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Nintendo is trying, with the Wii, to create a disruptive technology that unseats current industry leaders. I believe they may already have created that disruptive platform, but it’s not their new console.
The concept of “disruptive technology” was popularized with the book “The Innovator’s Dilemma”. The gist of it is that, in many markets, technological capabilities increase faster than most consumers’ needs. At the same time, some companies create new products that are less capable in the traditional aspects, but feature new characteristics that weren’t considered important in the past.
For example, in the past hard drives were big boxes that had large capacity (for the time). Capacity increased faster than consumer’s needs, and eventually having physically smaller hard drives that held less data became more interesting than large drives that held more data. The companies making the big old drives slowly were overtaken by the companies making the new drives.
Contrary to popular belief, disruptive technologies don’t necessarily revolutionize a market instantly; the new technology often existed in a niche market for a long time before its capacities became good enough for the mainstream market. Look at portable MP3 players: even though the iPod set the market on fire, there were many other similar products beforehand that were promising but not good enough to replace the popular portable CD players.
We can apply this logic to consoles. Graphics quality — the traditional metric for evaluating a console — is improving faster than many consumers care about. For all the talk about the HD era, very few people have TVs that support 1080p. Many people also note that we’ve reached a point of diminishing returns in graphics; adding a few thousand polygons more on the screen just doesn’t have the impact it used to. Yet, both Sony and Microsoft concentrate on graphics power to promote their new system.
The console market seems ready for a disruptive technology to shake its core assumptions. Is the Wii the platform to do so? Nintendo hopes so. They see their new console as the “Revolution” that will change gaming into caring more about ease of use than raw power. I don’t believe that will happen: the Wii games are just too similar to their competitors’, even with the new controller. The Wii may be a success, but I don’t think it will disrupt the status quo.
The good news for Nintendo is that they’re already the leaders in what may be the real disruptive technology: handheld consoles. Handheld games used to be too limited to reach the masses, but now the PSP and DS are reaching graphical quality that’s “good enough” for the mainstream. They also have unique qualities that traditional consoles don’t have: portability, easy connectivity with nearby players and approachable games.
Handhelds are good enough in the traditional characteristics of consoles, but also bring something new to the table. Sounds like a potential disruptive technology to me — as I said, disruptive technologies don’t overtake a market instantly, but rather do so when they become good enough for the mainstream market.
I believe the Nintendo DS’ success is the tipping point of what may be the real new era of gaming — forget the HD era, here comes the Portable Era. The next hot system may very well be defined by its battery life and ease of transportation rather than by the quality of its graphics.