Nintendo: Disruptor Being Disrupted
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ALI FARHOOMAND
NINTENDO: DISRUPTOR BEING DISRUPTED
In February 2011, Nintendo released the next evolution of the DS line of handheld gaming devices in Japan: the Nintendo 3DS. It was an auto-stereoscopic device that allowed users to view three-dimensional (“3D”) images without wearing 3D glasses. Despite initial rave reviews of the new device, sales figures were much lower than expected. In July 2011,
Nintendo announced that it would reduce the price of 3DS by 30%1 to boost sales. At the same time, Nintendo president Satoru Iwata declared salary reductions for all of Nintendo’s directors, starting with a 50% cut of his own salary.2 In October 2011, Nintendo predicted that the net loss for the year ending in March 2012 would be US$264 million, a first in the company’s 30-year history.3
To get the results you want, you need a measure of good fortune. After all, just because you did the right thing doesn’t mean everything will work out.
That’s true for what people are going to think is fun, but it’s even more true for whether or a product is going to be a hit—there’s always a large factor that you simply can’t control.
- Satoru Iwata, president of Nintendo Co, Ltd4
Did fortune really play a role in the poor reception of the Nintendo 3DS as Satoru Iwata had indicated long before its release? Was another disruptive innovation5 the “large factor” that
Satoru Iwata referred to? Did Nintendo do all the right things before the launch of 3DS? Even if it did, as Satoru Iwata said, this might not guarantee success. Back in 2006, the Nintendo
Wii disrupted the video game industry, and in the following years, Nintendo was disrupted by
1
Nintendo Press Release (28 July 2011) “Nintendo 3DS Price Drops to $169.99, as Great Value and New 3D Games Come
Together”, http://www.nintendo.com/whatsnew/detail/fttgI7OsQIB1tZqRMa5CtT45KLrmNkAY (accessed 12 December
2011).
2
Iwata, S. (29 July 2011) “Financial Results Briefing”,
ALI FARHOOMAND
NINTENDO: DISRUPTOR BEING DISRUPTED
In February 2011, Nintendo released the next evolution of the DS line of handheld gaming devices in Japan: the Nintendo 3DS. It was an auto-stereoscopic device that allowed users to view three-dimensional (“3D”) images without wearing 3D glasses. Despite initial rave reviews of the new device, sales figures were much lower than expected. In July 2011,
Nintendo announced that it would reduce the price of 3DS by 30%1 to boost sales. At the same time, Nintendo president Satoru Iwata declared salary reductions for all of Nintendo’s directors, starting with a 50% cut of his own salary.2 In October 2011, Nintendo predicted that the net loss for the year ending in March 2012 would be US$264 million, a first in the company’s 30-year history.3
To get the results you want, you need a measure of good fortune. After all, just because you did the right thing doesn’t mean everything will work out.
That’s true for what people are going to think is fun, but it’s even more true for whether or a product is going to be a hit—there’s always a large factor that you simply can’t control.
- Satoru Iwata, president of Nintendo Co, Ltd4
Did fortune really play a role in the poor reception of the Nintendo 3DS as Satoru Iwata had indicated long before its release? Was another disruptive innovation5 the “large factor” that
Satoru Iwata referred to? Did Nintendo do all the right things before the launch of 3DS? Even if it did, as Satoru Iwata said, this might not guarantee success. Back in 2006, the Nintendo
Wii disrupted the video game industry, and in the following years, Nintendo was disrupted by
1
Nintendo Press Release (28 July 2011) “Nintendo 3DS Price Drops to $169.99, as Great Value and New 3D Games Come
Together”, http://www.nintendo.com/whatsnew/detail/fttgI7OsQIB1tZqRMa5CtT45KLrmNkAY (accessed 12 December
2011).
2
Iwata, S. (29 July 2011) “Financial Results Briefing”,