Friday, November 27, 2015

Blue Ocean Strategy in Wii Gaming

Blue Ocean strategy aims to create “uncontested market space” versus the traditional “competition-based strategic thought” associated with red ocean strategy (e.g. Porter’s Five Forces).

            Where the five forces desires to incorporate strategy techniques into the existing market, blue ocean strategy aims to form an entirely new market. The creation of the Wii gaming console is a prime example of blue ocean strategy put into action. The following aspects of the four action framework, as they relate to the Nintendo Wii gaming console, are highlighted below:

·       Creation. Wii has created exclusivity on Nintendo games. A con of this feature of the blue ocean strategy, with application to this particular case, is that by creating market-differentiation in this manner, it currently seems as though Nintendo and Wii have an unfair relationship. While Ninetendo is unable to create games for any other console, Wii is curtailing it’s opportunities to maximize its profit by not accepting games from other software companies, such as Blizzard and Bethesda.
      Reduction. Wii reduced costs by eradicating features that are typically included in other consoles (i.e. low processor speed).[1]
    Elimination. Typically, this generation of play-station possesses subscription prices to promote online, user-to-user gaming. The Wii has eliminated these subscription costs in their current model. However, this reduces the commonality of multi-player gaming amongst Wii users. It can be argued that by not emerging itself in the competitive market of online-gaming it has limited its profitability.
      Raise. Wii approached the gaming world capitalizing upon the lack of family-friendly game consoles available. 
Based on the current example, it is difficult to determine whether the ocean blue strategy is the appropriate strategic-approach in the case of Nintendo Wii. Though it has proven to be successful in shaping a new market in the field of gaming, it is difficult to determine the future of the firm in its new market.

Perhaps due to limited exposure to blue ocean strategy, I am not yet convinced that this particular approach is indeed risk-minimizing. By delving into new market territory, this creates a lot of pressure on firms to ensure sustainability.

[1] Osterwalder, Alexander. "Nintendo's Blue Ocean Strategy: Wii." Business Model Alchemist. January 5, 2007. Accessed November 26, 2015.

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