hardcore, the core gamer or customer is the mainstreamgamer, the biggest bulk of gamers, hardcore gamers are a small high-demanding niche that happens to be very vey loud trough intensive use of the internet)

See, I'm saying (and I assume Kaz and DrkStr are too) that "hardcore gamers" are less likely to leave gaming than "casual gamers". It's a last in, first out type of thing.

For comparison, I've been hill/mountain walking over the last year or so and I'd consider myself semi-casual. I'm not a serious "must do it every weekend" type of person, but I can read a map, use a compass, etc and I've been up Ben Nevis.

However, the UK has seen a huge increase in people walking recently due to a very popular series of TV programs that highlighted walking by re-enacting walks in a semi-famous book. Now there are loads of people who think you can do these walks in half an hour, because that's how long the program was.

These guys are "casuals" and will drift away from the hobby again very quickly. If any equipment manufacturer started to concentrate their marketing on these guys, I'd be worried for their long-term prospects. Sure, short term they'll make a packet, but long term? They'd better have a back-up strategy.


Of course, but by marketing to people who are most likely only in the hobby for the short term will not give you long-term prospects. If by doing so you alienate your long-term market, you're going to end up worse off than when you started.

Your long-term market will move to your competitors and you'll end up with your customer base being composed entirely of people who are most likely to leave the market entirely.


The new gamers that Nintendo have found either never gamed before in which case they may find it's not for them long-term, or they've already left once, so they'll probably leave again. Of course, both sets will have some that stay, but then as you point out, some of the long-term gamers will leave too, that's likely to balance out.

The market is always in flux, but people who have gamed for a long time are more likely to keep gaming than those that have gamed for a short time. It's just the way hobbies and interests work.

By definition, the new or returning players Nintendo have attracted have been playing for a short length of time compared to those who have been gaming since the days of the NES or Atari, therefore they are more likely to leave. The games that have attracted them are more "casual" games, i.e. ones that can be played for shorter lengths of time.

All this talk of disruptive strategies is fine and well, but we've already agreed that Nintendo weren't ready for the success of the DS or Wii, so I find it hard to believe they understood exactly what they were doing. The problem as I see it is that they have not only been disruptive to the market and their competitors, they've been disruptive to themselves. Instead of branching out into "casual" gaming, they've bet the farm on it and although it's paying off now, they can just as easily lose everything if the casual market decides to leave gaming.

Well, that's why i said that Nintendo has re-used videoarcade principles. That's their strategy. They don't expect people to play like "us", they expect people to play 15-30 minutes to day and by creating constant new content. It's like the music and movie industry or even television, those three haven't suddenly had "casuals" drop out and made the market implode and this is also part of Nintendo's strategy, making the Wii a home for all kinds of games, from niche to mainstream to well...WiiFit ^^. Just like music and movies. Only aiming at the hardcore will make your market implode faster then it will trying to court new customers. I can get your walking metaphore, but gaming is a content driven industry (unless you're going to define walking paths as content...so unless someone can conjure up new continents, walking is doomed defined as an content driven industry). It is driven by how diverse it can create content. The more the better.



The problem is, the hardcore gamer is a really really bad long-term market also. It is highly demanding on both technology and content. These demands result in higher costs while your not really expanding the industry. An comment from Chrome Studio's said it best "sure your sales rise with 10 procent, but the costs haven risen by a factor of two to three". In my thesis about videogame history, i found out that the industry has always balanced on the line of technology and commerce. It managed to survive it trough always expanding into to the male half of the population (going from kids to teenagers, to twenty-somethings and slowly to thirty year olds troughout the generations of consoles). The traditional videogameindustry can't expand any further. older gamers quit and it is considered too competive for females. Where's the future of a non-growing industry with ramping costs? Bankruptcy.

And i think also everyone forgets...this is how every industry starts. It firsts attracts *shock* the casuals! Rock 'n roll attracted new people, not existing music buffs. Spoken movies saved the movieindustry by re-igniting interest with the casual masses, movie-buffs clinged on the silent movie.



That's just it, disruptive products seek out new markets and carve them out using a new set of values and processes. Sound film was a major disruption in the movie-industry and re-ignited movie-going with the masses, special effects with Jaws and Star Wars did the same thing. Gaming with the Wii can be the same. Now i'm not saying that the industry won't know it's highs and lows, but you have to understand, Nintendo doesn't really need the existing hardcore, they're making their own new one (remember, Nintendo pratically holds the children on lock-down, these are the gamers of tommorow), raised on the Wii-principles of gaming. So Nintendo doesn't need the "old" core-players, they're making new ones. And that's how disruptions can take out far bigger established products, by pulling the rug from under them while the big boys stay focused on those "old" hardcore and collapse under mounting costs.

You know why the arcade industry suddenly imploded in the US? Three reasons.
1) they overcalculated the growth
2) homeconsoles disrupted the arcades
3) arcades were hugely cut of from their primary recruiting layer: kids. By what? Pizza Time Theaters with it's midway turn-in-tickets-for-prizes system (and the many clones based on it). Ironic enough, the first commercial succesful arcade, console and Pizza Time Theatre were pushed by the same man: Nolan Bushnell. That guy has a great intuition for creating disruptive concepts.

Also, any company that launches disruptive products never knew what to expect or what they were doing. It is always more of commercial intuition coupled with product-development sense then any kind of marketing. Marketeers are actually next to useless when it comes to disruptive products because these are shots in the dark. But, if you hear what Reggie and Iwata say at E3's or Iwata Talks interviews, they are using disruptive theory terms straight from the books of Prof Christensen. Yes it was a gamble when they launched it, a really big one (disruptive products are alwyas huge shots in the dark because they seek out new markets, markets no information exists on because no one tried seeking these markets out in the past). But after that initial succes, they knew what they are doing.

Understanding the Wii's strategy, you have to know how disruptions work. They create comparative advantages trough a disruptive structure based on disruptive innovations to create higher ease-of-use and lower costs compared with the established product. Then using their own sustaining innovations, they will replace the established product in function.

See that's where my opinion differs with yours, or maybe it's just our definitions that differ. I don't see "hardcore" as "Must have the latest greatest most shiny game and graphics" those guys are a subset of both hardcore and casual gamers in my opinion.

I define hardcore and casual gamers by how they play games.

Hardcore gamers play games because it's their primary hobby, they play intensively. Whether it's WoW, Halo or Patapon, if you play games more than you indulge in other hobbies, you're hardcore in my eyes.

Casual gamers I see as those that play games as one of many hobbies. Maybe they only have a game of FIFA with their mates before going to the pub, maybe they pick up Nintendogs every once in a while, or maybe they play WoW for an hour or so each day.

With those definitions, the hardcore gamer is always looking for more content, but not always the latest greatest games. They may play Blast Factor, Braid, or ever Solitaire, but they play games more than anything else.


See that's what I'd call "mainstream" as opposed to "specialist" or "niche" - those are quite loaded terms these days, but they best describe that division.

Currently, Nintendo are going after the mainstream by targeting the casual players (to use my definitions) and I think that's a bad idea. Sony went after the mainstream in the 90s and early 00s, but they didn't use casual games to do it and they expanded the market hugely, and the market more or less continued to expand using their ideas until Nintendo started the DS/Wii approach.


That's fine in theory, but to be honest, the PlayStation was disruptive, if not a disruptive product since it didn't really do anything new, it was a disruptive marketing campaign. Sony targeted lapsed and non-gamers by appealing to the values that they had grown into.

It was a very successful campaign and it opened up the market, led to the death of Sega and sidelined Nintendo for quite some time. I'd say it was very disruptive.

However, Sony are now suffering. And I believe this is driven by what Kaz was talking about. A lot of the PlayStation generation of gamers were what I call casual gamers. They played few games for short periods of time. Obviously a large proportion of them became what I call hardcore, but the fact remains, Sony got the casual gamers. They've now moved to Nintendo in large numbers - because they are fickle.

Nintendo have also pulled in a lot of new or lapsed gamers, by using casual games. These are also casual gamers, and they're fickle too. They will leave Nintendo and even gaming altogether on a whim, and they won't look back because they aren't invested in Nintendo or gaming.

Just having a disruptive strategy or product doesn't guarantee lifelong dominance of a market. The market can change for many reasons. Furby, Tamagotchi, Cabbage Patch Dolls, Tickle-me Elmo, Pet Rocks, all of these were highly disruptive products that captured the mainstream imagination and huge swathes of market share. However, where are they now?

I think this explains the reason for this debate. I don't know what the correct phase was but somene said that discussions result out of not defining the subject beforehand. The thing is, I also see the hardcore gamer as someone who has gaming as its primary hobby or even lifestyle. Casual are also indeed people who have gaming only as one of their hobbies, not primary. But then you have that huge grey area in between. That's the actual mainstream. The casuals are not the actual mainstream, but they can become it. You can see a mainstream gamer as someone who considers gaming as an important an hobby, but not really primary.


The Playstation wasn't a disruption for SEGA or Nintendo. The Playstation was however the continuition of the console-disruption on PC's (that's why MS joined the console race, it saw it's core bussiness threathened by consoles). The Playstation was just the entrance of an company with more means then Nintendo and SEGA in an established market, and Nintendo and SEGA not being able to cope with it.

There is no such thing as "disruptive marketing campaign" unless someone disrupts marketing as an institute. Disruption theory is actually aimed AGAINST standard marketing practices because they fail more then succeed. People just like to use the "aah it's a marketing thing" to explain disruptions because they don't really understand it. Tamagotchi, Tickle-me-Elmo and consorts are more marketing products then disruptions. LEGO was disruptive, Cabbage Patch dolls, maybe, but the company behind it used the money to burn on bad videogamesystems (i think it was Coleco or something) instead of giving their profitable line some meaningfull sustaining innovations. That's more of an example of having no clear strategy that can kill disruptions internally.

Do not mix up a disruption with a hype-product. Disruptions normally take a time to take off and such, actually ensuring long-term growth, hype-products sell in a huge short-term spike (much like...tadaa...games on the HD-consoles). It's called the Product life cycle theory. It shows that the games on the HD-consoles have selling structures like "fads" while Wii and DS games have the normal gaus-like curve over far more time.

The challenge exists for Nintendo to try to get as many mainstream and hardcore gamers out of all those new casual segments they found while also turning videogaming into a cultural fixture for the general public just like books, music, movies and tv has become (The Playstation just managed to make gaming mainstream within a male 13-30 year old demographic with some experiments into an expanded audience). And it needs to do that by keep churning out interesting, diverse and non-traditional content, just like those four others did (and maybe also drop prices considerly).

Really, if we have to follow this casual= fickle logic, then books, movies and tv should have imploded many times by now. Also these industries need to keep making interesting content supported by sustaining or disruptive innovations to retain the public's interest. They managed this, why think this can't happen with videogames.

So in short: yes the casual are fickle, but you can keep them if you keep churning out content that keeps them interested and move portions of them them into the mainstream and even hardcore (this is how every industry or re-ignited industry had to do it) trough sustaining innovations. Which means these new-gen gamers will start spending more (again, Nintendo holds the kids layer, the primary recruiting base of videogames, Sony and MS are cut off from this in a big way) creating more growth. Calling it impossible is denying the existence of every entertainment industry on the world. Calling it a risk, sure, if the industry doesn't manage to keep the audience interested with new content. Then it just deserves to wither and die.

Ah, again a definition required. When I said "mainstream" I mean the mainstream of society, not of the population of gamers. Gaming is not yet a mainstream activity as far as the rest of society is concerned. Sony and Nintendo have got it quite close to becoming mainstream, but it's still a niche activity.


I'm not familiar with the Christensen theory of Disruptive Technology or Disruptive Innovation, so I'm using the term disruption in it's most basic sense as something that causes a disruption.

To be honest, having read a little into Christensen's theory, I'm hard pushed to classify the Wii as a Disruptive Innovation if the PlayStation wasn't. Sure the Wii as a product is easier to use and slightly lower in price, but the PS1 was backed by processes (marketing and developer relations) that were very different to the existing norm, and in the case of Sony's approach to developer relations, extremely cheaper and easier to work with.


The definition I've found states that "a type of product, service, business model, or other process" can be a disruptive innovation. Surely a marketing campaign or the strategy behind it is a business model? It also states that "a disruptive innovation should minimally cause a market disturbance. Or market disorder or discontinuity in the success and growth of market incumbents" - that sounds like Sony and the PlayStation to me.


Wii games usually have a longer tail than PS3 or 360 ones true, but the games aren't the "disruptive" product, the hardware is and in that case the Wii and 360 have been around for the same length of time. The "hype product" there is the game, not the console and can just as easilly be on the Wii (Red Steel) as opposed to the PS3 (LittleBigPlanet) or the 360 (Gears of War).


I really don't see that at all. I see games on all consoles that flash and burn and games on all consoles that sell forever. Just because Wii Fit and Wii play have sold for a long time, don't say the Wii has a longer term selling curve over all. Those games are often the reason people buy the Wii in the first place (Wii Fit) or are bundled with a controller (Wii Play) that ensures a longer tail because new owners would rather buy a controller with a game than just a controller.


Well, books movies and TV have has much longer than video games in which to mature. TV is the closest analogy to games, and it's been disruptive to movies. However, TV is currently going through an implosion, or at least a large change due to the move away from scripted programs to reality TV ones.

Also, with respect to books, the new JK Rowling book (The Tales of Beedle the Bard) has been nowhere near as successful as the Harry Potter series. Maybe because the fickle, casual readers have grown up and moved over to the Twilight series?


I don't see this either. Nintendo is seen as "kiddy" and "family friendly". In this regard, Nintendo can get left behind by maturing gamers as they wish to play GTA and other "mature" titles that just aren't available on the Wii.

However, Sony has the advantage of their low end systems being gifted to younger gamers as their older siblings upgrade. It happened with the PS1->PS2 transition and it'll be happening to a lesser extent with the move to PS3, really only hampered by price.

To say it simple, according to Christensen, companies exist out of three things. Values who determine what priorities a company makes, processes who determine how a company makes its product and means who determine what a company has. A marketing department and relations with anyone is not a value or a process, it is seen as a means. That's why the Playstation is not seen as a disruption towards SEGA and Nintendo, but is seen as one towards Microsoft. Sony's good third party relations was actually just an continuition of SEGA's policy (sustaining innovation).


marketing is neither a product, service, model or proces in the eyes of the disruption theory (read the Christensen books, he does not use the word marketing in one of them unless to refer to it as an means), it is something a company posesses, that's it. The problem is (not with you but with the description) if in an established market a new competitor arrives with more means then the incumbents, those incumbents will lose out because they can't compete against the bigger means of the new arrival, this "looks" like an disruption, but it isn't. It's just one company trowing more money around in the context of an established market then the other ones. An analog is for example Airbus vs. Boeiing where Airbus, instead of using a disruption (small regional distance planes) they went in full head, but needed huge amounts of money to equal Boeiing means. Sony spent huge amounts of money on the Playstation line (selling it at a loss and so forth), more then SEGA or Nintendo could afford (as far smaller companies), also Nintenod was stupid to keep holding on to cartridges (but that can be explained trough Nintendo's processes which were aimed at innovations in cartridges but became useless when new technology became standard, much like Apple lost because its processes became useless whith the coming of the modular PC structure). Disruptions attack the established market and make a new one built on new values and processes. Sony just trew around more dollars and a bigger marketing campaign and contuining the existing values and processes. There is a big difference if the context is an established market and someone enters by trowing around more money (disruptive companies are 90% of the time new start-ups so don't have the cash to trow around) and an disruptor showing up.


No no, games are a BIG part of the whole disruption behind the Wii. Remember (and you know this), Nintendo is an rare software-hardware hybrid company (which are its processes). It's software (games) are entangled with its hardware in a very deep manner. So the Wiimote, Wii and Wii-games are all supporting elements of each other. You can not analyze one without the others. Wii-games are being designed with the philosphies of the 2D era and the videoarcade era. It's that simplicity design philosophy that makes the Wii-games as much part of the disruption as the Wii-console and Wii-mote. And there is also no way that games cannot be part of it... the videogame-industry is an content-driven industry, not hardware driven. the hardware is just a tool to play the games, the content. The game-industry just happens to not have a standard compared to the other content-driven industries which skews attention more to this tool.


Misunderstanding here, when I brought up those life cycles, i wasn't referring to the hardware, only to the games. Also, I meant that on the HD-consoles the trend or majority of it's games sell like "fads" with a majority of its sales being made in the first short phase. With the Wii and DS games (also third parties) the majority uses the more natural and logical gaus version with it's majority of its sales in a long 2nd phase. HD-games also have this long phase, but hardly the majority of their copies are not sold there. Games that have this slow-burn character are known to be able to attract a much wider demographic because of two things: 1) they're good and 2) word of mouth, the most powerfull and true marketing tool of them all. Also the HD-consoles can have exceptions. It seems Viva Pinata, while only selling 500 000 copies, did that on an slow burning rate much like Wii and DS games. Guitar Hero had that too in the beginning.

And please don't use that "Wii games sell because of pheriphals" logic. It doesn't explain why so many DS-games sold in the same manner or why so many other Wii-games without periphals have the same thing going on (maybe lower in total number, but selling in the same gaus-like manner).


Well, the game-industry is 35 years old (almost 25 if you take in the US-market implosion). The movie-industry was at those ages in the years 1920-1930. This is when Hollywood built it's enormous movie-complexes and around 40-60 million people watched a movie in such place a week in the US alone, able to attract families of all social backgrounds (expect maybe the really elitist bastards). Sorry, really not an argument. The real question should be, why is the gaming industry taking so long to mature compared to other content-driven industries. The answer lies in being primarily focused on young males. That's not a bad thing, it's how the gaming industry survived it's almost self-destructive tension between implementing hightech and commerce untill now (one of my conclusions in my master thesis about videogame history, yeah it's cheating i know ^^ and its in dutch, sorry. I was thinking of translating it in english, but its a hundred pages)


Don't know if the average Harry Potter reader has flipped over to Twilight, could be. Aside that, you're saying my point. One stream of content the people wanted stopped, so they look over somewhere else to fullfill the job the latter fulfilled for them. So the challenge exist for Nintendo to keep making interesting content to keep the audience they have now hooked. Not only Nintendo, everyone in the gaming industry. I don' think the hardcore will stay as well if the content they want stops coming.

Now this whole "Disruptive Innovation" theory seems to make less and less sense to me. It seems to be saying that some things that cause a disruption in a marketplace can't be disruptive because ... well, just "because".

Surely, a new business practice can be disruptive, even if it's just a tweak on an existing practice. A product pricing model can be disruptive, so why not a 3rd party licensing model?

Sony, or even Microsoft, entering the console market caused a disruption. The marketplace was disrupted, companies went out of business, lost market share or were forced to change their business models and product lines to try and compete. How is this not disruptive?

Am I being too literal with respect to the word "disruptive"? Or was the term inappropriately chosen or the theory inappropriately applied to a narrow set of parameters?


A marketing strategy should be the end result of a business practice or a business strategy. Are you saying that neither of these can be disruptive? Or just that their end products can't be?


That seems to be to be a too arbitrary distinction and another vote for the inappropriate use of the word "disruptive". Again, this looks like "it's only disruptive if I say it is" - not you, but Prof Christensen.


I only used the peripheral example to explain why Wii Play continues to sell so well. I was pointing out how one of the two longest selling products on the Wii had artificially inflated and elongated sales. When people point out the long sales curve of Wii games they usually mention Wii Play and Wii Fit, I was just anticipating that and explaining their respective variations from the norm.


I'm not so sure. Cinema gave people something they could not get anywhere else. Plays were one form of entertainment (where the elitist bastards would go :-) but cinema could show you actual places that you'd never be able to visit.

Gaming gives you an experience that, for the most part, is just a twist on other forms of entertainment. It's the interactive movie (or play), it's the digital board game, it's the D&D session where you don't need to imagine.

It has also, until recently, required technical knowledge of the form that most of the population are uncomfortable gaining. It has the mystique of being to do with "technology" which puts people off. Setting up a modern games console requires quite a bit of knowledge of connectors, protocols and standards. There's the differing formats, as you point out, which alienates people that don't care to gain the knowledge to tell apart.


You can't say that the gaming industry has been self-destructive when, even before the Wii, it was fast approaching the earnings of cinema. Whatever was going on in the 90s and early 00s expanded the market hugely, both in reach and in turnover. Only really Sony has suffered due to too much technology in their product recently.


I think you've just proved Kaz' point. That's the very definition of the word "fickle".


I think the hardcore will stay longer than the casual gamers, because of their investment in the hobby, because they have a wider range of "acceptable" content and because the industry already knows how to make that content and can very easily switch back to serving it up exclusively.

Unless they've invested so heavily in content for the casual market that the way back is longer than they can profitable go. That's the warning to Nintendo.

I can understand these doubts because the theory is really really fleshed out. My summary in my thesis is ten pages which is really a summary based on the summary in Christensen's book (around 40-60 pages).
The premises for the theory are:
1) a market is seen as a set layers with each layer having a different degree of demand of quality on a dimension of quality established in the market. In the gaming industry this means casual = less demanding, hardcore= most demanding. But also, the hardcore= a small niche, as does the casuals, the mainstream (medium demanding) are the big bulk of customers and is seen as the core-market.
2) a new type of product starts of first in the lowest layer and trough sustaining innovations adds in quality and moves up the layers which promise more customers and higher profitmargins.
3) Companies start to introduce sustaining innovations at a faster rate then customers can adapt to it, because in the companies logic it means higher profit margins. The risk is, the company is going to "overshoot" the lower market layers and eventually the core-market itself. The product will have "too much" functionality that the average consumer doesn't want to pay for. This opens up the door for a disruption innovations.
4) A disruptive product then introduces itself into the lowest market layer, adding more ease-of-use and a lower price for the customer (very important, the customer is central here, not third parties or anyone else). The disruptive product then creates comparative advantages structure for itself trough those factors and also uses it own sustaining innovations to move up the market with the high chance of pushing the established product and company out of it.
5) A product/service/whatever is bought to fullfill a certain job or function which the customer expects to be fullfilled according to its expectations. Disruptive innovations are most of the time considered inferior compared with established products by established companies, journalists and analysts (the highest demanding ones) but are "good enough" for other, lower layers of the market. This is the Jobs-To-Do Theory and actually goes against traditional marketing theory because it deems it arbritrary, superficial and disconnected from the actual customers trough its use of market segments.
6) disruptive products are made by companies who have an assymetric motivation and an assymetric skill compared to the established companies. These two function as the disruption's shield and sword. The motivation prevents established companies to prioritize to make a disruptive product(the reason quite often is that the profit-margins are too low while sustaining innovations lead to higher ones). The skill is with what the disruption attacks the established companies. In Nintendo's case, it is its unique software-hardware integration. This allows it to make products established companies can't make.
7) a company exist out of values, processes and means. The values allows the company to prioritze means to projects. The processes is how a company creates products from these means and the means is what a company posses from resources to buildings to distribution systems, human resources and also marketing.

The theory focuses on how a product is made by the internal values and processes of a company. Not by what some marketing t**t thinks what should happen. Marketing people actually hate disruptions because disruptions aim at market layers not being serviced by the established companies. So there is no data on these layers because, well, no one sells to them. Disruptions are therefore almost always huge shots in the dark, based on design intuition from product developers. Sony knew very well what the gaming market was and how it could be evolving.

But this is how disruptions works, Christensen has seperate chapters how the established market works when no disruptions attack it. But it boils down to that in a established market, the one with most resources wins. Also when competing products in an established market start to have a lot more shared features then unique ones (in the perception of the market), then price is the only distinguishing feature (you see this the best with Xbox360 vs PS3).

What the Playstation did was knock out SEGA pure on means. SEGA announced Saturn price at 399$, Sony says 299$ but takes a big loss on it. Sony continued SEGA's path of courting more teenage (and twenty-somethings) males into the market (as a trend, yes there are exceptions, but these were not the primary target) trough sustaining innovations (Gran Turismo, emphasising 3D-graphics, use of the CD-format, aiming at more mature content, remember, moving up the market layers) the same with courting third parties. what Sony did was lower the license fee and give a good collection of programming libraries, that's adding to the existing structure, not turning it topsy turvy. Turning it topsy turvy would be saying "our console is 100% open-source, tadaa!". Also, SEGA was internally quite a mess, being financially drained by the SEGA CD and the 32X. Both lost out on Sony's marketingmachine. This was also the worst nightmare for both Nintendo and SEGA that some bigger company would come into their market, because they knew that someone with bigger budgets could screw them down pure on resources.


The strategy behind a product/service can be disruptive though, this is how Dell became so big. It didn't introduce any product-wise disruption but a organisational disruption (selling cheaply put togheter PC's direct too cutomers) and trough it's comparative advantages from that disruption attacked the established market. What was Dell's marketing strategy? He didn't really had one, he assembled PC's in his garage...word of mouth did the rest. Really, word of mouth is a disruption's best friend in a lot of cases. Sticking to the product-strategy is too. Disruptions really benefit from a clear and strictly followed strategy.


I know this is not bussiness, but it is still economics, but it seems like a good metaphore. Why did US win vs Japan but not Vietnam? Japan fought in the same way as the Americans mostly but the US out-produced the Japanese in ships. Yes, also the US had better radars and the Japanese focused a bit too much on huge battleships, it's not like everyone has a carbon copy of the most optimal army. The Sherman was for example a outdated tank-design. The brits immediatly engineered an actual anti-tank gun on the shermans they received and the russians called them coffins for five brothers.
In Vietnam, the US fought the traditional way (bombing everything, twice) while the Vietcong and consorts had barely the same amount of means, but they didn't fought like the americans did. This is also what disruptions do, they do not compete against the established on the established rules, they create their own rules and then attack the established. In a symmetric battle, the one with the most resources wins. This is what happens when Sony entered the game-industry. In an asymmetric war, the one with the most functional innovations wins. This what happens now with the Wii and browser-based gaming. Sony just followed the same path as Nintendo and SEGA only more, because they could afford it. If the Germans could have built 500 Tigers a week...they would have used them far differently compared to the small-unit stopgap methods historically. Again, these are the values of the company to prioritize means to it's product and goal. Sony had a really big marketing department, so they used it. They didn't had a first-party initiative (yet) so they used their means to attract third parties and buy others. The Allies created an joint Allied Command, the Axis didn't. It doesn't change the rules of the game. It really helped, in an existing structure.


Right, no harm then ^^, sorry.


uhu, and who likes techy stuff the most? Boys! ^^ it's our gender guilty pleasure, things with buttons and flashy stuff, preferably to blow other stuff up. It were twenty-somethings male engineers that made gaming and still dominate it. The saying "made by and for" doesn't come more into play then in the game-industry. Not to say the industry hasn't tried to break it. The primitive arcades attracted many kind of people, Pacman and Ms. Pacman were the best sold arcades in the US just because they could also attract girls. Nintendo wanted to launch the NES as an family entertainment package. It got perceived as a child toy (thank you ROB and also Mario really) and NIntendo just ran with it.


That's why i said...almost ^^. A lot of the failed gameconsoles (3DO, Jaguar, Saturn, TurboGrafX) were because they were over-engineered. That's what I meant with the tension. If you go overboard, you die. And really, if the industry keeps going the same traditional road of sustaining innovations then sales will be up 5% but costs will have tripled again. We both know where that leads. It also doesn't bode well for Hollywoods trend of those 150 million + budget movies. On the other side, watching a movie costs 10 bucks, buying a game costs 50 bucks, both industries have equal size, who attracts the biggest audience? Yeah...


Actually, both of these togheter was my original point (was it really? don't know anymore :p). Yes the casuals are fickle, but that's a constant in every industry. The hardcore are also fickle, but to a lesser degree. Casuals and hardcore are not opposites, but on opposite sides on the same scale. From 1985 to the '90's the cartoony platformer ruled the game-industry, now we have the space marine shooting stuff dominance. Maybe I should use that to assume the hardcore are fickle bastards...the real hardcore plays platformers with cute humanoid animals you t**ts! You space marine casuals will destroy gaming! It's a lot more gray-tinted then that, that was my actual point...i think...

Thea and biscuits lad?

Its quite clear that your education and knowledge concerning the United States involvement in Viet Nam and the war with Japan are lacking, as any comparison between the two of the is utterly ludicrous as the only thing the two have in common are fanaticism and east Asia. Also, your assumptions concerning the arcade industry in the United States are equally deficient and incorrect.

I'm assuming you meant "isn't really fleshed out" here?


OK, I can see this. I'm not sure about the terms, but I can take it as a premise.


I disagree almost entirely here. Unless early adopters are less demanding than the casual marketplace? People buying the early consoles were not casual in any way. I see this more as technological progress being applied to the product.

Put it this way; if we had never had a console until 2009 and Nintendo, Sony or whoever made one. Would it be as simple as an Atari 2600? Or a NES? Or a PS1? I'm thinking it'd be at least PS2 quality, more likely PS3/360 level tech.


I can see how this could be observed, but the rationalising behind it seems very general.


If you accept point 2, then this is "just" a new product using the "new market" approach in an existing market.

The rest of the points seem to just be further explanation of the conceptual model, so I'll accept them. Except this, which is your own comment.


Sony can re-make any Wii game with their motion controllers. And none of the current companies is more "established" than Nintendo in the console market.


That's not what I meant by marketing. I know there's "market research" and "advertising" bundled up in marketing, and I meant the latter when I referred to Sony's marketing campaign. They had a product and decided to broaden the appeal of the product by advertising it to "other" sectors of the population. They didn't get a focus group together to decide what the product should be.

I'm gonna snip most of the rest of your comment, because you're explaining stuff I believe I already understand. I take your point on the US' Japan and Viet Nam wars - I don't have enough knowledge to comment on its historical accuracy. However, I'll point out that the US won against Japan (or at least hastened the end of the conflict) by using a very "disruptive" new weapon.


You're talking about boys being attracted to the tech, not the tech being marketed at boys. Nobody sat there and decided to make the process of setting up a console overly complicated because "boys love this stuff". This again is technological progress and early adopters, not the gaming industry being dead set on only marketing to tech-savvy young males.


How many people buy the same game more than once? How many people watch the same movie more than once? How many times are "classic" movies re-released into the cinema? How many more hours do you get out of a game versus a movie?

Those points might not make up the whole difference in viewer figures, but they point out that you're talking about different products. The point remains, the games industry's yearly takings are at about the same level as the cinema industry's box office takings.


Your original point was this;


So you were saying the hardcore are more fickle than the casual gamer, now you're saying they're less so.


That's old-timers versus newbies. The casuals back then were playing the same cartoony platformers and the casuals now are playing the same space marine shooty games.

Hardcore has nothing to do with it when a genre dominates, if anything, the hardcore are more likely to go for the less dominant genres. Look at how many hardcore Quake players hate the "casual" Halo and all its done to change FPSs in general.


Only if they're chocolate digestives! :-)

Well, you could have said why, not it's just like "look, isaid so with no backing at all, so it must be true".

it's not about ideology or politics, it's about the military structure used combined with supporting economics. Both didn't differn between WWII and the Vietnam war. The US had more means, could out-produce both, but it fought a symmetric fighting foe in the Japanse and then the conclusion is made beforehand. The Japanese knew this as well before Parlour Harbor, hell belgian industrialists in 1940 predicted Hitler couldn't win because of its lower economic production as soon Britain could acces the US economy for aid.

In Vietnam they fought a asymmetric foe that fought in an complete different way (geurilla warfare) were the difference in means is neutralised and the US couldn't cope with it because they were stuck in their tradtional military thinking.

Fact: in mid-1982 the American videoarcades went into a crisis, read the Ultimate Vidoe Game History by Steven Kent, read Phoenix by L. Herman
Fact: in 1978 Nolan Bushnell started Pizza Time Theaters, by early 80's it's a huge franchise chain. It used videoarcades and midwaygames
Fact: midwaygames became more and more the focus of restructered videoarcades a la Pizza Time now called fun parlors, mostly present at shopping malls , JoyStick Nation by J. Herz has chapters aimed at this phenomenon. midway games disrupted videoarcades by taking huge chunckstheir recruting layer: kids.
Fact: videoconsoles in the 80's received ports of arcade hits.
Reasoning: using disruption theory, you could say videoconsoles disrupted videoarcades by making it easier accesible and cheaper then the real thing because it did a "good enough" job of translating the expercience. Not pixel perfect, but the succes of consoles have shown that a lot of people didn't seem to care. Consoles were only dead by 1984, in 1983 there were more consoles and games sold then in 1982, Phoenix shows this.

Thats all well and good, as far as it goes...I guess I should have defined my terms a bit better...when I said Arcade Industry, I mean the coin-operated videogame industry or "arcade game" industry not the "arcade buisness" itself...the problem being that few people understand how the arcade game industry in the United States actually worked, or understand the difference between the "arcade game" (coin-operated videogame) industry and the "arcade business". The two are manifestly not the same, I have limited experience in the "arcade business", but a great deal of personal experience and knowledge about the coin-operated videogame industry. You think you know what happened to the "arcade business", and have some of the salient points, what happened to the arcade game industry itself a bit different.

But lets start with the arcades themselves. There were three basic types, the "game room", the dedicated "pure" arcade, and the "Pizza Time" model. But since you brought them up, and its an inderesting phenomenon we'll focus on the "Pizza Time" model. These locations avoided the social stigmas and other problems (what happens anywhere you attract large numbers of teens and pre-teens) that became associated with game rooms and "pure" arcades by intentionally distancing themselves from older patrons. What you call "midwaygames" are called in the industry "redemption games" (for the tickets that they dispense and that can be redeemed for "prizes", Midway Games at the time was and had been a major player in the arcade game industry), and they became attractive primarily due to the rising cost and relatively shorter "shelf life" of newer, larger "arcade pieces" like the sit-down drivers and large CRT multiplayer units, which emphasized and exaggerated portions of the "arcade" experience which could not at that time be duplicated on the home console. A bank of Skee-Balls and Whack-a-Moles therefore having a much higher ROI than having to rotate in new videogames. These games also appeal to younger audiences, which were the primary target for the "Pizza Time" model in the first place.

The "arcade game" (coin-op videogame) industry itself was already in decline, only partially due to the pressure from home consoles, it was essentially IMNSHO a victim of its own success. Outside of the arcades themselves, the industry operated in a 4-tier system, Manufacturers, Distributors, Operators, and Locations. The success of games like Pac-Man and Ms. Pac-Man, and the ultimate decline in the industry were based on ubiquity. Ms. Pac-Man specifically was EVERYWHERE. Forget the arcades, despite being attractive and the home of most of the later shiny toys like the abovementioned sit-down racers, most of the actual machines that made it the legendary success it was were in bars, laundromats, convenience stores, restaurants, and "game rooms". It was a windfall for these locations, providing an alternate revenue stream for which they only had to contribute a few square feet of space, and (usually) half of whatever licensing fees applied. But Ms. Pac-Man didn't last forever, and the locations demanded newer machines, and pity the operator who wouldn't (or couldn't) supply fresh ones (leading to the emergence of "conversion kits" which allowed an operator to put a new game in an old cabinet, and systems like the Nintendo Vs. System, which provided many of the earliest and best NES titles), despite being unable to justify their ROI, there was always someone with deeper pockets, or new to the business willing to poach the location out from under you. Another severe body blow to the "arcade game" industry ouside of the arcades (which were always a very limited portion of the actual market during the period of greatest success) was the emergence of "gray" video poker and slots. But I've rambled on enough for the present...

p.s. I don't have to read about it in some book, I was there for most of it, if not onstage, then I had a backstage pass...