Nintendo’s Blue Ocean washes over Sony

“The overriding focus of strategic thinking has been on competition-based red ocean strategies …. To focus on the red ocean is therefore to accept the key constraining factors … and to deny the distinctive strength of the business world: the capacity to create new marketspace that is uncontested” (Blue Ocean Strategy, p. 6 – 7).

We’ve periodically highlighted the success of Nintendo’s highly-popular Wii game phenomena, which came about through Nintendo’s Blue Ocean Strategy thinking. However, we recently came across an article which illustrates what happens when a company is more inclined to cling to the familiar shores of red oceans, rather than to swim towards Blue Oceans.

Sony, one of the top three players in the game console market, recently announced that its cutting the price of its Play Station 3 in the US by $100, in an effort to spur sales of the struggling video game console. While analysts anticipate that Microsoft, the industry’s other dominant player, may likely follow suit in reducing prices of its Xbox consoles.

Meanwhile, Nintendo, having redefined the market and converted new generations of video game enthusiasts, continues to ride the wave of its Wii success. In fact, just last month, sales figures showed that in Japan the Nintendo Wii outsold the Sony Play Station 3 on a scale of 6 to 1.