Nintendo's Game Changer

Disruptive Technology is a concept distinguished from a sustaining technology. While sustaining technologies are changes in a product or market that improve or revolutionize a service that existing customers use, a disruptive technology is an amendment that is not designed to directly meet the needs or desires of existing customers. The implementation of disruptive technology is important because a competitor may seize the opportunity that gains the attention of new customers not originally considered in the former product models. The Nintendo case is the perfect example of the use of disruptive technology to increase a company’s market share by reaching out to consumers that are not regular buyers of certain types of products. In “Business Driven Technology,”, the difficult balance of the use of disruptive and sustaining technologies is referred to as the “Innovator’s Dilemma.” It is important for developers to maintain a certain level of consistency to keep existing customers excited about new products while introducing disruptive technologies to expand their consumer base (Baltzan, pg 183). When looking at Nintendo’s use of disruptive technology, we can see that it was necessary for them in the most recent generation of game consoles. Nintendo’s competitors, Sony and Microsoft, were newer entrants to the video game market and had very high-energy, loyal customers. The PlayStation 3 and Xbox 360 were straight examples of sustaining technology, more powerful versions of their previous models. Nintendo’s Wii had a completely different approach directed by President Iwata after looking at market trends. Iwata studied projections that showed Nintendo’s waning market hold, even in Japan. This is why Iwata decided to disrupt the market somewhat. Instead of staying on the same track of every other manufacturer, he wanted Nintendo to branch out to new consumers. His vision was to target “casual gamers.” The less technologically impressive Wii was able to

References: Baltzan, Paige (2013). Business Driven Technology, Fifth Edition. Pages 182-184. Farhoomand, Ali (2013). Nintendo’s Disruptive Strategy: Implications for the Video Game Industry.