Post by *NormalGamer* on Feb 13, 2006 22:42:51 GMT -5
www.brandweek.com/bw/magazine/features/article_display.jsp?vnu_content_id=1001995536
Mario's Grown Up, You Ready To Play?
By Reggie Fils-Aime
February 13, 2006
I N THE mid-70s, two blockbusters changed the nature of movie-making: Star Wars and Jaws. Each was competently written, acted and directed, but what set them apart, in the minds of both their adoring audiences and delirious Hollywood executives, were
special effects. When a huge shark and an entire outer space tableau could seem so real, and generate out-of-this-world box office revenue, a new paradigm was set. Computer technology would drive the industry inevitably forward.
Sure enough, we saw hits like Indiana Jones and The Terminator and Harry Potter over the next three decades, but also plenty of costly flops. Remember Waterworld? Howard the Duck? If you don't, you're not alone. Computers alone aren't the answer. Low- tech productions like Napoleon Dynamite and Sideways prove that it still takes more than visuals to make a great movie.
In the terminology of Harvard professor Clayton Christensen, hits like Jaws constituted "disruptive" technologies, overturning a predominant industry trend. Many of the more recent story-based vehicles have also succeeded, even though they seemed geared to "fringe" audiencesÑthink both The Passion of the Christ and March of the Penguins.
The consumer electronics industry today faces this same kind of inflection point. For many years, technical performance reigned, whether measured by the dimensions of TVs, computer memory and speed, or the multiple functions embedded in cell phones. But as Christensen also observed, technological gains can eventually overshoot a market. That leaves a vast opportunity for disruptive technologies whose appeal is typically, "cheaper, simpler, smaller, and frequently more convenient to use." Cue the Apple iPod.
Nowhere does the example fit better than my own industry, videogames. Twenty years ago, we were almost exclusively the province of 12-year-old boys. Many of those same players who grew up playing games with our Mario character retain their appetite for games today, even if their preferred adventure now is darker, deeper and increasingly complex. Still, the performance vector is unchanged: make it look better on screen, make it even harder to win, and players will be happy.
But a funny thing happened on the way to the future. Mounting evidence shows that we may well have overshot our own market. Our games grew so complex they became intimidating, further polarizing players and non-players. Market revenues have sagged in the U.S. for the last two years, and in Japan for six of the last seven. The industry just endured a disappointing holiday season and studies show that non-hard-core gamers are playing less frequently.
Our player pipeline is also shrinking. U.S. Census Bureau data indicate that currently the number of 5-to-9 year old boys in America is 8% smaller than their 10-to-14 year old big brothers. Soon, we won't have simple population growth to expand our market, and that's what we've relied on. Despite dramatic gains in graphical realism in four generations of console platforms, we haven't grown our penetration rate beyond about a third of all American homes. Yes, more people meant more sales, but in relative terms, we haven't succeeded in becoming more popular.
As the next generation of home game consoles gets underway this winter, the cars are prettier, the villains are uglier, and the playing fields look even more realistic. But the game play itself? Well, so far there's not much improvement to report.
Nintendo's counterpunch is disruption. We've determined that the videogame market is ripe for revivalÑand we're looking to make it happen by reaching out to the millions of players still on the sidelines, including those over the age of 35.
Early moves have been promising. Nintendogs, a game that allows people to train virtual puppies, has doubled the typical percentage of female purchasers, selling 1.5 million copies in about four months. Not bad, given that Nintendo DS hardware is in 4 million hands. In Japan, a pair of games designed to refresh and renew brain activity won over millions of people who previously associated videogames only with their grandkids.
And we've pulled the wraps off a new game interface for our upcoming console, code-named Revolution, that will break down the barriers of complexity that bar newcomers from test driving our products, while featuring the most advanced gaming experience ever. We're expanding our market by disrupting it.
Yes, it's a daunting idea. Small companies often think they don't have the resources to change an industry, no matter how novel their approach. Larger ones frequently maintain a built-in antipathy to undoing what seems to be working. But we agree with the admonition of Jack Welch: "ChangeÑbefore you have to."
If your business hasn't yet had to face an upstart like Dell or Southwest or Google, you probably will. The pace of change, in terms of market share, product diversity and shareholder value, is intense. A decade ago, anyone who could have effectively predicted the impact of blogging, instant messaging and the proliferation of Web sites would have already been decreed a genius.
In short, the sensible path seems clear: disrupt before you're disrupted.
Reginald Fils-Aime joined Nintendo of America, Redmond, Wash., as evp-sales and marketing in December 2003, with responsibility for the U.S., Canada and Latin America. Previously, he worked at VH1 and held posts at Guinness Import,
Pizza Hut and Procter & Gamble.
Mario's Grown Up, You Ready To Play?
By Reggie Fils-Aime
February 13, 2006
I N THE mid-70s, two blockbusters changed the nature of movie-making: Star Wars and Jaws. Each was competently written, acted and directed, but what set them apart, in the minds of both their adoring audiences and delirious Hollywood executives, were
special effects. When a huge shark and an entire outer space tableau could seem so real, and generate out-of-this-world box office revenue, a new paradigm was set. Computer technology would drive the industry inevitably forward.
Sure enough, we saw hits like Indiana Jones and The Terminator and Harry Potter over the next three decades, but also plenty of costly flops. Remember Waterworld? Howard the Duck? If you don't, you're not alone. Computers alone aren't the answer. Low- tech productions like Napoleon Dynamite and Sideways prove that it still takes more than visuals to make a great movie.
In the terminology of Harvard professor Clayton Christensen, hits like Jaws constituted "disruptive" technologies, overturning a predominant industry trend. Many of the more recent story-based vehicles have also succeeded, even though they seemed geared to "fringe" audiencesÑthink both The Passion of the Christ and March of the Penguins.
The consumer electronics industry today faces this same kind of inflection point. For many years, technical performance reigned, whether measured by the dimensions of TVs, computer memory and speed, or the multiple functions embedded in cell phones. But as Christensen also observed, technological gains can eventually overshoot a market. That leaves a vast opportunity for disruptive technologies whose appeal is typically, "cheaper, simpler, smaller, and frequently more convenient to use." Cue the Apple iPod.
Nowhere does the example fit better than my own industry, videogames. Twenty years ago, we were almost exclusively the province of 12-year-old boys. Many of those same players who grew up playing games with our Mario character retain their appetite for games today, even if their preferred adventure now is darker, deeper and increasingly complex. Still, the performance vector is unchanged: make it look better on screen, make it even harder to win, and players will be happy.
But a funny thing happened on the way to the future. Mounting evidence shows that we may well have overshot our own market. Our games grew so complex they became intimidating, further polarizing players and non-players. Market revenues have sagged in the U.S. for the last two years, and in Japan for six of the last seven. The industry just endured a disappointing holiday season and studies show that non-hard-core gamers are playing less frequently.
Our player pipeline is also shrinking. U.S. Census Bureau data indicate that currently the number of 5-to-9 year old boys in America is 8% smaller than their 10-to-14 year old big brothers. Soon, we won't have simple population growth to expand our market, and that's what we've relied on. Despite dramatic gains in graphical realism in four generations of console platforms, we haven't grown our penetration rate beyond about a third of all American homes. Yes, more people meant more sales, but in relative terms, we haven't succeeded in becoming more popular.
As the next generation of home game consoles gets underway this winter, the cars are prettier, the villains are uglier, and the playing fields look even more realistic. But the game play itself? Well, so far there's not much improvement to report.
Nintendo's counterpunch is disruption. We've determined that the videogame market is ripe for revivalÑand we're looking to make it happen by reaching out to the millions of players still on the sidelines, including those over the age of 35.
Early moves have been promising. Nintendogs, a game that allows people to train virtual puppies, has doubled the typical percentage of female purchasers, selling 1.5 million copies in about four months. Not bad, given that Nintendo DS hardware is in 4 million hands. In Japan, a pair of games designed to refresh and renew brain activity won over millions of people who previously associated videogames only with their grandkids.
And we've pulled the wraps off a new game interface for our upcoming console, code-named Revolution, that will break down the barriers of complexity that bar newcomers from test driving our products, while featuring the most advanced gaming experience ever. We're expanding our market by disrupting it.
Yes, it's a daunting idea. Small companies often think they don't have the resources to change an industry, no matter how novel their approach. Larger ones frequently maintain a built-in antipathy to undoing what seems to be working. But we agree with the admonition of Jack Welch: "ChangeÑbefore you have to."
If your business hasn't yet had to face an upstart like Dell or Southwest or Google, you probably will. The pace of change, in terms of market share, product diversity and shareholder value, is intense. A decade ago, anyone who could have effectively predicted the impact of blogging, instant messaging and the proliferation of Web sites would have already been decreed a genius.
In short, the sensible path seems clear: disrupt before you're disrupted.
Reginald Fils-Aime joined Nintendo of America, Redmond, Wash., as evp-sales and marketing in December 2003, with responsibility for the U.S., Canada and Latin America. Previously, he worked at VH1 and held posts at Guinness Import,
Pizza Hut and Procter & Gamble.
You ought to know that I really don't have anything against you.