What Goes Up, Can't Go Down
Or: Why the Microsoft Kinect and the Playstation Move are doomed to fail*Update 1:I’ve realized I needed to make the definition of what ‘fail’ meant more explicit. In this case, ‘fail’ refers to catering to the non-gamer market. Considering the article is called “What Goes Up, Can’t Go Down”, I thought that was pretty obvious. If it wasn’t, I hope it is now. Monocle smile! 😉 Update 2 (12/18/2010):Well, according to VGChartz, Microsoft’s Kinect did in fact eventually reach the milestone of 4 million units sold worldwide (2.6 million units in the Americas) in the week that ended on Dec. 11. Of units sold, 40% of them bundled with a Xbox 360 console, which indicates that there actually was an expansion of the console’s user base. The PlayStation Move, which didn’t get all the marketing support the Kinect did, has sold just over 900 thousand units so far. So yeah, I was wrong. Colin Sebastian was right. Shit. I hate being wrong. However, I still don’t believe Kinect’s success has enough legs for the long run, since the arguments presented in that article below are all still valid. Now leave me alone while I enjoy my grudge for not having my MBA funded by Lazard Capital Markets. But hey! On the other hand, I’m not unemployed anymore. I got an actual paid job! But what a beautiful coincidence!
And now, our featured presentation:After a good while without writing any kind of analysis on the game industry, I felt the bug bite my neck. Now I can’t stop itching. The only cure is to fetch the Nostradamus hat.  Created by Michel de Nostredame, the N-hat never went out of style My Nostradamus hat is very competitive toward other analysts’ hats. It runs on jealously alright, but since what ultimately matters is its arguments and logic rather than its drive, I listen to it. That’s why the moment it heard Lazard Capital Markets analyst Colin Sebastian saying we’ll see 4 million Kinect devices sold in the fourth quarter of 2010 alone, it rang its bullshit alarm. BeeeeepBeeeeepBeeeeep! BeeeeepBeeeeepBeeeeep! BeeeeepBeeeeepBeeeeep ! No, Colin. That won’t happen. Let me tell you why. In order to see why the Microsoft Kinect and the Playstation Move are doomed to fail, we have to understand why the Nintendo Wii was a success. In order to do this, I’m using the framework provided by Clayton M. Christensen in is book The Innovator’s Dilemma. The Nintendo Wii was a disruptive type of innovation. There are two kinds of innovation: sustaining and disruptive. A disruptive innovation is an innovation that offers a different set of values, while a sustaining innovation merely improves on the values already established. Whether or not the innovation is radical or incremental in nature is irrelevant. What matters is their value proposition. Sustaining technologies is about improving product performance. You hear what your customer wants and give it to them. That improvement can be incremental (slightly better graphics) or radical (3D games instead of 2D), easy or difficult to achieve – but the values used to measure the product remain the same. Most technological improvements are like that – that’s also what companies are trying to do all the time: listening to their clients and improving performance to reach higher markets. Examples of sustaining innovations are the PS2, the Gamecube, the PS3 and both the original Xbox and the 360. All these products improved what their predecessor set out to do, delivering better graphics and more processing power. Disruptive innovations, on the other hand, are usually very straightforward and use off-the-shelf components in a way that’s usually simpler than other approaches. The result is that they obviously cannot offer what the mainstream market wanted. That’s why they must target at other niches, which different values, that desire what the disruptive innovation offers. In its efforts to stay ahead by developing competitively superior products, sustaining innovations make the companies move upmarket, eventually over-satisfying the needs of their original consumers. When the PS3 was first launched with a $600 price tag, that ended up created a vacuum at lower price point into which a company like Nintendo, employing disruptive technology was able to enter. Another good example of disruptive innovation is the Playstation One. It had graphics that were worse than the Nintendo 64 and it was cheaper too. The disruptive element? The media. CDs allowed cheaper development costs, which attracted developers. The Playstation One also targeted a niche: teens and young male adults who played games casually instead of the mainstream market of the time (children, geeks, etc). Eventually, these types of gamers became the new mainstream.  A neat visual example of how a disruptive innovation operates So, here was the Nintendo Wii. It targeted the lowest part of the market, the non-gamer. Down and upmarket are simply points of reference. The downmarket is usually a smaller market with smaller typical gross margins. The upmarket is a bigger market with better gross margins. The lower you get to the market, the more price sensitive your clients are going to be. Sony and Microsoft are targeting the upmarket – hardcore gamers – with the better margins. Point in case: their games usually cost 50-60 dollars and more than ever they are relying on service revenues such as online subscriptions and DLC. Meanwhile the Wii has a 30-50 price range and very little focus on online gaming. While it is natural for a potential Wii2 (or Wiii) to move upmarket, delivering better graphics, other gimmicks and whatnot in order to achieve the more profitable gamer (us), I believe that Nintendo will choose to stay where they are simply because they are in a very cozy position and virtually not being threatened by competition. On the other hand, enhanced by this new market of non-gamers and casual opportunities, we see an effort from Sony and Microsoft to move downmarket. This is new. Until this E3, Microsoft’s strategy was completely different: to make its presence larger in the higher end markets of countries outside the AEJ belt (US, Western Europe and Japan). That strategy was apparently abandoned though. Microsoft may have realized that there is not much room to go upmarket anymore – and the option to reach that same segment in other regions might contain too many obstacles (taxes, piracy, government biases). Their current markets may offer the better margins now, but the emergent market of non-gamers grows faster and their tastes also evolve. But here is the bump in my neck I can’t stop scratching: history has proven that while there is considerable upward mobility into the value networks of other markets; the mobility downwards into markets enabled by disrupting technologies is restrained. In other words, what goes up can’t go down. Nintendo has better chances of going upmarket and targeting hardcore games than Sony and MS’ chances of reaching casual and non-gamers. There are 5 reasons for this: First reason: Sony and MS depend on us. This is pretty straightforward. We, the “hardcore gamers” are, as clients, holding Sony’s and MS’ business hostage. We value our games differently as non-gamers and thus we don’t want the kind of games they do. I, for example, don’t choose my games based on how easy it is to control them – but my mom would. Sony and MS are forced to use their resources on stuff we want because, right now, all their earnings come from us. Nintendo didn’t even have that. Its Nintendo GameCube was a sinking ship and having failed to break into the more adult consumer base, it was supported mainly by its loyal but limited fan base who could heroically survive only with annual rations of Marios and Zeldas. In fact, some so-called analysts (yes, I’m aware I’m a hypocrite) even declared Nintendo should do a Sega and leave the videogame business altogether. Who looks silly now? Just to keep tabs, one of these guys was UBS analyst called Mike Wallace. Free from the shackles of hardcore gamers and with a devoted fan cult base that was sure to follow them wherever they would go, Nintendo had nothing to lose and everything to win. Sony and Microsoft, on the other hand, have a significant market they can’t afford to lose and very little to win, which brings us to the… Second reason: A market with small gross margins won’t solve the growth needed by large companies. A company worth 1 million only needs 250.000 to grow 25%, while a company that’s worth 1 billion will need 250 million in order to achieve the same growth and keep their stockholders happy. Microsoft, for example, is still the most profitable technology company in the world – but their stocks (which represent the future value of a company) are worth less than Apple’s. This is because Microsoft hasn’t invented any products that will greatly increase their growth in a good while now, while Apple keeps bringing out new toys. This is even more troubling for Sony who until not long ago had their entire operation depending on their videogame business.
Third reason: Because we still don’t fully know who this “non-gamer” creature is yet, most of the process to reach them is by trial and error. Unless managers at Sony and Microsoft are willing to face failure – and they aren’t – they will be unable to find this market. One of the ways to explain this would be to expand on intra-companies logic: best practices demand that best employees are rewarded by meeting goals, so it is logical that employees will choose to invest more on problems against which they are more likely to succeed – even if that means following a radical and risky sustaining innovation for a market they are already familiar with than trying to find a new market for a disruptive innovation. This means their own management will filter opportunities out in order to avoid the risk of failing and spoiling their careers. Another way to explain this is to tackle the process of finding new markets itself. This is a trial and error approach. You can’t rely on data nor consultants – simply because there can be no data for something that does not exist yet. What you can bet on is that every analysis on the new market is likely to be wrong. Successful companies that cannot or should not tolerate failures in sustaining innovations will also find it difficult to tolerate them in disruptive innovations. So what do we have? On one hand, the companies’ resources (money, manpower) will meet obstacles in order to reach their disruptive projects. On the other hand, the only way to reach new markets is by interactive learning which, by definition, condemns them to fail until they get it right. Their reward? Something that won’t satisfy the growth rates demanded by the company even if the project is successful. This is not a very encouraging scenario. An example for why the Kinect/Move will be seen as failures – even if they sell enough to cover their costs – is the Apple’s first tablet, the Newton, which tried to boost the PDA (now evolved into smartphones) market. Although they sold almost the same number of units the Apple II did (also a product for an emergent market at its time), Apple was now simply too big to consider the Newton PDA’s revenue as a success. Forth reason: Their processes, their cost structure, their values and all other things that establish the capability of a company were all defined around their current business model – selling consoles (or multimedia devices in Sony’s case) to hardcore games. That implies that same capability is NOT suited for business models – including the disruptive business model Nintendo is operating in. This is something that happens in almost any industry. It is the high-end markets, willing to pay more for their games, what justifies the overhead costs Sony and Microsoft implemented in order to reach that market. Although it would be great to have games with low development costs being sold at high prices, this would only be possible in a monopoly scenario with clients willing to pay for such prices. So, assuming that there is a relation ship between the games’ price and the cost structure to reach that price and still get some profit, this leads to a situation where one company’s cost structure is structured to reach market A, but may not be appropriate to reach market B. Such is the case here. Case in point is how the Xbox’s and PS3’s entire manufacturing line is still more costly than the Nintendo Wii’s. Considering the non-gamer market is much more sensitive to price, they are doomed either to continue to operate at a loss or to be ignored. No wonder Colin Sebastian is praying Microsoft to sell their Kinect only at $99 (while conveniently leaving him an excuse when his prediction turns up to be false: he can simply say he warned Microsoft that $99 was the sweet spot for it). Fifth reason: Technology supply does not equal market demand. The technological attributes that make the Wii unattractive for us (e.g. tackled-on motion controls, encouragement for mini-games collections) are the same attributes that constitutes the greatest value for non-gamers. This means that their biggest selling point – from Kevin Butler’s own mouth “Who fights boxing by waving their arms?” – is void: non-gamers obviously like to fight like that. So, Nostradamus hat, let’s take a peak into the future, shall we? After realizing how successful the Nintendo Wii was, Microsoft and Sony had 3 options facing them:
My opinion was that they went with a mix of #1 and #2 and decided that the non-gamer market was not big enough per se, but big enough so that they could enter it and improve its growth. I didn’t see any indication that number #3 happened. If it did (even if this “smaller organization” was merely a completely independent team inside the bigger company, borrowing its resources but ditching its processes and value), then kudos to you, bigger company; because #3 was the best option. What we will see is likely to be a short me-too stage: with games similar to the Nintendo Wii being made for the Move and the Kinect – but then they will stumble to justify why the 360/PS3 costs so much more than the Wii. So the price-sensitive casual market will ignore their products. Then I bet they will try to make the hardcore gamers themselves buy the casual-aimed supplements. They are probably going to use some “reconnect to your family” or “Online now is to bring families together” marketing approach. Sebastian expects this heavy marketing to be the catalyst for his 4 million Kinect units being sold miracle. This tactic won’t increase their user base, but may be the bait for the next console generation – but then you have 2 additional issues: First: Will there be, in fact, a next generation and, if so, will casuals be willing to pay more for these new consoles then? I would say no. Casual players won’t (and why would them after being raised with me-too games?). Second: Why would a hardcore gamer buy the supplements in the first place? Here’s where Nintendo first-mover advantages really shines: it’s likely they already have a Wii and, if they don’t, why would someone who chose not to get a Wii then get a Kinect now?  For Skittles For hardcore gamers, Kinect only becomes interesting when its scope goes beyond games. Again: it is easier to move up-market than down-market. Microsoft has the chance here to move even move up-market, by selling Kinect as a motion/voice sensing device that will show up in connected TVs, living room PCs, set-top boxes and other consumer devices, thus targeting a tech-savvy user willing to pay a premium for experimenting new technologies before everybody else. After failing to attract new casual games, my Nostradamus hat tells me Sony and Microsoft will try selling these devices to us, the hardcore gamer. In fact, if Kevin Butler’s almost schizophrenic E3 speech tells us anything, Sony’s marketing pitch is already made. This brings us back to reason #1. The problem with this is conceptual: what defined the innovation as a disruption is the very fact hardcore gamers already value other stuff (story, length, gameplay mechanics) higher than the input method. Besides, normal controllers are already more convenient and reliable; whereas motion controls can sometimes still struggle with their performance. The technological offer of motion controls simply has not reached what our market level demands yet. Sony knew this after the Sixaxis fiasco – perfectly portrayed by the game Lair. Sony’s bet is that the Move will finally deliver what hardcore gamers want. When you take into consideration the many functions the Playstation Move has, aiming at hardcore games makes even more sense than casuals and non-gamers, who will see the product’s complexity (“Do I need 1 or 2 Navigation controllers? Just one Move? Or 2? Do I also need an EyeToy? What if I already have one? Are they different in any way?”) as a turn-off anyways. But can the Playstation Move deliver more than the DualShock? More enough to justify purchasing a couple of Move/Navigation pairs plus the EyeToy, that is? Unless Sony cannibalizes the DualShock and forces the new blockbuster games to use the Move only, I don’t believe they can convince us that the Move can deliver. Besides, considering Sony’s historical reluctance to cannibalize its own products (which was the reason Apple was able to steal their spotlight with the iPod, after years of Sony’s dominance with the Discman and the Walkman), I doubt they will be able to frame this decision for us gamers properly. So that was it. The stage is set and I’ve already ordered my pieces to move. If I’m right, I will gloat and gloat as the sore winner that I am and claim all the non-existent glories my inflated ego will require. If I’m wrong, I will hope nobody remembers this text and I will probably silence whoever brings it up. In any case, here is the rundown: Microsoft’s Kinect most viable path is upwards, not downwards. Sony’s Playstation Move is still schizophrenically trying to unite two very distinct value propositions, without truly committing to neither. Both Sony and Microsoft won’t be able to reach the casual and non-gamer market, because once a company goes upmarket, it doesn’t come down again. In other words, Colin Sebastian is wrong because of the reasons raised from the innovator’s dilemma Microsoft now faces. I will now attach this article at my resume, send it to Colin’s Lazard Capital Markets and ask them to fund my MBA (since my imaginary job of being jobless makes it kind of hard to fund it myself). Because so it was foretold… by the almighty Nostradamus hat. |
Excellent article with nice detail–to be honest, one of the best analysis pieces on this issue I’ve read to date.
To be terribly brief, though, it boils down to this for each side:
Sony–why have the package include the wand, the Eye, and the game– but NOT the basically mandatory navigation controller? Also, I agree with what I read somewhere else that the choice of Sports Champions as the tie-in makes it seem like the Wii-too its technology suggests it already is.
Microsoft–they have done an awful job managing the PR. Play sitting down, standing up? How many players? What OS interface control (e.g. menu scrolling) will it support at launch? Allow website to list pre-orders at $150, deny it as the official price for two weeks, and then admit that IS actually the price. Not mention that the $150 price point is just insane as an attempt to capture the casual market.
terrible article, almost everthing you said is wrong, like the nav controller? i have yet to see a game use it, and u said it is mandatory! HA
Great article. Colebeans, you are a sad, sad fool and I am glad I am not you. That is all.
I think the article is spot on. Most of my friends who are into gaming simply do not care about Kinect, or the Move. And… one thing I want to know is who are the idiots who came up with the name Kinect??? Project Natal was definitely cooler, but KINECT? And the Move wand looks like an adult toy. I’m sorry, it does. I think Sony and Microsoft let some neanderthals get into their R&D department.
Hehehe… Coming from a Brazilian, Natal sounded waaaaaaaaaaaaaaaaaaay worse because, in Portuguese, Natal means Xmas. I’m fine with the word Kinect though. I mean, after a console called Wii (or how the French call it, the Nintendo Yes), I can let a Kinect pass.
Sony’s “Move” name is funnier, IMO. First it was the PSP “Go”, now it’s the PS “Move”, soon it will be the Playstation GTFO XD
hey Fernando Cordeiro.I just want to say that project natal received it’s name because of the city tha shares the same name.we brazilians would most likely associate that name to the city,instead of christmas.
Eu não, cara! 😛
Como não moro em Natal, pra mim a relação com o dia 25 de dezembro é bem maior. Tipo, a intenção de quem quis dar o nome é irrelevante: é tipo o Wii, que nasceu de uma corruptela de “we”, mas que gerou inúmeras piadas mesmo assim. Na França, o pessoal chama ele de Nintendo Sim!
Good opinion piece! I enjoy your thoughts on the subject, however one thing I think you failed to realise or mention is that devices such as PS3 appeal to both hardcore and casuals, there’s enough content on there to appeal to all gamer young or old. Whether or not devices such as move appeal to “non-gamers” as you put it is yet to be seen. Is $400USD too much for a “non-gamer” to pick up a PS3 for mainly watching blu-ray and other media, and playing move supported “party” titles? Time will tell, however if I remember correctly, if the Toys R Us “Most Wanted” charts are anything to go by then the PS3 + Move pack is currently sitting at #3 on their list. The question is, which demographic is mostly buying this?
While it’s fair to say it’s confusing for some people what peripherals are needed for Move titles, I believe the hardcare gamers will find it easy to determine what they need and are going to really enjoy Move once they get to experience it. With the knowledge that a lot of their favourite future release titles are going to support Move as well as many other existing games are going to be patched so that they can support move too. Now enter the casuals into the fold, if they can affort to buy all those expensive peripherals for Rock Band and Guitar Hero or microphones for games like SingStar there’s a decent change they’ll bite the bullet and buy a Move starter pack as there’s a lot of games like Sports Champions, Move Party etc. that will cater for their casual gaming needs.
I think Microsoft has the riskier strategy of the 2, the most to gain from Kinect if it succeeds, but also the most to lose if it fails. Why do I say this.? At present I am yet to see any upcoming title for Kinect (with exception of Child of Eden) that will appeal to a hardcore audience. This could well change in the future, but in the current state of play just about all announced Kinect games target casuals and non-gamers, which also runs the risk of alienating their main target audience, the hardcore gamers, because non-gaming aspects aside (ie voice command for xbox menus, gesture system etc.) what’s in it for the hardcore gamer as of yet? Pricing for the new Arcade + Kinect Bundle, might bring in the casuals and non-gamers (as it’s cheaper than the PS3 + Move bundle, yet more expensive than buying a wii), but yet again I ask the question, which demographic is mainly preordering this bundle?
Also I’d like your opinion on how many units ( Move or Kinect ) you believe Sony and Microsoft need to sell in order to consider their peripherals a success. If 1/4 (ie 9-10 Million) of the current ps3 or xbox owners (ranging somewhere between 36 and 41 million consoles sold worldwide respectively) bought one of these new motion peripherals, do you believe that’d be enough of a justification for Sony or Microsoft to release these add-ons? If not, what number would you deem a success in their eyes?
I think the potential downfall for any first party device add-ons like Move or Kinect is that history has shown that add-ons whether it be MegaCD, 32X, EyeToy etc. have never sold particularly well, if that trend continues then it’ll likely spell doom for Move and Kinect.
Anyhow only time will tell if you are right or not. Now we must play the waiting game!
Thanks! I agree that the PS3 has enough content for most players. In fact, too much content I believe. It also has stuff one type of gamer will value, but the other will not – and the price will charge them all equally. I believe the Move could fare much better among hardcore gamers than non-gamers.
I’ll refer to this chart now. Basically, there is a theory that products compete on 4 criteria. First one is performance. When all products start offering the minimal amount of performance desired by the market, then that market will start comparing the products related to reliability. And so goes until we reach “priceâ€.
http://www.kk.org/cooltools/archives/innovators.jpg
Assuming Tier 1 are the non-gamers, it makes to create the hypothesis that their demand on motion control performance is not very high. Ultimately, between the Wii and the PS3, it will come down to convenience (here is where Sony’s Blue-ray pays off) and price. Meanwhile, assuming the Move works flawlessly, it makes more sense for Sony to aim at the Tier 3 (we), because that’s a level of performance only they could reach.
The catch is to make the hardcore game desire that performance. For that, I think that merely patching a Move support won’t do. They must offer no other choice for their blockbusters!
You’ve mentioned the expensive peripherals. I may be full of shit here, but I don’t think the non-gamers were the ones made up the bulk of that market, but the casual gamers (here I’m thinking on the stereotype that buys Madden and chooses his games based on hype). But even so, these guys already have the consoles, so it’s not like they would help MS and Sony increase their user base. Also, given the amount of stuff they already have, we have to pinpoint what kind of new value will the Move/Kinect add to the stuff they already have. Most of the Kinect games felt like “me-too†versions of already existing Wii games, after all.
Gosh! I wish companies released the information of what kind of gamers are buying those games!
I honestly have no idea of how many units are going to be sold. I mean, that’s what irked me the most about Colin Sebastian’s prediction: the numbers he pulled out are pretty much meaningless. Most of the time, they take numbers from similar issues from the past (e.g.: number of EyeToys being sold) and assume that the future will replicate the past – which is a very BOLD assumption. Colin Sebastian’s numbers are only good for Colin Sebastian’s clients, who pay him for some kind of validation. From the companies’ perspectives, Microsoft has more chances of viewing the Kinect as a success mainly because it has more money to burn. As long as the Kinect establishes a strong brand, it will win in MS’ forgiving eyes. I doubt their stakeholders will be happy with it, though. The non-gamer market may not be big enough for the needs of a company like MS. Sony, because of its smaller user base, is likely to require the Move to sell more PS3s. In my opinion, we are too late into this console generation for Move to have such a significant impact – unless it is able to convince 360 users to purchase it. Do you think that will happen? I am pretty sure both of them will not be able to tackle Nintendo’s domain and get a meaningful bite of its market-share.
This article is quite blind beyond the source material it is based on.
It doesn’t consider that many “casuals” actually have a PS3 in their homes but just never use to play games. The Move would serve as a good way to cater to them, furthermore polls in Japan indicate that many kids and women would love a PS3 (they see it as the most appealing) but haven’t yet have the reason to buy it. Myself as a Hardcore gamer wouldn’t even care less even if it weren’t a success as the Move has already and will provide games like Killzone 3 for me.
You talk about Sustaining technologies….errrm how is the Move/Kinect not a sustaining technology. We all know the Wii has some of the worse graphics is extremely outdated (The friends new Samsung TV doesn’t even have RCA). The PS3 and Xbox clearly can provide the heavily demanded Wii2 now at todays prices. You might then suggests well there is the actual Wii2, well then by then I wouldn’t be suprised that the Wii would only be playing catch up in graphics and be a lot more expensive then the already dropping prices of the later consoles.
Lastly I personally don’t see Nintendo going far without true 3rd party support like they did with Retro Studios. You look at the latest Metroid title by Team Ninja, and reviews so far indicate that it is less then impressive in its series. Which begs to indicate that Nintendo haven’t a clue to appeal to its core audience, I mean what if Wii2 fails to capture the casuals again? Nintendo have already dug themselves a hole considering it’s now competing with Apple.
@pimko– good point about Killzone 3. Also, there’s the new SOCOM title, if it ends up being any good. What I like about the Move is that it precisely is a refinement of the often inaccurate “waggle” of the Wii. And as someone who owns a PS3 and a 360, buying Move for my PS3 IS cheaper than buying a Wii.
I suppose that one of the obvious consequences of using a framework is that you WILL overlook what doesn’t fit into the framework.
I actually never saw any data about these “casuals†who have a PS3 and do not use it. Could you provide me with the source, please? Also, WHY do they not use it? If these people already have a Wii – and use them – then chances are that they would NOT need to buy the Move after all.
The Move/Kinect are sustaining technologies in the sense that they built on the same set of values created by the Wii and Eyetoy. That’s not the issue here. The issue is that “motion controlled gaming†as a whole is the disruptive innovation in the videogame business and there is a new market formed around it. The reasons why Sony and MS are unable to go downmarket doesn’t have anything to do with how you label the Kinect/MS, but with the 5 reasons I mentioned above.
I disagree with you on Nintendo. I wouldn’t say that they don’t have a clue. Quite the opposite: the trouble I have with them is that they now know exactly what their fans want and are too afraid not to listen to them. The reviews you will find here on nightmaremode.net on Twilight Princess, Mario Galaxy and the like are all like that: we keep bitching these are all “the same game again†and Nintendo is choosing the expected mediocrity instead of the occasional greatness. Nintendo wasn’t the point of the article though. Maybe next time…
What complete Bullshit , you talk complete nonesense.
‘Microsoft’s Kinect most viable path is upwards, not downwards’. lol
Kinect is a joke, It’s basically an EyeToy, very limited device.
MOVE on the other hans is affordable, accurate, and has huge potential for both casual & hardcore.
Marty, Marty… the device itself is not important. What matters are the uses of such device. 😉
While talking about it, CAN Sony use its EyeToy to allow the user the same kind of interaction with its menu interface that the Kinect can? If so, what are they waiting for? That’s an idea worth selling! If not, you are the one talking nonsense.
While I agree that they’re both likely to fail, is the Wii really still considered a success in any other way except financial? The amount of games that actually use the controller in any way other than traditional are very few. I just shake my head about every 5 seconds playing MHIII thinking about how much fun could’ve been had if you actually did use the motion controls for your weapon.
If Sony and MS actually come up with inventive games that really use the controller, people might actually might buy it. It would take multiple great games that really use the features to happen, so not likely at all. More than likely all of this is just a warm up for features built in to their new consoles. Expect both to come with built in cams and expandable controllers.
Well, there are ways and more ways to define success. I think the Wii was one mainly because it is creating a new market and expanding the idea of gaming to new audiences.
If we are going to dispute the Wii’s control performance, then I agree: I still wish they were better and that games used it not so gratuitously. That’s to be expect, though. For non-gamers, the Wii controls are more than enough. Waggling, for them, works (after all, is there a more simple control input?). That’s to be expected though. We are the blue line at the chart I posted. Non-gamers are the red line.
As a bit of a Nintendo kid with a bunch of games on my Wii, you’re not far off the mark in the sense that third party developers are definitely still trying to pull off the motion controls as well as Nintendo’s own developers do. Metroid, Zelda, Mario Galaxy and Pikmin are all fantastic to play, but the only other game I’ve played that was as good as them control-wise was Resident Evil 4, and that’s a remake (well worth it though). Granted I haven’t tried The Conduit or De Blob yet, but there’s definitely a shortage there.
I think that once motion controls are an option on every console, we’ll see developers rising to the task a lot more than they are currently.
I suggest No More Heroes too. It’s my favorite Wii game. Sure, motion controls are only implemented as some kind of quick-time event required to finish off enemies – but boy, it is satisfying! 😀
We are coming up on 4 years for the wii being available. Whether Microsoft or Sony are willing to admit it, the casual gamer is very familiar with the wii and what it provides. If someone doesn’t own a wii they have likely played it at a friends house and the novelty has worn off. If they were still going to commit to buying a casual gaming console would they pick the ones that costs the most money or the least? Do they really understand the difference? This is a really hard sell.
“Sustaining technologies is about improving product performance. You hear what your customer wants and give it to them.”
Why isn’t the Move a sustaining innovation?
I think this article would be more relevant if the Move was aimed purely at casual gamers, like Kinect, but it isn’t. With support for games like Resident Evil 5, Heavy Rain, Killzone 3, SOCOM 4, Little Big Planet 2 and The Fight: Lights out – it already has plenty of hardcore appeal.
Alot of hardcore gamers were intrigued by the Wii before it released (myself included), but then it turned out it didn’t work as well as advertised. The wiimote/ nunchuck combination has already proven itself to be very well suited to some hardcore gaming genres (FPS, TPS games in particular), however it has also become evident that it is not accurate enough for some other hardcore genres (fighting, sports games etc). The Move appears to be more accurate than the wiimote and offers additional features with the PSeye. Therefore the Move is surely “improving product performance”.
But just who demanded Sony for motion controls? It certainly wasn’t their own customers. Speaking for myself as a hardcore gamer, I was still unconvinced motion controls could offer something that was clearly better than what the DualShock alone could do (although The Godfather II was kind of nice). You could consider Move sustaining if you see it as an evolution of the Wii – but the Wii attracts the non-gamer market and the non-gamer market is not a market Sony has any meaningful market-share in, i.e. these are not Sony’s customers.
These issues are all question about semantics though. What matters is that “motion controlled gaming” is a disruptive technology.
The Move is indeed improves product performance – but it is a product partially aimed at a market created by a disruptive innovation. Question is: does this improvement justifies the prices asked from non-gamers? Does this improvement finally reach the performance demanded by hardcore gamers? It is a tricky position: you are targeting 2 very distinct markets with different value hierarchies.
I disagree on the hardcore appeal. All these games are Move-enabled, but you can also play with them with the DualShock. Given the option, I would go with the DualShock. After all, after 4 years of Wii, I grew more resistant to my novelty impulses and I already know the DualShock is more than capable of delivering the performance I demand. In my opinion, Sony should not have given us the choice: it should be Move or bust!
I am a hardcore gamer, I bought the wii not long after launch for two reasons – I didn’t own an HD TV at the time (so HD input wasn’t on my agenda at the time) and I am a fan of sports games (Fight Night, Virtua Tennis, Pro Evo etc.), I was under the impression that the wii could revolutionise those types of games, it turned out that pro evo was the only one that delivered.
There were alot of hardcore gamers bought the wii at launch and ended up dissapointed by it’s limitations. Not just the hardware limitations but the controls just didn’t work as advertised, the sword fighting on Red Steel was my first dissapointment.
I am confident that the Move/ Nav combination will provide a better method of control than the dualshock for many types of games (FPS and TPS in particular), if this turns out to be the case then no hardcore gamer will be able to afford to go without Move when it comes to competitive online play. Traditional controllers are not best suited to FPS and TPS games, the need for the inclusion of aim assist on most of these types of games is evidence of this. Did you play RE4 Wii Edition? Did you notice how easy the game was on Wii compared to the last gen versions?
The wiimote/ nunchuck combo have made improvements over traditional controllers and the Move/ Nav combo look set to make further improvements.
@ Wh15ky
I’ve played RE4 for the Wii. It added a sense of urgency I liked, but maybe because I had already played RE4 plenty of times before, I stopped thinking about the control input in no time. Metroid Prime 3 was a much clearer improvement, since it was so much different than its predecessors.
I’m not sure if motion controls will prove to be better method of control than the dualshock for FPSes. If they really do, that won’t necessarily mean people will adopt it, because of an issue related to familiarity – just like the QWERTY keyboard is still widely adopted, even though there are other keyboard configurations proven to be more effective – although the novelty of the device itself may counter that factor. If the motion controls ARE better, in fact, so much better that people are willing to overlook their already established know-how of classical controllers, then yes, you are right: the hardcore game will adopt it.
Now I’m itching for some design of experiments, comparing data from players’ performance in online matches with different input method!
I very much prefered playing RE4 on Wii compared to on PS2. I haven’t played RE5 on PS3 yet, I downloaded the demo and didn’t like the controls, although they were very similar to RE4 on PS2 i just couldn’t go back to them after becoming so accustomed to the speed and accuracy of the controls of RE4 on Wii. I am, therefore, looking forward to playing through RE5 for the first time with the Move.
I do agree with your statement about Metroid Prime 3, it was the game that set the standards for FPS controls on Wii, I remember Medal of Honour-Heroes 2 released not too long after MP3 and, because of MP3, it was a huge improvement over Medal of Honour-Vanguard.
I don’t agree with your comparison to QWERTY keyboards, I’m not sure how much control the average consumer has over what keyboard configuration their laptop or desktop computer comes with or whether they are even aware that they have alternative options at all.
“Now I’m itching for some design of experiments, comparing data from players’ performance in online matches with different input method!” – I am very much looking forward to this too.
RE5 controls are troubled no matter the control input simply because Capcom was unable to grasp a logical inventory system for both single-player and co-op mode. When aiming, the biggest issue I have is not the aiming per se, but actually seeing the laser aim reticle. But then again, my Resident Evil tastes are all messed up probably. I mean, I enjoyed the tank controls! XD
The DVORAK keyboard uses less finger motion, increases typing rate, and reduces errors compared to the keyboard standard QWERTY when writing English. But although the option to use the DVORAK is there on any Microsoft, who would use it? That was the point of the comparison. You can make the change in 30 seconds. Here‘s how.
So, now the issues you’ve raised against the comparison were solved. Now YOU are aware of it and know how to enable it. Will you still use it? I know I won’t. I’m already too familiar with the QWERTY.
“So, now the issues you’ve raised against the comparison were solved.”
The issues I raised are not solved, we are not discussing whether or not I will decide to try a DVORAK keyboard configuration because you have suggested it is more efficient. I’m not much of a typist, most of my time at a computer is spent using a mouse for CAD and BIM software. Even though I am now aware of the DVORAK keyboard configuration, I don’t believe it will benefit me in anyway.
We are talking about mass adoption. How many computer owners are aware of the DVORAK keyboard configuration and it’s benefits, how many computer owners would it actually benefit? How many PS3 owners will be made aware of the Move and it’s features over the course of the next few months?
The DVORAK is not a product. The DVORAK is not supported by marketing. But it is just there. It doesn’t make sense to wonder how many people know about because unless people research it themselves, they won’t come across the DVORAK layout. That information won’t come to them on the TV. On the other hand, the DVORAK is a perfect example of a better feature that is not used simply because people are more familiar to the QWERTY standard. That was the point of the comparison. The issues you’ve raised tried to invalid the comparison with the awareness factor – however, EVEN IF you make people aware, they STILL won’t use the DVORAK. That happened to me. That happened to you (and the fact you said you are not a typist makes the DVORAK option even more attractive to you, since you are probably not as familiar with the standard keyboard as a typist like me). In fact, that happened to the 20 other Human Factors students studying top-down and bottom-up design at my class and I’m willing to bet it will happen to any typist know to whom you introduce the DVORAK. If you don’t type yourself, I invite you to try it with others. This experiment makes the awareness issue void.
My point is that familiarity is a big issue. In the DVORAK case, even though its performance is better, it won’t be used because people are already familiar to the standard layout. The Move has the novelty factor in its favor, but that novelty won’t be as strong as it was when the Wii first came out.
There are no meaningful comparisons that can be drawn, how can there be, when your comparison is missing the most important aspect – marketing. It’s the reason the Wii is such a success. It is the reason any product is a success. How can anything be a success if people don’t know about it.
You seem to think that because of your observations regarding the 20 students, that you have gone some way to prove that marketing is NOT the key to making something a success. Don’t you think these people just used their common sense, weighed up the pros and cons and realised it wasn’t worth it.
PROS: After spending time familiarising myself with the DVORAK configuration I may be able to type an extra dozen or so words per minute and my fingers will not have move as far to do so.
CONS: having to spend the time familairising myself with the DVORAK configuration then having to refamiliarise myself with the QWERTY configuration everytime I use a different computer.
CONCLUSION: Sounds too much hassle, think I’ll just stick with the QWERTY.
I have been gaming since the 80s, I witnessed the transition from joysticks to joypads and the evolution from NES style joypads to what we have today. Gaming has changed quite a bit since the days of the Atari 2600 (the first console I owned about 25 years ago) and it will continue to change. We are in another transitional period at the moment, motion controls are in there infancy and will only get better from here on. Do you honestly think that we will still be using a dualshock style controller to play video games on a TV in another 25 years time?
Ah… marketing! The silver hero of every argument, the Prince Charming of all predictions, the jack of all trades for any business! Just dump your money at the Marketing department and they will solve everything, perform any miracle and achieve the necessary number of sales! There are not troubled products, only troubled sales.
Marketing is just ONE of the reasons the Wii was a success – and certainly not the most important one. I believe the console’s different value proposition and price were the stuff that did the trick. In fact, it received an amazing amount of press cover from the regular press just because it appeared so unique.
Other products have failed, despite having excellent marketing campaigns. Remember the New Coke? It was a marketing triumph for a product that simply was not needed. What about the Cosmopolitan Yogurt, backed by the whole strength of the Cosmopolitan magazine? Hell, why go so far? I could simply drop the PSP bomb as a counter-example.
Can good marketing carry a bad product? Sure, it can. Just ask the movie industry. But that’s doesn’t mean marketing is magic answer for anything. I never said it had no influence into making something a success.
My comparison is related to products, not how product communication. Once you level the product communication, once you are sure that the consumer knows about both the DVORAK and the Move, the comparison is valid. It’s a scenario where marketing has already played its part and EVERYBODY is already fully aware of both items being compared as well as its advantages and disadvantages. This, again, is not the same as claiming marketing doesn’t play any part. Even in this scenario, tt sounds too much like a hassle to learn the DVORAK and then having to go back to the QWERTY, no? It’s the same thing with the Move. Won’t it be too much a hassle to learn how to improve your gaming performance on the Move (remember that this comparison is aimed at that the point you’ve originally raised, about the Move improving your performance) and then having to, as you put it, “refamiliarise yourself” all over again whenever you play a DualShock-only game?
I’ve been gaming since the 80’s as well. I’ve seen controllers change, but they were all evolutionary changes. Only now we have reached the point not only your fingers, but your entire body can used to input commands – and this method has not proven itself performance-wise when compared to the classical input method
… yet.
According to the disruptive innovation theory I exemplified in the original article, you will see that I do expect motion controls to prove themselves for hardcore gamers eventually.
But we are not talking about 25 years in the future, are we?
“Remember the New Coke? It was a marketing triumph for a product that simply was not needed.”
– Wasn’t New Coke blasted for not being as tasty as original Coke? Therefore the new product was not an improvement over the original. This counters the only comparison you managed to make with the keyboard configurations.
I don’t know anything about cosmopolitan yoghurt, did it offer anything unique? Was it particularily tasty? Are the main reasons for its failure not known? If they are known, can any of them relate to the Move?
“Hell, why go so far? I could simply drop the PSP bomb as a counter-example.”
– I’d say the reasons for the “PSP bomb” is the high price and the lack of AAA titles. Where as the Move is reasonabley priced and has a very promising looking line up of games. I can pre-order Move for £29.99 from Amazon and use it to play 3 games that I already own – Heavy Rain, Hustle Kings & High Velocity Bowling. I also have reasons to believe that at least 2 of these games will be enhanced by the Move.
“Even in this scenario, tt sounds too much like a hassle to learn the DVORAK and then having to go back to the QWERTY, no? It’s the same thing with the Move. Won’t it be too much a hassle to learn how to improve your gaming performance on the Move”
I don’t know about you but I don’t have much of a problem switching from the wiimote & nunchuck combination to the dualshock 3. The only problem is button configuration, but that problem exists when just using the dualshock every time I change from one FPS to another or one football game to another. I can only imagine that switching from one computer keyboard configuration to another would be alot more problematic.
Find a reason as to why a product failed then relate it to the Move. DVORAK didn’t fail because it is more effective than QWERTY. New Coke and Cosmoplitan Yoghurt didn’t fail because they were well marketed. Your comparisons, so far, are meaningless.
You pick little pieces from my reply apart and, by doing so, you lost all track of our argument.
This is not a discussion about why product A failed and B didn’t.
And no, I did not say the New Coke, the PSP and the Cosmoplitan Yoghurt failed because of good marketing. They failed DESPITE of it. Those weren’t comparisons, by the way. There were counter-examples. There is a difference. They were mentioned because by saying I was trying to prove that ‘marketing is NOT the key to making something a success’, you implied that marketing was the key to making something a success. It isn’t. If it were, these counter-examples of failed good marketing pieces wouldn’t exist.
So there’s that.
Now, back to the DVORAK. I agree that it didn’t fail because it was more effective than QWERTY. It failed DESPITE of it. I said it failed because people’s familiarity with the QWERTY.
Sure, you can say you don’t have much of a problem switching over to the Wiimote and I can say the same. But we are talking about something more specific here. As you put it, “no hardcore gamer will be able to afford to go without Move when it comes to competitive online play”, assuming it offers a superior performance. That’s when the issue of familiarly can become a hassle for the Move in the same way it is a hassle for many professional gamers who simply refuse to let go the keyboard+mouse combination and in the same way typists would simply refuse to let go the QWERTY.
So, for your conclusion that “no hardcore gamer will be able to afford to go without Move when it comes to competitive online play” to be true, the necessary hypothesis must not only be that the Move’s performance is clearly superior to the DualShock, but also that it is, in fact, so superior people will be willing to overcome their familiarity with the standard method.
My only comparison, the DVORAK, is valid. It shows a device that was not adopted simply because everybody was already familiar with the older method – even we people were aware of it and its benefits! This is not saying that the Move will fail because of people are already too familiar with the DualShock. This is saying that hardcore gamers who value performance above all things else have to see enough value in the Move to justify moving away from the established standard. If they don’t see it, the Move will fail to attract them.
So there was that too.
I really doubt Move’s performance will be all that. It might be adequate and even slightly better – but not incredibly better that no hardcore gamer can live without. My reasoning is stated above. I think that a better line of argumentation would be to say that the Move, while not incredibly better, it will better enough and more entertaining,/i> to use. Although I still believe that as long Sony doesn’t cannibalize the DualShock and force gamers to use it, it won’t appeal to the hardcore market. Hardcore gamers might have bought the Wii because it was novel and because of Zelda – but that novelty is not as strong as it was then.
“This is not a discussion about why product A failed and B didn’t.”
I know, I was under the impression that it was a discussion about why product A failed and why product B may go the same way.
“You pick little pieces from my reply apart and, by doing so, you lost all track of our argument.”
I haven’t lost track of my argument, you are the one that keeps straying when refering to these pointless comparisons and counter-examples. Here’s yet another confused example:
“That’s when the issue of familiarity can become a hassle for the Move in the same way it is a hassle for many professional gamers who simply refuse to let go of the keyboard+mouse combination”
-The keyboard+mouse combination is a fast and accurate method of control. That’s the reason professional gamers won’t switch. If a faster and more accurate method was introduced which meant gamers using the keyboard+mouse combo were put at a disadvantage, then I’m sure professional gamers would seriously consider making the change.
I have stated my reasons as to why I believe that the Move has potential to have hardcore appeal and therefore become a success – for example: it will be more efficient than the dualshock for some hardcore titles, especially shooters – you point then shoot just like your character on screen is doing.
You said: “My only comparison, the DVORAK, is valid. It shows a device that was not adopted simply because everybody was already familiar with the older method”
– I think gamers are alot more adaptable than you give them credit for. Mastering different button configurations can be considered a part of gamings appeal.
A keyboard configuration is complex, therefore there is only room for one standard configuration. I never said that the Move will replace the Dualshock, all I said was that, based on my experiences with the Wii, The Move will be better suited to some games and the Dualshock to others.
Just to clear things up – I also never said that marketing guarantees success, what I did say was that you need marketing to make a product a success and I never said that an advancement in product efficiency guarantees success either, all I meant was that it can be one of the reasons that a product is a success.
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“And no, I did not say the New Coke, the PSP and the Cosmoplitan Yoghurt failed because of good marketing. They failed DESPITE of it. Those weren’t comparisons, by the way. There were counter-examples. There is a difference. They were mentioned because by saying I was trying to prove that ‘marketing is NOT the key to making something a success’, you implied that marketing was the key to making something a success. It isn’t. If it were, these counter-examples of failed good marketing pieces wouldn’t exist.
So there’s that.”
– No, that’s not that. Your “counter examples” are as pointless as your comparisons. Marketing does not guarantee success but it IS the key to making something a success. A company can develop the greatest product of all time, but if they don’t market it and make people aware of it, it will not be a success. Yet “Can good marketing carry a bad product? Sure, it can. Just ask the movie industry.”
“Marketing is just ONE of the reasons the Wii was a success – and certainly not the most important one. I believe the and price were the stuff that did the trick.”
– How would people know about the “console’s different value proposition and price” if it wasn’t marketed?
“I really doubt Move’s performance will be all that.”
My opinion is largely based on the comparisons I made between the PS2 and Wii versions of RE4. Sure, that’s only one game, but it was considered by many to be one of the greatest games of all time before it released on Wii and the fact that I enjoyed it so much more on the Wii makes the comparison all the more significant. What are you basing your opinion on?
No, this is not a discussion about why product A failed and B didn’t. This often leads to a logical fallacy all too common among game journalists: post hoc ergo propter hoc, Latin for “after this, therefore because of this”. It usually happens when you compare products without a clear thought structure behind it. That’s why the article never bothers to say something like “The Eyetoy failed. So the Kinect will also failâ€. There may be coincidental correlation in that comparion but not causation. Instead, the article focuses on the structure.
And yes, you are right about the keyboard+mouse combination. I put my pants outside out up there. I meant that professional gamers resisted switching from the keyboard+mouse combination to the then new dual stick controllers. My bad, for the example was indeed confusing. Hope it is makes more sense now.
I’m over the fence about mastering different button configurations can be considered a part of gamings appeal. For example, I hated when Deadly Premonition ditched the standard “Left trigger to aim; right trigger to shoot†layout for no reason at all. I also hate whenever Konami switches the X to confirm O to cancel layout. I also hate when a button is replaced by a wiggle at the Wiimote. I like it only when there is a clear reason behind the change and the impact is easy to see.
I don’t disagree that the Move may be “better suited†for some genres and even new genres, but unless that “better suited†doesn’t translate into sales i.e. doesn’t “replace†the DualShock, then this won’t mean anything to the argument on whether of not the Move will be a hit or a miss. However, based on my experience with the WiiMotion Plus and my current proficiency with a standard controller (and here I prefer the 360 controller much more than the DualShock, because it gives the left analog stick a position that suits its importance better), and taking into consideration that it will take a while for developers to master its innovations, I really doubt Move’s performance will be all that, at least for this generation. Again, I really don’t think Sony should give us a choice in this matter.
I think that the only way I would agree that Marketing was a key factor to success (and not THE key factor, as you implied) would be if we assume “4Ps of Marketing†framework and say that a great “Pâ€roduct and a great “Pâ€lace, which includes finding the right new consumer, as well as the right “Pâ€rice are vital for any strategy to work. However, if we look only at the “Pâ€romation, the communication (which we still don’t know exactly how it will be carried out), then I disagree completely. I don’t believe a bad product that is unable to supply what its market demanded can succeed because of promotion alone, unless the promotion lies about it and bad word-of-month is prevented from happening. For movies, there is the issue that it’s a one-time experience. You be fooled once, but not twice. For products that are more expensive, our decision analysis processes are different as the chances for regret are higher.
Looking at my analysis through this framework, I claimed that EVEN if Sony and Microsoft are successfully able to communicate their products to their customers, they wouldn’t succeed because of issues with the 3 previous Ps (a price that’s too high for customers that do no require much performance, a product that isn’t able to supply the performance demanded by the mainstream market and the inherent difficulties of finding new market).
I’m not a big fan of the “4Ps of Marketingâ€, by the way. Well managed companies that followed this strategy to launch products to markets enabled by disruptive innovation still failed, because this framework doesn’t take into consideration 3 of the 5 reasons of why what goes up, can’t come down.
* Meanwhile, the counter-examples I mentioned show that the opposite is possible and are meaningful because of that. Just saying “they are meaningless†won’t do. You have to show me why these examples do not show that marketing is THE key for success, instead of A key for success.
I said marketing was just ONE of the reasons the Wii was a success and I stand by it. And yeah, anyone who’s willing to buy a console – whether he was subject to direct marketing in order to come up with this decision or not – is going to compare prices on way or another – no marketing is necessary. Not all communication that reaches the consumers is derived from marketing. News articles, friends, watching the product by themselves… all these things can also communicate the product’s value preposition to the consumer as well. Marketing is no miracle maker. EVEN WITH the best marketing around, these products still have to face the 5 reasons I mentioned above. Marketing is circumstantial. These reasons are not.
Apologies about the “if product A failed…” statement, I was under the impression that was the road you were heading down with your comparisons.
Remember the reason we started arguing about marketing was because I said a reason (aswell as the familiarity issue) as to why the DVORAK keyboard configuration has not replaced QWERTY is because not enough people have been made aware of it and it’s benefits. Therefore when I refer to marketing I am refering to all methods that a company uses to raise awareness of their product. You claim that news articles, friends and people following the development of products themselves are not derived from marketing, but they are. The reason for the various conferences throughout the year (E3, Gamescom, TGS etc) are for companies and developers to promote there upcoming products, this is a form of marketing.
Your counter examples are not the opposite to my claim that marketing is the key to success, they WOULD have been good counter examples if I claimed marketing guaranteed success, but I didn’t. A vaild counter would be an example of a product that became a success without any form of marketing.
When I say mastering button configurations are a part of gamings appeal, I am taking into consideration the fact that no two games control the same way yet most gamers don’t play the same game all the time, where as typing on a computer is the same no matter what software you are using.
As far as our opinions on the Move are concerned, we will just have to agree to disagree. I think the Moves only chance of initial success is its appeal to the hardcore and I think it will succeed in that respect. I do think that there are alot of casual gamers wanting a PS3 but they are waiting for the right price point rather than a wii-like controller add-on.
“I think that the only way I would agree that Marketing was a key factor to success (and not THE key factor, as you implied) would be if we assume “4Ps of Marketing†framework and say that a great “Pâ€roduct and a great “Pâ€lace, which includes finding the right new consumer, as well as the right “Pâ€rice are vital for any strategy to work. However, if we look only at the “Pâ€romation, the communication (which we still don’t know exactly how it will be carried out), then I disagree completely.”
– You seem to be trying to put words in my mouth again (or perhaps text in my comments). I have never said marketing is the ONLY thing required to GUARANTEE success, that is ludicrous yet that is what all of your replies and counter examples regarding my comments on marketing seem to imply. What I have said is that marketing is the key to success and I still stand by that statement.
“4Ps of Marketing†framework and say that a great “Pâ€roduct…”
– Yet bad products have succeeded because the “P”rice, “P”lace and “P”romotion have been right.
“and a great “Pâ€lace, which includes finding the right new consumer,…”
– I would say finding the right new consumer goes hand in hand with good promotion. Unless you’re refering to indentifying a gap in the market, if that’s the case then surely you can agree that not all successful products have succeeded because they have filled a gap in the market.
“as well as the right “Pâ€rice are vital for any strategy to work.”
– Yet great “P”roducts have succeeded alongside good “P”romotion even though they have been more expensive than their rivals.
“However, if we look only at the “Pâ€romation,…” – (at what point did I say ONLY marketing is the key to success?) – “the communication (which we still don’t know exactly know how it will be carried out), then I disagree completely.”
– Then give me an example of a product that has become a success without any form of marketing/ promotion. It seems to me that a product can lack any one of the 4 Ps you mentioned and still succeed, except for “P”romotion. The one thing (not the only thing) that any product needs in order to succeed is marketing/ promotion, therefore marketing IS the key to success. How can a product become a success if nobody is aware it exists?
Wh15ky, I’m sorry but my reply will have to wait. I was typing it up yesterday, but today my laptop is being silly and doesn’t feel like starting up. Besides, I think the HD may be corrupted. 🙁
And as any real engineer, I did’t have a back-up.
I’ll post it in this space as soon as I can either recover the data or *shrugs* type it all over again…
I promise!
Nice article. You’re on the right path. You’re apparently reading your disruption literature and applying it marginally well. I agree with your conclusion, and some of your reasoning. However, you made a few mistakes that you should not have made. I will point them out in the hopes that you will learn from them and make an even better article next time.
1) The PlayStation was not a disruptive innovation. It was a sustaining innovation. It was a massive graphical and sound-based improvement over the prior consoles from incumbents Nintendo and Sega. However, that was all that it was. Even the controller had more buttons. All signs of a sustaining innovation. Better graphics. Better sound. Faster processing. More storage. More buttons. You should have figured this out when you stated:
“Examples of sustaining innovations are the PS2, the Gamecube, the PS3 and both the original Xbox and the 360. All these products improved what their predecessor set out to do, delivering better graphics and more processing power.”
That was all the PS1 did.
This has been pointed out before. Allow me to introduce you to the Malstrom. Read his work, and digest it well:
“Was Sega a disruptor? They came out with many peripherals!
No. Sega relied on sustaining technologies. Sega had almost the exact same business model that Nintendo did.
Was Sony Playstation a disruptor? They had ‘mature’ marketing!
No. Sony, also, relied on sustaining technologies and directly competed with Sega and Nintendo. Marketing on MTV or elsewhere for Sony knew they were aiming at the same audience. Sony was carefully watching the 16-bit war between Nintendo and Sega. They knew that Sega did well because it marketed itself to teenagers (as the NES generation grew up). Sony took it to the next step.”
– http://malstrom.50webs.com/disruptivestorm.htm
In order for there to be a disruptor, an incumbent must be overshooting the market. The 16-bit consoles were not overshooting the market. The market could easily absorb the subsequent improvements from the SNES and Genesis’ pixel-based graphics, limited 3D capabilities and cartridge-based sound. Without overshooting there can be no disruption.
Smaller points: The N64 was indeed more powerful than the PlayStation, but the N64 launched a year later, so of course it was. Also, the PlayStation launched at $300 while the N64 launched at $200 (may have been $250). So the PlayStation wasn’t cheaper.
2) Naturally, since the PlayStation was not a disruptive product, its CD drive was not its disruptive innovation. The CD simply allowed for sustaining improvements: better graphics and sound. Sure, they were cheaper to produce, but that wasn’t disruptive.
“Was the CD a disruptor? It took Final Fantasy VII! OMG!
No. CDs are a sustaining technology in the game business. CDs, like game carts, used the same exact business model. While CDs were cheaper to make, they also held more data clearly putting them as a sustaining technology. Remember that disruptors come on the scene as ‘crummy products for non-consumers’. An example of a disruptive storage medium would be Internet streaming such as from flash games. It is a worse product but it is geared to non-consumers. Over time, the technology will improve and the disks will become cannibalized from the Internet.”
– http://malstrom.50webs.com/disruptivestorm.htm
3) A commenter above asked “Why isn’t the Move a sustaining innovation?”
The answer is that Move IS a sustaining innovation. It seeks to one-up the Wii remote improving upon the technology Nintendo used. That is why Sony keeps harping on “Z-axis” detection and other crap that doesn’t really matter.
You do not have a disruptive innovation simply because you copied a disruptive innovation a few years after it came out. That is why the Master System, TurboGrafx-16, SNES and Genesis were not disruptive products whereas the NES was.
The better answer, however, is that Move is a defensive co-option.
4) I would abandon use of the term “casual gamer.” There’s no such thing.
I always saw the “casual gamer” to be the new market the Playstation One created. Sure, some people were simply members of the NES generation that grew up, but those people would only be a fraction of the Sony’s market, no? I have no data to back me up, but back in the day I was surprised with how some people from my school that always mocked me for playing my NES, suddenly started buying PSOnes. Because they only played casually, that denomination made sense for me. That`s why I feel that was not only Sony’s marketing campaign but that there actually was a new market.
I think that the value the PSOne delivered and Sega and Nintendo didn’t was game variety, which was only possible with CDs for they could be produced at significantly smaller costs and with more flexibility. The storage space that allowed for games with an action movie feel was the cherry on the top to attract third party developers and allow the 2 values this new (?) market valued and couldn’t find at the other consoles: variety and price (game price, I mean). Meanwhile the Sega Saturn was starting to struggle in its attempt to go downmarket and Nintendo went upmarket catering more and more to its loyal fanbase. That’s how I used to see the situation anyways.
It is a sticky point, though. I don’t know how to prove anything I’ve said and I certainly cannot pinpoint what was the value being overshot by the 16-bit consoles at the time (quality of established franchises perhaps?). The only thing that could back up the claim that the PSOne was disruptive was its third-party based business model.
So yeah, I’m more than comfortable with the PSOne as a sustaining technology. It makes sense, despite the feeling I have that it did create a market. Thanks for the input! ^_^
“I always saw the “casual gamer†to be the new market the Playstation One created.”
Nah. “Casual” gamer is an excuse and slick marketing term that was created by this industry some time ago. Here, take a look for yourself:
http://malstrom.50webs.com/birdman.html
The PS1 didn’t create or expand the market. I’ll post more on this in a moment…
“I think that the value the PSOne delivered and Sega and Nintendo didn’t was game variety…”
BINGO. You win. You hit it on the head. Biggest game library = winner.
“The major change was Sony’s approach to video game consoles. Instead of focusing on a few, quality titles, Sony opened up the floodgates. The Playstation had the largest library of games than its competing consoles. However, most of those games are garbage. On the other hand, you never know where the next great video game is coming from. So by having a large library, this improved the probability of surprise hits. It also gave the customer a larger library to explore rather than looking to other consoles.”
– http://thewiikly.zogdog.com/article.php?article=59&ed=6&p=6
Continuing along…
“…which was only possible with CDs for they could be produced at significantly smaller costs and with more flexibility.”
You see the symptoms but you have not diagnosed the disease. With the N64, Nintendo still clung tight to its restrictive licensing requirements from the NES days which drove away third party support. Third parties couldn’t wait to get that noose off of their necks (not to mention get away from Yamauchi!)
Sega wanted to be Nintendo, so its licensing requirements were not much better. And the Sega Saturn had a CD-drive as well, so we can see that CDs alone were not the issue.
The issue was a combination of outmoded, strict licensing requirements and competition with first-party software. Remember the N64 Dream Team? Yeah, bad idea Nintendo. Third parties also certainly did not want to compete with Nintendo and Sega’s first-party offerings. Who wants to release a game that gets creamed at retail by Mario and Sonic? Instead, they flocked to a neutral hardware entrant who was not an integrated hardware/software developer. They would now be the premier offerings (Final Fantasy VII, Metal Gear Solid), not Nintendo (Ocarina of Time, Mario 64).
Have you ever wondered why the industry (such as EA) went out of its way to destroy the Dreamcast and to lockout the GameCube? Microsoft’s entry into the console market only gave third-parties a further wet dream because now TWO hardware (but not software) manufacturers would fight over them for exclusive rights.
“We want GTA IV!”
“No, we want it!”
“Let us have Final Fantasy XIII! Sony doesn’t deserve exclusivity!”
“Let us keep Final Fantasy XIV for ourselves!”
And this symptom is seen even more today as third-parties complain left and right “third parties can’t sell on the Wii!”
“It is a sticky point, though. I don’t know how to prove anything I’ve said and I certainly cannot pinpoint what was the value being overshot by the 16-bit consoles at the time (quality of established franchises perhaps?).”
Nah. Decline in quality can’t be overshooting customers’ needs. Overshooting involves giving customers more than they want, need or perceive a value in for the money. Failing do deliver a quality product (software) is a bad business decision, but not overshooting.
Not only was there no overshooting in the 16-bit generation, but there was no overshooting in the PS2 generation either. Customers could still absorb the graphical differences from the PS1 era.
“The only thing that could back up the claim that the PSOne was disruptive was its third-party based business model.”
Sony’s business model was very similar to Nintendo’s except its licensing requirements were less restrictive. Disruption requires an abandonment of sustaining strategies and the adoption of disruptive practices. Sony didn’t do this. Not to say its decisions weren’t smart at the time. They were.
But anyway, here’s the info you need:
“So what about the Playstation? Didn’t it steamroll over all its competition? The answer is no. The reason why the Playstation dominated the market was not due to competition but due to growth. The Playstation was the first game console to dominate all three major markets. The Playstation was the first global console. The NES was not global. The Atari 2600 was confined mostly to a single territory.
When you break the Playstation and Playstation 2 sales down by region, you find no difference than previous generations’ sales when accounted for population growth. This is why the household console penetration rate the NES achieved was 33% which is the same number of video game consoles today. The Playstation ‘grew’ the market not by making games ‘more mainstream’ as before (as is commonly thought) but by being truly global. Even now, Sony keeps trying to push where the Playstation can grow such as in nations like Russia. This global nature accounts for massive sales of the Playstation. It would be a mistake to misread those numbers as “making gaming mainstream†or “beating the competition for marketshareâ€.”
– http://thewiikly.zogdog.com/article.php?article=66&ed=7&p=4
“So yeah, I’m more than comfortable with the PSOne as a sustaining technology. It makes sense, despite the feeling I have that it did create a market. Thanks for the input! ^_^”
Very welcome! I await the results of Move’s launch next month (exciting time!). I expect it not to even break into the Top 10 for September (meaning no Move software will chart in NPD’s list). Kinect will die at retail.
I had one issue with Malstrom’s thesis. The first thing I noticed is that arguing on whether the segment is called casual gamers or just a generic ‘downmarket’ is a question of semantics. By the way, I refer to these gamers (attracted by the Wii and whatnot) as “non-gamers”. By “casual gamers”, I referred to the PSOne users – although if they are indeed fruits of Sony’s global strategy and do share all the characteristics of previous SNES and Genesis owners, then the term indeed loses its meaning. Then indeed saying Sony made gaming mainstream would be nonsense – Sony merely tapped into a suppressed demand.
I actually have been calling the now so-called “casuals” as non-gamers ever since the DS was announced (Iwata pretty much explained what was the plan with his “Back to Basics”strategy back then). I used to claim the PS1 and 2’s core market was made up from casual gamers even before that: when I debated at the Nsider forums about why the Gamecube was always struggling no matter what it did. But then came the game media and gave the “casual” label to my non-gamers, screwing up all the terminologies that I used… 🙁
My issue was the Featuritis curve. Firstly because it didn’t take value and different value structures into account, only features. But a feature can support any number of values, no? Secondly because I didn’t get why the angles of the slopes before and after the happy user were like that.
I do completely agree with his main point though: that downmarket users, if properly treated, will travel upstream – in their own market. There are also downmarket users from new markets enabled by disruptive innovation that may jump into the upmarket of the previous market, but I think these are very rare exceptions. Games like Mario Kart DS and New Super Mario Bros could be explained not by the Featuritis graph (which looked too arbitrary for me), but by the meeting of the new market’s supply curve with the old market’s demand curve.
His Imperfection Curve is also highly debatable, particularly when Malstrom falls into the ‘style over substance’ cliché to explain it.
Btw, what do you think of Kinect targeting even more upmarket users rather than downmarket users?
I don’t think Kinect is targeting users who are more upmarket than current 360 users. I don’t think it’s even possible with Kinect’s execution. If Kinect had some sort of video chat that put your face in a small box on the screen while playing online, then yes, maybe it could do so.
But since Wii is downmarket, and Kinect is trying to stop the Wii’s advances upmarket, Kinect is clearly a downmarket approach.
Kinect is in fact a growth-driven co-option. This is evident because Microsoft says Nintendo’s audience is not important and there are other markets out there. Microsoft also claims that Kinect will make gaming mainstream (yeah, right).
I think all signs point toward Microsoft attempting to move downmarket, not upmarket. Once Kinect fails, then they will retreat upmarket again. This is unlike Sony, who keeps saying “hardcore” this and “hardcore” that about Move and its games, I don’t see this from Microsoft. In fact, Microsoft made a statement somewhere that the “hardcore” games aren’t coming until next year. Meanwhile, Sony is paranoid about pissing its customers off. Microsoft, however, insults its own fanbase (http://www.gamerzines.com/xbox-360/news/hardcore-gamers-wrong-10-years.html).
I have a question.
When you were questioning Move and Kinect, why didn’t you ask yourself about the motivations of the disruptor compared to the motivations of the incumbents? You know, the “sword” and “shield” that stops co-option?
http://malstrom.50webs.com/shield.htm
http://malstrom.50webs.com/sword.htm
Well, the Kinect is obviously not targetting upmarket, but I wanted to know if you think it COULD. I mean, they received some pretty good response from gaming sites due to its dashboard-controlling features and having a device that can mimic the stuff from The Minority Report is something pretty sexy for the upmarket user. I believe that is Kinect’s only viable option, actually. The Flee to Your Bunker strategy
I did mention the asymmetries of motivation, which is the very idea that the downmarket has a different value structure than the value structure previously offered by Sony and Microsoft. The three “shields” Maelstrom mentioned (changing the relationship of families, TV and internet with gaming) could all be embraced and harnessed by Sony and Microsoft if they wanted to, but the problem still is that their PS3 and 360 consoles offer stuff the non-gamer have no value for, but charges for these stuff nonetheless – which is basically the main asymmetry of motivation related to low tiers itself.
Besides, when talking about asymmetries of motivation, you have to assume the disruptor is indeed competing in the low end of an established market the sustaining companies had originally no value for, instead of creating a new market created of nonconsumers. I saw that here is another point Malstrom and I partially disagree. He says the casuals have always been there for PC gaming so it’s not a new market per se, but I see that the Wii did eventually attract people not previously seen in those “hints” derived from PC gaming researches. However, because I believe these new consumers have the same value structure of the “PC gaming casuals”, the asymmetry of motivation of the low tier market will remain the same.
Ultimately, I believe Nintendo’s shield comes from the fact Sony and MS cannot launch a dedicated smaller and cheaper consoles just for the non-gamers and instead must rely on accessories for their already established and more expensive consoles.
Now, Nintendo’s sword to move upmarket would be something for another article. This article was written to enumerate the 5 structural reasons behind the inability of Sony and MS, as companies, to go downmarket. I think the 3DS is so far the best indicator of Nintendo’s attack, but considering they practically own the handheld market (both upper and lower tiers), I wonder what that can tells us about the Wii2. An even more interesting question, given we know nothing about the Wii follow-up, would be: will the 3DS over-supply its consumers and allow for a vacuum at their own low tier for another disruptor to come?
Btw, I have the impression Malstrom didn’t quite grasped the concept of asymmetries of motivation. He basically compares MS/Sony’s motivation vs. Nintendo’s, but that’s not how the term is usually defined. Asymmetry of motivations happens when the needs of a certain group of users are not met by incumbents for some reason (they may not represent too much profit, the stuff they want are not aligned with the incumbent’s capabilities, etc) so they are motivated either to exit or ignore this tier when the disruptor first targets these very users. In fact, incumbents are often happy to shed their least-profitable customers in search of higher-margin opportunities up-market.
That, of course, changes when incumbents realize how profitable that tier can be or when they see the disruptor moving upwards. That’s when they finally notice the water has risen up to their waists already. And the door out is locked.
I apologize if it seems like I didn’t answer your question of whether Microsoft could target the upmarket. I thought I did when I said, “I don’t think it’s even possible with Kinect’s execution.”
However, I didn’t answer your question in detail. I will try to be more detailed then.
In your article you suggest:
“For hardcore gamers, Kinect only becomes interesting when its scope goes beyond games. Again: it is easier to move up-market than down-market. Microsoft has the chance here to move even move up-market, by selling Kinect as a motion/voice sensing device that will show up in connected TVs, living room PCs, set-top boxes and other consumer devices, thus targeting a tech-savvy user willing to pay a premium for experimenting new technologies before everybody else.”
Let me backtrack before addressing this actually.
The question “Could Microsoft target the upmarket with Kinect” is a flawed question. Why?
Because the answer will be always be yes. Any company can “target” any market it wants. It is the same question as asking, “Can I sue this person for __________?” Of course I can. I can sue anybody I want. I probably won’t win, but I can file the lawsuit (until such a point as I am declared a vexatious litigant and have to gain permission from a court to file lawsuits).
Likewise, any company can “target” any market. There is no point in asking that question.
The proper question is “can Microsoft successfully target the upmarket?”
Based the quote I pulled from your article, I say “no.” The reason is Kinect’s execution, like I stated before.
Voice recognition and controller-free controls have existed before Kinect and have not caught on. “Clap on, clap off…” Remember that? Yeah, never caught on. Never saw one either.
No technology has been introduced yet to replace the TV remote. Kinect may be a neat technological device that can perform the same functions as a TV remote, but it’s nothing more than a mere novelty (an overpriced one at that) and it’s prone to problems not present in a TV remote. You have to stand up to play Kinect. But wait, you have to sit down to navigate the Xbox menu with it! But wait, you need proper lighting first! Oh wait, it can’t read your hand swipes correctly every time. Your friends can walk in the room and yell “Xbox shut down!” and ruin your gaming session in a hilarious real-world instance of living-room trolling.
Kinect makes it harder to navigate a menu, not easier. Even “hardcore” gamers aren’t interested paying a $150 premium to say “Xbox shut down!” They despise motion controls.
What we learn from Malstrom’s disruption chronicles:
“So why do disruptors nearly always win? Who is the master of the market? Is it technology? Is it brand? Is it marketing? Is it demographics? Is it innovation? Is it invention? Who is the master toward that these companies must bend their knees and kneel?…
It is the customers’ behavior. …
Consumer behavior defines the functionality that users can or cannot absorb. This is the red line on that graph. Technological progress is only good when it helps consumers. When it surpasses the red line, of consumer behavior, it has overshot the market. Then the market is ripe for a disruptor to appear. And this disruptor will bring new values to the market while being sufficient in the old values.
Voice technology is a cool technology. But remember, the master of the market is Human behavior. Will current voice technology eliminate keyboard typing? The keyboard is obviously technologically dated. The answer is ‘no’. A normal person, used to typing, is not going to give that up for current voice technology that is more error prone. It does not let the user kick ass. Until voice technology is less error prone, people will continue to use keyboards. However, places where keyboards are difficult to use such as mobile devices have a great future for voice technology despite its errors. As voice technology sells on the mobile systems, it becomes better and more sophisticated. Eventually, it rises through the tiers until it ultimately replaces keyboards. This would be how voice technology could disrupt typing.”
– http://malstrom.50webs.com/disruptivestorm.htm
So I say no, Microsoft cannot successfully target the upmarket with Kinect’s current execution. If it were to incorporate video chat (which we used to think was just around the corner for phones in the ’90s) then yes, it could somewhat. But who wants to pay $150 for a video chat feature? Webcams are a lot cheaper than that.
Let’s not forget that supposedly awesome Kinect features were shown to be outright lies such as scanning a skateboard and using it as an item in your game. A prominent developer even called this out shortly after the E3 2009 press video.
Microsoft’s only hope is to pawn off the device on current customers, but ironically, it’s based around games. They have to hope that Xbox gamers will want to play games with the device, and that’s a longshot to say the least.
Absolutely right. Kinect/Move just won’t fly. Because to use them you have to buy them an expensive PS3 or XBox. Yeah I’m sure they can sell their new motion control systems with the consoles in a “discounted” bundle, but it will still be too expensive for the casual gamer. And Sony’s and MS’s main marketshare–hardcore gamers–are mostly button mashing couch potatoes who will probably only use motion controllers in a social or party setting.
I know both sides. I’m a former “hardcore” gamer, who is now a casual gamer. I was a “hardcore” gamer when I was in my teens and 20’s. I used to play RPGs a lot. But now I’m in my 30’s and married with kids. I don’t have as much time to play video games as I used to. Besides, given a choice, I’d rather spend time playing with my kids than video games. I would still like to play RPGs…but unfortunately they need you to invest lots of time and effort in playing them. So these days I happily play casual games on my Wii. No serious amount of time/effort required. A quick round of golf, sword play, canoeing, etc…and I get some (needed) exercise and have great fun. I love the motion controls. Back in my button mashing days, I sometimes used to move my body/controller in a desperate effort to better control delicate jumps. Now you can literally do that with Wii. hahaha…so us geeks who moved themselves and controller to (desperately) try to better control action on screen were (technically) ahead of our time. 🙂 It’s an affordable home VR system that anyone can use.
However, I do have a “devious” plan to eventually play RPGs again. As my kids get older, I will teach them more complex games (ie: RPGs), and when they are in their teens I can play RPGs with together with my kids–that way I spend (quality) time with them while playing RPG games. My wife probably won’t like it with me and the kids spending hours in front of the TV, but I’m sure it’ll be fun. hahahaha.
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Many times public just can’t think of anything else than the routine stuff. At such times innovative things fail. This is truly disappointing. But the marketing of such innovations should be strong enough.
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