Nintendo Wii and the disruptive power of brands
Michael Urlocker deftly summarizes how the Nintendo Wii is disrupting the market-leading Sony PlayStation. The lower-priced Wii is flying off the shelves, outselling the PS3 by 60% in the U.S. Significantly, it has helped raise Nintendo earnings 43%.
Beneath the surface this is a brand story, too, but first let’s look at the six disruption lessons that Michael gleans from the Wii’s stunning success:
- Nintendo’s market disruption is not about better technology;
- Disruption is not about incremental improvements;
- Disruption is about understanding where the customer experience is not good enough;
- Disruption is about making a product more accessible;
- Disruption is about changing the basis of competition;
- Disruption is about a new business model.
These are all excellent points. And while it may not be obvious at first glance, most contain a strong brand element, because a key focus of brands is to put more customer in the product. Do this in the right places, and your new product can marshal the power of customers behind it—with disruptive impact.
Brands activate customers
Through brands, you’re not just selling a better-packaged product. You’re activating customers. It’s this activation that has disruptive power. The Wii raises customers off the couch and into the action sphere of the game itself, redefining game space, and redefining the very role of the player.
Brands have disruptive power
Where the above list uses “disruption” you can just as easily put “brands.” Brands have disruptive power too, if companies choose to use it. Brands can create new customers by freeing them from existing market constraints, and by then advancing customers to higher levels of experience. In this context, the strength of a company’s brand depends on how much customer the company wants to put inside the product. When you put enough new customer in, you can break the mould (and hold) of a market leader.
Choose your brand model carefully
You might call brands such as these, “disruptive brands,” but it really comes down to the brand model you employ. Brands that liberate their customers from boring, low-level experience may find they have a new market to themselves without trying to be “disruptive” at all.
With the right brand model, brands can free customers to disrupt a market for them.
Unlocking brand value
What’s especially evident is that brands can exert disruptive power without out-spending or out-shouting their competitors. Brands are able to do more with less because they can capture value from customer experience. The Wii does not have the super high tech profile (and cost) of a PS3. It simply frees customers to experience gameplay in exciting new dimensions. It creates market value by unlocking experience value—that’s been bottled up inside the customer.
Nintendo’s brand vision
I’d also say that Wii’s success is testimony to the quality of Nintendo’s brand vision. We define brand vision as a company’s ability to see its future through its customers’ eyes. That’s not always easy, but that’s what Wii seems to do rather well.