Nintendo

"Shigeru Miyamoto, the eminence grise behind the Nintendo Wii. This extraordinary man (he is predominantly a game designer, not a marketer) describes the thinking behind the creation of the Wii— an incredibly brave decision which involved (in BBH parlance) making a massive zag where XBox and Sony had both zigged. His thinking ran as follows. 1. In Darwinian terms, if all three gaming platforms adopt the same strategy — that of pursuing ever greater graphical realism through increased processor power — it essentially creates an insane arms race between the three contenders. This in turn will lead to an absurd market eco-system — rather like a prehistoric world only inhabited by three large, carnivorous dinosaurs with nothing to eat but each other … and no mammals or other life forms of any kind. Platforms would become increasingly expensive, indeed prohibitively so for all but the most committed gamers. 2. In any case, Miyamoto felt the other two platforms were too fixated by the opinions of hardcore gamers and their preoccupation with power and graphics; in obsessing over this core market, they had overlooked the potential to grow the overall market for games via people who actually had jobs, children, lives, etc. The kind of people who would occasionally break from gaming to visit the lavatory. Through this he came up with the wife-o-meter — measuring each aspect of the Wii against the simple question: how much more likely would this be to encourage my wife to become a gamer? (To defuse the cries of sexism, I should point out that Mrs Miyamoto is not a doormat, she is formerly a senior executive with Nintendo: it just happened that she was hitherto not into gaming; wife-o-meter is furthermore an inexact translation from the Japanese.) In other words Miyamoto adopted a very simple approach to innovation: let’s not obsess about enthusing an existing market — instead, let’s create a new one. It’s a simple approach. One which says: “To hell with your core target audience — you can usually afford to take them for granted anyway — and instead let’s use innovation to look for business elsewhere.”"

"Changing consumer preferences. Over time, customer preferences may vary in a way that undermines the value of Branding. Nintendo developed a brand for family-friendly video games. However, as the gaming demographic evolved from predominantly children to adults, there was a shift in demand for more mature games. Nintendo’s Branding did not extend to this segment with the attendant negative impact. In terms of the Fundamental Equation of Strategy, the attractive differential margins (m) achieved in the M0 of the children’s segment would elude Nintendo in the adult…"

"Around the same time, Steve Jobs needed a head of graphics, as Apple sought to design its own chips for next-generation iPhones. He’d narrowed his sights to Bob Drebin, a former Pixar engineer who’d done pioneering work for Nintendo and been the graphics technology chief at AMD, a chip designer. When Jobs heard he’d entered early retirement, he called him up with a job offer. Drebin demurred, saying he wanted a year to spend time with family and focus on hobbies like sports photography. “Okay,” Jobs said, hanging up the phone. Three hundred and sixty-five days later, Drebin’s phone rang. “So, you ready?” Jobs asked. Drebin accepted."

"However, at Casio, Son was treated coldly by the section manager and was thoroughly disparaged, which left him feeling dejected. At Sharp, he was subjected to rather pointed questions by the person in charge. Although the feeling from his first choice, Sharp, was not bad, there wasn’t an optimistic sense that they would immediately sign a contract. There, Masayoshi Son devised a plan and called from near Osaka’s Umeda Station to the Osaka Patent Attorneys Association to investigate a patent office strong in dealing with Sharp. Fortunately, he was introduced to Patent Attorney Nishida of Nishida Patent Office, who was formerly with Sharp’s patent department. He immediately visited the office to confirm whether Son’s invention was worthy of a patent. Subsequently, he was informed about two key figures at Sharp: Executive Director Shosuke Sasaki, who was then the director of Sharp’s Central Research Laboratory (later VP of Sharp, advisor at SoftBank), and Deputy Head of Technology Atsushi Asada (later VP of Sharp and chairman of Nintendo). Son immediately asked for help. “Please call those two and tell them they should meet me.” The director called and said: “It sounds like an interesting device. At least try meeting him.” The next day, Masayoshi Son called Sharp to arrange a meeting, and together with his father, who was urgently summoned from Kyushu, he visited Sharp’s Central Research Laboratory in Tenri City, Nara Prefecture. At the time, still a 21-year-old student, Masayoshi Son thought he needed his father’s presence lest he not be taken seriously when it came to signing the contract. His father gladly accompanied him on his son’s first business venture. However, all negotiations were conducted by Masayoshi Son. The successful experience of negotiations at this time gave Masayoshi Son a significant confidence boost in launching and conducting business in earnest. In that sense, it became “Practice Session Number One” in negotiation combat for business selling."