Disruptive Forces: Nintendo

 
 
By Chris Gonsalves  |  Posted 2008-03-27
 
 
 

Nintendo

Location: Kyoto, Japan

CEO: Sartoru Iwata

Revenues: $7.8 billion

What they do: Nintendo has been around for 130 years and has spent most of that time making playing cards. But it’s the company’s video games that made Nintendo a household name.

Disruptive qualities: Relegated to the niche handheld gaming market in 2001 when the GameCube got trounced by Sony’s PlayStation and Microsoft’s Xbox, the company came back strong with the Wii, a console focused on family fun and interactive games that feature Nintendo’s cutting-edge motion-sensitive controller. The Wii outsold both its competitors last year, largely by attracting new gamers and their parents and grandparents.

The tech that makes them tick: The real innovation in the Wii fits in both hands. Wii remotes enable games that incorporate lifelike throwing, swinging and hitting movements and, dare we say, actual physical exercise. In fact, the console’s wireless input devices are so popular that they’re getting the attention of developers outside the game industry. Cynergy Labs’ Project Maestro, for example, uses Nintendo controllers to let users navigate Windows applications without a mouse or touch screen. Other efforts in the works include interactive whiteboards and using Wii remotes to allow users to control their computers with head movements.

Who they are disrupting: Nintendo is battling Sony and Microsoft in a worldwide gaming market that is quickly approaching $50 billion annually.

Going on tilt? For all its technical prowess, Nintendo failed famously this past holiday season when global demand for the Wii outpaced supply. The company sold more than 20 million units worldwide, but lost out on an additional $1.3 billion in sales due to shortages, analysts said. Lesson: Projecting market demand and matching it to the supply chain is always tricky.

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