Create the markets of tomorrow

In the early 2000s, Nintendo was relegated to third place in the game console market, behind Microsoft and Sony. Nintendo’s leaders then made the decision to develop a radically new game experience. What if video games weren’t mainly a solitary pursuit, but became an opportunity to have a good time with friends and family? What if, rather than focusing on the virtual world, emphasis were placed on the physical experience surrounding the game? Around the same time, a new technology—MEMS accelerometers—had appeared on the market. Nintendo took this technology and applied it to create the Wii controller, which conveys directives to the game console based on the player’s position and speed of movement. Just six months after its release in 2007, the Wii registered sales twice that of the Xbox and four times that of the PlayStation.

What happened to enable Nintendo to come up with the Wii? The company certainly took advantage of a technological innovation in adopting MEMS. Yet Sony and Microsoft also had access to this technology, and didn’t design a novel experience with it. Nintendo definitely had great people. But Sony and Microsoft also had unparalleled creative talent at their disposal and an excellent understanding of the needs of their customers.

There’s no simple answer to this question, of course. However, a look at similar types of radical innovations reveals some commonalities, starting with the fierce desire of company leaders to invent tomorrow’s applications by distancing themselves from existing markets. And, to accomplish this, they conduct truly fundamental research, far removed from prevailing innovation approaches concentrated primarily on incremental innovation.