Nintendo is back at no 1 again. According to this article in CNN Money, which analyzes why Sony lost -
“There are a number of lessons we can glean from this — not just for the future of videogame consoles, but the future of consumer electronics. Decades from now, PS3 vs. Wii will be remembered as a cautionary business tale: how pride, politics, and an overabundance of technology can blind you to the simple truth of what consumers want.”
While Sony chose to make its Play Station more powerful and more feature rich, Nintendo concentrated on usability and cost. As the article says -
“Why change something that is already installed in 200 million homes worldwide? Answer: because there are more people in those homes that don’t play games, and hundreds of millions more homes to win over”.
The article further comments on Sony’s and Microsoft’s strategy of adding more and more technology-
“You buy them for the games, but once inside your home, they take over your life. They become the brains of your TV, your entertainment center, even your main communications device with IP telephony and chat functions. They converge all your technological needs in one box. (Microsoft, at least, didn’t assume that we would only want to use its technology in this converged device; it allowed you to plug in your iPod to the Xbox 360.)”
While Nintendo’s strategy was -
“…. When you buy a videogame console, the company says, you want to play games. Period. A console is not a Swiss Army knife. It makes sense to squeeze more functionality into your cell phone because you carry that device around everywhere. When it comes to the interactive fun box in your living room, however, it makes sense to simply make that more fun. If you want a DVD player, you’ll buy a DVD player. “
While Sony and Microsoft sell their gaming consoles at a loss, Nintendo actually makes profit on the sales. Sony is paying for forgetting what the customer wants.
This is how it typically works. Initially, when products come onto the market, they all look alike. In order to differentiate their products, manufacturers add more features. It is these features that differentiates the products in the market and help gain market share. However, if you take this strategy too far, it back fires. But, the question is – ‘how to decide when to stop?’. It is not easy to decide when to stop. Sony, apparently, did not know where to stop.
In his book “Design of Everyday Things”, Donald Norman talks about “technology paradox”. He says products follow a ‘U’ shaped curve. When things are complex, a new technology helps to bring it down. However, once the complexity is brought down, more and more features are added which makes it complex again and the cycle repeats!..