Over the years, Japanese multinational Nintendo has made a series of strategic moves to create blue oceans and make competitors irrelevant in the crowded gaming industry.
In 2006 Nintendo looked at the gaming industry’s noncustomers and reconstructed elements across market boundaries to create the Wii – a console based on simplicity, functionality, and interactivity, with games that dramatically raised utility for these noncustomers. Former Nintendo CEO Satoru Iwata, who passed away in 2015, was famously committed to a blue ocean philosophy. He said, “Wii Fit became a success because we saw a blue ocean strategy.”
Fast forward to March 2017, the game company created a brand new blue ocean to answer a growing demand for simple games with people increasingly switching to free downloadable games on their smartphones. Instead of competing with PlayStation 4 or Xbox One and their expensive and high-end processing power, Nintendo created Switch, offering a small device that can go in a dock, allowing you to play games on a TV, but that can also be removed to continue playing seamlessly on the go. Early this month, Nintendo announced that the Switch had become the fastest-selling home video game system of all time in the U.S. and outsold every other console over Christmas.
Now the gaming giant has just introduced its latest strategic move with its new Switch accessories dubbed Nintendo Labo – a range of build-your-own cardboard kits that can transform the Switch’s controllers into anything from a keyboard to motorbike handles. These hands-on cardboard devices add a creative and educational dimension making the Switch more appealing to younger children (and kids at heart). By targeting a younger audience, Nintendo has once again looked at noncustomers of the industry. Not only that, by using a material as simple and non-expensive as cardboard to extend the fun of their game system, Nintendo has chosen value innovation over costly hi-tech invention. And if it sells, at $70 – $80 a cardboard kit, high-profit margins are guaranteed.
We want to know what you think. Will Nintendo Labo extend the reach of the blue ocean Nintendo unlocked with Switch? And more generally what do you think of these cardboard “Toy-Cons”? Let us know by voting Nintendo’s latest strategic move below.