Stolen from here in case guy deletes it. Twas a an email from his internet hero
http://www.neogaf.com/forum/showthread.php?t=306165&page=2 post 199
New articles are on their way.The E3 craze is beginning to settle. Don't get mad at the hardcore, just laugh at the craziness and just remember this moment. We may not see any such massive industry change like this for decades.
I don't interpret Microsoft's actions to be a co-option. It smells more like a temporary retreat. Microsoft stated they will 'beat' the PS3. All their so-called 'casual' stuff was really red ocean tit-for-tat against Sony. I don't see Avatars as an attack on Wii as it would be on Sony's Home. Lips to be against Singstar. In the Movies to be against EyeToy. I was waiting for Microsoft to say something along the lines of 'the New Market is VERY IMPORTANT to us' but they never did.
A Nintendo investor pointed out to me that the bizarre reactions of Sony and, especially Microsoft's, press releases and practical executive meltdowns a few months ago was that they were giving up fighting against Nintendo. He seems to have been right.
Look at Nintendo's press conference as if Microsoft did release a wii-mote and go for the New Market. Imagine what a console war would be over the New Market and it would generally look like Nintendo's press conference. No way would Microsoft bring out a mother on stage to give personal accounts (asymmetries of motivation) and almost everything Nintendo showed was connected to its 'sword' of being an integrated hardware and software developer (Asymmetries of Skill). At the end of the conference, Reggie announces that Nintendo is forming a new company whose only purpose is to find a way to disrupt the industry again (and NO journalist asked him about this!). Nintendo launched a pre-emptive attack on a counterattack that didn't come. This is why the conference has a 'super casual' vibe of it. They were rallying around to protect their New Market. Motion Plus simply delayed the new Mario and Zelda games even longer. There is evidence to show that Wii Sports Resort was super rushed (as if Nintendo was responding as if a counterattack would come).
"Core Market" and "Expanded Market" are terms from the disruption literature and Nintendo is using them correctly. The Internet seems to want these terms to be whatever they feel it to be. Anyway, a key principle of disruption is that while the core and expanded market can co-exist and even both grow, the core eventually implodes and the expanded market takes over. The expanded market takes over because it also keeps getting 'better'. Core implodes because it surpasses what customers can absorb.
A great example would be the news business. The Core Market were newspapers. The Expanded Market would be the Internet. Both existed side by side for a while. But look at stories of newspaper layoffs and closings increasing month after month and how the Internet is soaking up the ad revenue. The Expanded Market of the Internet got better with the news until it was able to 'disrupt' the old Core and the companies that rely on it.
I haven't yet heard anyone framing Nintendo's press conference as an aggressive Declaration of War over the New Market. Nintendo is thrilled. I know their investors are thrilled. Analysts talked to Iwata in person at E3 2008 and many may be coming around. Behind the scenes, Nintendo knows they have the New Market to themselves and it will be too late should Microsoft or Sony choose to counterattack.
I suppose now the next major thing will be to watch the Core slowly implode (and the hardcore reaction to THAT will probably be worse than E3 2008!). We should begin hearing stories of 'Core' games suddenly get canceled and other stories of more and more big publishers moving not just to the Wii but to the 'New Market' way of doing things. What's interesting is Nintendo's fierce aggresiveness over the Expanded Market. If the Core does begin to sink, Sony and Microsoft will throw themselves at the Expanded Market to save themselves but Nintendo is already attempting to wall it off.
Reggie gave a good short definition of core and expanded years ago. Core are games relying on SIGHT while expanded are games relying on TOUCH. When Iwata says Mario and Zelda for the core weren't shown, and the hardcore then jump up and say "why does he keep mentioning Mario and Zelda? We want NEW IPS!!!", Iwata is referring to making TOUCH centric Mario and Zelda games. Just as Phantom Hourglass went all touch, so will the next Wii Zelda. 1:1 sword swinging Zelda seems like a possibility. By turning their key series into the 'TOUCH' vein, Nintendo hopes to convert the Core, who valued SIGHT, into valuing TOUCH as the progress of gaming and this will bring them into the Expanded Market. I suppose those who won't ever value TOUCH, no matter how good or sophisticated the game is, would be our hardcore friends. They'll just become more shrill as more and more companies abandon SIGHT for TOUCH.
It should be fun to watch! =)
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