Nintendo, S curves and S-ranks: The Gaming World's Innovating Elite

April 25, 2018

OK, before I get into the gaming-relevant part of this article, let’s have a little bit of innovation theory. Go on, you know you want it. It’s also quite important to have this information in the back of your head. It will be worth it — I promise.

What is innovation? One definition is that it is the process of translating an idea into a new product, service or experience that creates sustainable value for the end user (the gamer, in terms appropriate for us) and the business provider (Nintendo, Sony, Microsoft and so on). This will be inspired by the needs of the user, technology possibilities and the business opportunities available. So in essence, innovation in the context of videogaming is giving the gamer what they want, where allowable by available technology (it’s a Venn diagram!), as long as it also enables a company’s end goals to be met. Sounds fair enough.

Innovation is not a discrete thing, either. It exists on a spectrum. I think it’s worth taking a look at the spectra as a whole, end to end, before we head into the meat of this thesis:

These sorts of things are always better when coloured in with examples. An incremental innovation would be going from a PS4 to a PS4 Pro, or an Xbox One to an Xbox One X. You take something which works and improves it across various vectors — CPU power, GPU power, RAM, resolution output and so on. A transformational innovation of recent times could be where the Kinect was incorporated into the main console at the Xbox One’s launch, rather than as a separate brick.

Something game-changing is the introduction of 3D gaming — still the same thing but with a whole new way of making it cool. Democratising is perhaps the hardest to describe, but it’s bringing something to more people. A recent example of this might be the Xbox Games Pass — a flat fee bringing the opportunity to play many more games than would otherwise be manageable for your ordinary gaming hobbyist. The right-hand side of the spectrum is the creation of a new market; a new way to consume gaming. VR is an obvious example here, or portable gaming from back in the day.

What each of the last three types of innovation have in common is that they are disruptive. They are not just iterating on what’s out there, but creating something different, new and exciting which if done well makes folk stand up and think “oooh!”. The former are examples of incremental innovation. Both incremental and disruptive innovation are important, and can lead to the same end result — delight for the gamer and the business. Neither is mutually exclusive, either. One, or both, can form part of a company’s strategy if they believe it’s the right way to meet their ultimate objective(s).

The console arms race — the push to up the polygons and megaflops — is incremental innovation. Sony and Microsoft who play this game are extending the S curve that exists today. An S curve is a way to think about any kind of innovation, and specifically its lifecycle. In this case we’re talking about the overall power of a machine as the innovation, even though processing power as a concept is ages old and probably doesn’t seem like an innovation.

Nintendo long ago jumped off of this curve. They made a strategic choice. They decided they couldn’t win this game, or perhaps there wasn’t enough value in it for them, or they just didn’t think it was the right way to go about their job of making something great for the gamer. It was with the Wii U, after the GameCube, that they went their own way with their own, new, S curve. With the Wii the innovation was motion control. This was game-changing — a new vector. The launch of the Wii was its emergence, and the Wii’s lifetime sales show the ascent. Maturity is probably when the PS Move and Kinect came into play. The demise of the Kinect and the fact that Sony seems to have forgotten the PS Move exists (except in the context of VR — and that’s another story) suggests we’re well into the decline phase of that particular innovation. There’s little to no value there.

With the Wii U, Nintendo was trying to create another S curve, but their execution was poor. This was fixed with the Switch. What is the innovation? What’s the new S curve? Home and portable gaming as one. I think here we have something which is transformational — there is no trade-off between home gaming, and gaming on the move. They are one and the same, so folks who really want to play that amazing new Zelda on the tube, or kick angel and demon butts on their lunch break, as well as make sure they get the same experience folks are on their big TVs, can all do so. But it’s democratising as well. More people can play the games they want to. There is no choice between a mains-powered machine and the battery operated alternative. You don’t have to pick one or the other if you only have the cash for one. You don’t have to say “I’ll pick that one despite the fact I’ll miss out on the latest Mario game”. More people with the advent of the Switch will play more of the triple-A games; fewer people will be missing out.

Only Nintendo does this. They once more own the space — the S curve is theirs alone to own and drive and win with, for now, at least. Nintendo innovates outside of the box more than any other games company. They disrupt the market and they improve where there’s value. Nintendo is the company which hits the S-rank time and time again from the start, rather than getting there after starting with a C+ and slowly, and incrementally, making their way to that elusive S. Nintendo truly is the gaming world’s innovating elite.

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Luciano Howard

I've been gaming for 30+ years on the Commodore VIC-20 to the Nintendo Switch and most things in-between. I enjoy all kinds of games but if I had to pick a couple right now, I'd say I adore Mario and love Dark Souls. I can talk about either ad infinitum...