For the past 15 years in video game history, Nintendo was a mere follower in the console arena. However, the company made it into the top 10 of the 2008 Business Week/
BCG Most Innovative Companies.
The key factor of Nintendo’s success was a so­called blue ocean strategy. This theory describes how instead of working in conditions, known as the red ocean, where businesses are viciously fighting against each other for a share of the marketplace, organizations should try and find a way to work in a marketplace that isn't bloodied by the competition and is free of competitors.
Nintendo identified a new market of buyers and users, many of whom had never considered gaming. To attract this new segment of noncustomers, Nintendo designed the
Wii, a console which appealed to a far greater segment of users than conventional gaming, even going beyond the “regular” target age groups. This gave the game a whole new dimension of buyers, enabling Nintendo to effectively tap into the “casual gamers” category – reaching far beyond “hard­core gamers”.
Nintendo regained market share with a vengeance and spun the industry on its head with its new, holistic videogame approach. By redesigning the console and simplifying the experience, Nintendo was also able to attract a mass of casual gamers. Gaming became a social experience to be enjoyed with families and friends of all ages.
This case illustrates that if companies wish to tap into latent demand and create organic growth they must learn from noncustomers. The case demonstrates that if
Nintendo attempted to compete head­to­head against the Sony PlayStation and Microsoft
X­box they would likely have been further marginalized in the game console industry.
Instead, the company focused its efforts on finding the perfect combination between differentiation and low cost in order to maximize the Wii revenues.
The success of Nintendo’s strategy shows that a better solution to an existing problem is not good enough. To capture new demand companies need to focus on the demand side of the equation and redefine the problem itself. There are far more noncustomers than customers. Companies need to look systematically across established boundaries of competition and reconstruct buyer value elements across market, industry, buyer, and

supplier boundaries to create new market space where a new level of demand is generated.