#696 2006 · Nintendo (Satoru Iwata, Shigeru Miyamoto — Wii) · Consumer electronics / video games
Nintendo can't win the graphics arms race against Sony and Microsoft, so it stops entering that race at all
the problem
Competing on the same axis as better-funded rivals means losing slower, not winning
background
Heading into the seventh console generation, Sony and Microsoft were locked in a straightforward arms race with the PlayStation 3 and Xbox 360: whichever machine had more processing power and better graphics won press coverage, developer support, and, the assumption went, sales. Nintendo, with a fraction of either rival's engineering and marketing budget, could not out-spec either console — matching them on that axis meant losing a fight it had no way to win.
Nintendo president Satoru Iwata and lead designer Shigeru Miyamoto concluded the smarter move wasn't to compete harder on graphics but to stop competing on that axis altogether. Miyamoto later described wanting a console so cheap to build that essentially every development dollar could go toward the interface and the games instead of chasing rendering benchmarks nobody outside a narrow core audience actually cared about.
the move
The Wii, launched in November 2006 at $249.99, shipped with hardware well below the PS3 and Xbox 360's specifications, and Nintendo put the savings into the Wii Remote, a motion-sensing controller that let anyone play by swinging, pointing, or swiping instead of learning multi-button combinations. Titles like Wii Sports and Wii Fit were designed explicitly to draw in people who had never considered themselves gamers — families, older adults, casual players — rather than competing for the existing hardcore-gamer audience Sony and Microsoft were fighting over.
the payoff
The Wii went on to outsell both the PS3 and Xbox 360, reaching roughly 101.63 million units sold over its lifetime and helping push Nintendo's overall sales up 73% to $16 billion within a couple of years of launch, with the accessible 'Wii' series titles becoming several of the best-selling games of the generation.
what came after
The Wii's strategy became one of the most cited real-world examples of what strategists later formalized as a 'blue ocean' move — competing on an uncontested dimension instead of matching rivals feature-for-feature — and Nintendo carried the same logic forward into the hybrid, accessibility-first design of the Switch, which went on to outsell the Wii itself.
references
- [1]Iwata's Blue Ocean Strategy prevented the Nintendo Switch from sinkingiMore, 2020imore.com
- [2]Shigeru Miyamoto: The Wizard of WiiTime, 2008time.com