Creating Discontinuous Innovation: The case of Nintendo's Wii

Abstract

An in-depth case in the video game industry is carefully studied to deliver an effective solution for "inferior-technology" incumbents in competing with their "superior-technology" peers. Nintendo, a historical player in this industry, successfully shifted its innovation direction along the traditional path and won over its "high-performance" competitors with its new generation game console "Wii", a product of discontinuous innovation. Through the secondary data and patent analysis, we concluded that it is possible for "inferior-technology" incumbents to overcome their weaknesses in technological competencies by pursuing a discontinuous path along a product's secondary features. And the competencies that effectively help established incumbents adapt to discontinuous innovation created by new entrants can also help established incumbents initiate discontinuous innovations when they are technologically inferior. These competencies are grouped together in the class named "cooperative competencies".