Nintendo Wii Blue Ocean Strategy -- Strategy Canvas

In April I'll try to show some Strategy Canvases built with the Blue Ocean Strategy (BOS) practitioner's tool I developed, BOS Createware. I'll start with the Nintendo Wii. Nintendo has never released the strategy canvas they used, but the canvas above is a good guess of what it probably looks like.

Let's look at the Key Factors, and examine how Nintendo likely arrived at them:

Eliminated Movie Playing. The PS3 plays Blu-Ray disks. The XBox 360 plays HD-DVD. Both play DVD's. The Wii plays ... nothing. Only games. Nintendo realized that high-resolution movies on a game machine are Technological Innovation: innovation solely for the sake of innovating. High-resolution movie-playing adds cost that doesn't align with the added consumer value.

Reduced Graphics & Physics. The Wii has good-enough graphics: they're fine. Using the six-path category of Strategic Groups shows people trade-up on entertainment to TV and movies or down to board-games. Nintendo obviously realized the cost of trying to invent a widget that traded up to the higher strategic group, movies, didn't outweigh the cost. Physics is similar: balls bounce just fine but if you're looking for real-time rendering of wind rustling through leaves look outside your window: this isn't something important enough to justify the added cost.

Raised Fun. This one almost seems obvious but, in retrospect it's probably the biggest six-path key factor responsible for the Wii's success. Microsoft and Sony concentrated entirely on functional elements: great graphics processors, physics engines, specialized chips, etc... Nintendo used the six-path element of Functional/Emotional to turn that around. Everything about the Wii is Fun: Fun -- an emotion element -- was placed over chips, a functional element. Mii's are fun; the fact the PS3 does a petaflop of calculations is cool, but not especially fun. Besides raising the Fun element Nintendo created the Virtual Console to take advantage of that giant game library they had lying around.

Created the Wiimote: Nintendo's Magic Wand. I've written an entire post just about the Wiimote: here's a link -- http://www.valueinnovation.net/2008/02/create-tech-innovation.html.

Repeating the well-known end-result, the Wii blew out of stock the day it was released and has remained unavailable ever since. PS3's and XBox 360's are stacked up as tall as a person on showroom floors, but you still have to show up at store opening times for the chance of landing a Wii. At last count the Wii was outselling the PS3 4:1 in Japan and is projected to overtake the XBox 360 in total volume of consoles by year-end despite that the 360 had a year head-start. Nintendo didn't compete in the Red Ocean: they created a Blue Ocean that rendered the competition irrelevant.