DICE: Reggie Talks – “Innovate Or Die”

Nintendo’s Reggie Fils-Amie, opened the Dice Summit in Las Vegas with a talk on Nintendo’s approach to expanding the market for video games. He noted that portables saved the holiday sales in 2005. And that the market for video games grew in Japan for the first time since 1997, thanks to strong sales of portable hardware and software.

He noted that nine titles on the DS handheld topped 1 million units sold. Nintendogs has sold 1.5 million units in the U.S. alone and the female customer is a huge driver of sales. Nintendo targeted ads to magazines such as Seventeen and Teen People to drive sales. Brain Age and Big Brain Academy have appealed to older gamers who have never played video games before. About 2.5 million copies of both titles have sold in Japan. Brain Age launches April 17 in North America, and Big Brain Academy is slated for May.

Imagine your parents playing a video game,” he said. “Imagine 60-year-olds getting into gaming for the first time.” He noted how this would address political problems about violent games.

He said WiFi wireless networking on the DS through 7,000 McDonalds outlets has been a big success. More than 21 million connections have been made through WiFi. And with Metroid Prime Hunters, DS owners will be able to launch voice-over-Internet-protocol talk sessions with their friends before and after they play the game on a wireless network.

Nintendo will also create new DS Download Stations in thousands of retail outlets. DS owners will be able to use WiFi to download demos and trailers, and keep them while their DS is turned on. It could drive more traffic to retailers, Fils-Amie said.

Fils-Amie noted that Nintendo’s approach to expanding the game market reaches beyond the core gamer. He said he hopes Nintendo will lift its average age from 16 to higher numbers for the Revolution console launching this year. And with the new remote-control-like controller, it will appeal to nongamers with new kinds of games. Nintendo’s strategy is based on the ideas in two books Blue Ocean Strategy, which talks about how you can move from blood-red waters of competition to blue ocean opportunities of bigger markets; and the Innovator’s Dilemma, which focuses on the impact disruptive technologies can have on existing markets as bolder companies figure out how to make things simpler, more affordable and easier, rather than focusing on increasing performance. He made comparisons to the impact of Cirque du Soleil, Southwest airlines, and Dell in other markets.

If developers simply target the same old young male boys and teens, then the market will shrink, based on demographics trends. And he noted that a Piper Jaffray study showed that 75 percent of high school students have shown less interest in video games, presumably because of stale content and more entertainment choices. The way for developers to get past this, he said, is to focus on five resolutions

1. It’s not about horsepower or pretty pictures. It’s about entertainment.

2. Keep mass in mass market. Reach beyond hardcore. Don’t be self limiting.

3. Don’t alienate new players with high prices or narrow content.

4. Innovate or die.

5. Create a democracy of ideas for new games, where the focus isn’t on the biggest production budgets.

Source Mercury News