GROUP ASSIGNMENT
INNOVATION MANAGEMENT
(MPU3242)

CASE STUDY REPORT: WII TECHNOLOGY AND ATARI, INC

GROUP:
BTD10

GROUP NAME STUDENT ID

1. MUHAMMAD ALIF SYAZWAN BIN SULAIMAN 62211119156

2. ARIF SOFWAN BIN ABDUL MAJID 62211119666

3. MUHAMMAD AFIQ BIN RAZAK 62211119516

3 4. AMAL BINTI AZHAM 62211119154

5. SITI NOOR DASHIMA BINTI OMAR 62211119228

6. ARIFF IKHMAL BIN NASIR 62211119184

7. MUHAMMAD ASHRAF BIN ABDUL KARIM 62211119204

No Items Poor Satisfactory Excellent Marks

1 Introduction Case study 1 1 2 3 4 5 6 7 8 9 10
     
   
2  Answers of case study 1 3 6 9 12 15 18 21 24 27 30

3 Conc
Conclu
lusi
sion
on ca
case
se stud
study
y1 1 2 3 4 5 6 7 8 9 10
     
4 Introduction Case study 2 1 2 3 4 5 6 7 8 9 10
     
5
 Answers of case study 2 3 6 9 12 15 18 21 24 27 30
     
6 Conc
Conclu
lusi
sion
on ca
case
se stud
study
y2 1 2 3 4 5 6 7 8 9 10
     
Comments:  
Total Report
 
Marks (100%)
Lecturer Name : Mahfuz Abd Malek Signature
 Acknowledgement:
 Acknowle dgement:
 

TABLE OF CONTENT

Content Page
CASE STUDY 1 (WII TECHNOLOGY)
Introduction Case Study 1 1
Answers of Case Study 1
1. What was new and novel about the Wii?
2. How did Nintendo's approach to the inventive/creative
 phase of the Wii's innovation
inn ovation differ from its rivals Sony
and Microsoft?
3. If the Wii was not as technologically
technologically advanced (in terms
of graphics, chip speed etc.) as its rivals from Sony and
Microsoft, how can it be an innovation?
4. What was the value proposition being put forward by the
2-6
Wii and how did this differ from the PlayStation and the
Xbox?
5. Who was the value proposition aimed at and why?
6. What was the business model and the associated revenue
generation mechanism used for the Wii?
7. How does the Wii Fit contribute to Nintendo's business
model?
8. What does the Wii tell us about the relative importance
of technology and customer needs?
Conclusion Case Study 1 7
 
CASE STUDY 2 (ATARI, INC)
Introduction Case Study 2 8
Answers of Case Study 2
1. Which
Which innovat
innovationion strate
strategy
gy did Atari
Atari follow
follow inin the 1970s?
1970s?
2. What was
was Atari's
Atari's busine
business
ss model?
model? How
How influent
influential
ial has
this model been?
3. Who were
were the
the new entra
entrants
nts to the
the videoga
videogameme console
console
market in the late 1990s and early 2000s?
4. What were
were the
the attract
attractions
ions of the
the videoga
videogameme console
console 9-12
market for these new entrants?
5. Which
Which innova
innovation
tion strateg
strategy
y did Sony
Sony follow?
follow?
6. Why do you
you think
think Sony
Sony chose
chose this innov
innovati
ation
on strategy
strategy??
7. What was strateg
strategicic about
about Sony'
Sony'ss decision
decision to enter
enter the
the
videogames market in the late 1990s?
8. What was
was innovat
innovativeive about
about Sony's
Sony's PlayS
PlayStat
tation?
ion?
Conclusion Case Study 2 13
 

CASE STUDY 1 (WII TECHNOLOGY)

INTRODUCTION CASE STUDY 1

1
 

ANSWERS OF CASE STUDY 1

1. What was new and novel about the Wii?

The new Nintendo Wii offered a wireless controller which is the remote that utilize

wireless technology with built-in sensors to translate movement directly onto a TV

screen. Another thing about the Wii remote is that gamers will use this as a pointing
device which enables them to like a reality sports such as tennis or golf by swinging the
wand in the air to hit virtual tennis or golf balls.
Moreover, Nintendo also launched a sporting element called the Wii Fit which
features a “balance board” that resembles
resembles a pair of bathroom scales on which gamers can
do yoga, aerobics and ski slaloms. It can also calculate the body mass index (BMI)
enabling users to undertake a daily workout regime. This in return to innovation, one is
no longer directly hooked up to the console and control of the ball is all via motion

sensors that are much more like the reality.

2. How did Nintendo's approach to the inventive/creative phase of the Wii's innovation
differ from its rivals Sony and Microsoft?

 Nintendo are approaching

appro aching towards more females and families as their target market
mark et rather 
than the “hard-core” gamers. This is because, they recognized there were not many games
made in the gaming market that are more relaxed, fun and suitable for any age groups or 
families.

Therefore, with the Wii Remote

Therefore, Remote it allows consumers
consumers to play simpler games
such as tennis or ten-pin bowling on their screen and very much akin to the real game
rathe
ratherr th
than
an wi
with
th a jo
joyst
ystic
ick
k wi
wire
red
d up to the co
comp
mpute
uter.
r. Cons
Consum
umers
ers from
from outsid
outsidee the
the
traditional videogames will get attracted to these far more basic games and attracted by
the realistic of human- computer interaction offered by Wii.
Wii. It also offers games that are
fun, and user-friendly and facilitate participation with ease.

2
 

3. If the Wii was not as technolo

technologically
gically advanced (in terms of graphics, chip speed etc.)
as its rivals from Sony and Microsoft, how can it be an innovation?

Innovation that come from the Wii is about providing videogame players with a simulated
game that is much more realistic because of game form which player is no longer 

traditionally play using console but in form physically involve in playing the game. Wii
that produced by Nintendo recognized that there was a vast untapped market of people
who wanted simpler games that were fun to play instead of ultra-violent, eye-bogging
graphics and complex adventures Grand Theft Auto sold well to traditional fans. Rather 
than
than with
with a jo
joys
ysti
tick
ck wi
wire
red
d up to co
comp
mput
uter
er the
the cons
consol
ole’
e’ss ha
hand
ndse
sett Wii
Wii Remo
Remote
te
revolutionized the market by allowing consumers physically play simple games such as
tennis and ten-pin bowling on the screen, in a manner very akin to the real game.
While these games are far more basic that the highly sophisticated modern
games like Halo 3 that boast the best graphic, this has not deterred consumers from

outside the traditional video games audience, attracted by the realistic human-computer 
inter
interact
actio
ion
n offer
offered
ed by the Wii.
Wii. Huma
Human n and cocomp
mpute
uterr inter
interac
actio
tion
n that
that has
has attra
attract
cted
ed
millions of adult, for whom anything approaching running of lifting because the Wii
offers games that are fun and user friendly and facilitate participation with ease.

4. What was the value proposition being put forward by the Wii and how did this differ 
from the PlayStation and the Xbox?

 Nintendo was able to break away from the razor-thin

ra zor-thin margins that characterize
cha racterize the video

game industry by re-engineering their value proposition, resulting in a blueprint for value
developm
development
ent in a market
market that was histori
historicall
cally
y untappe
untapped.
d. Console
Console competi
competitio
tion
n was
focused
focused largely
largely on the technol
technologi
ogical
cal success
success of faster
faster displays
displays,, processo
processors,
rs, superior 
superior 
 physical motors, chip engineering
eng ineering and other hardware
ha rdware tweaks.
Microso
Microsoft's
ft's Xbox
Xbox and Sony's
Sony's PlaySt
PlayStati
ation
on were
were out-com
out-competi
peting
ng Nintend
Nintendo's
o's
current console. The new console they produced was inexpensive to manufacture and
used a game controller that monitored body movements rather than merely responding to
 button presses. They made the gaming interface enjoyable and simply was a way to
increase consumer value without requiring extreme hardware efficiency. Nintendo often

targeted women, families, and those who aren't usually identified with "extreme" gaming.

3
 

5. Who was the value proposition aimed at and why?

The key strategy for Nintendo Wii was to target a wider demographic than its rivals.
Gamers of all ages, including women and the elderly, are getting into the Nintendo Wii
action. Their approach also included making low-cost units available to a wider range of 

customers. This was made possible by a low-cost manufacturing approach. With such a
good strategy, Nintendo established their own marketplace
marketplace that provided customers
customers with
value innovation at lower prices.
The Nintendo Wii has three main specific consumer groups. The first is young
adults who want simple games with a simple setup. This group was not interested in PS or 
other complicated games in terms of setup and operation. Second, people who want to
 benefit from training and exercising their bodies while playing these exciting games that
mimi
mimicc re
real-
al-li
life
fe pl
play.
ay. Thir
Third,
d, people
people who
who love
love spendi
spending
ng time
time with
with fri
frien
ends
ds or fa
fami
mily
ly
members when playing these in-house games.

6. What was the business model and the associa

associated
ted revenue generation mechanism used
for the Wii?

4
 

 Nintendo Wii game console is an example of a multi-sided platform business model

 pattern. Nintendo pursued a fundamentally differentiated strategy. Nintendo shifted its
focus to providing a new form of player interaction targeted at a wider demographic.
With the Wii brought to market, it boosted the fun factor with new motion technology.
Players could control the game through a controller simply through physical movement.

The Wii was an immediate success with casual gamers and outsold its competitors such
as Xbox and PlayStation who focused on traditional market of “hard-core” gamers.

7. How does the Wii Fit contribute to Nintendo's business model?

The Wii Fit is a fitness-based game which enables players to exercise while playing the
game. It was first released in Japan in December
December 2007. Since its release,
release, Wii Fit has sold
more than 1 million copies in Japan in just over a month. It is scheduled for release by
mid-
mid- 2008
2008 in Euro
Europe
pe an
and
d the USA.
USA. The
The Wii
Wii Fit
Fit ga
game
me uses
uses yet
yet anothe
anotherr innov
innovati
ative
ve

controller
controller called
called the Wii
Wii Balance
Balance Board. The Wii
Wii Balance
Balance Board is a peripher
peripheral
al which
which
users’ step-on while playing the game. The board can also measure user’s weight and
centre
centre of gravi
gravity
ty.. The game
game itself
itself contains
contains 40 differen
differentt activit
activities
ies which
which include
include yoga,
yoga,
hula-hoop, push-up and other exercise. The idea of the game is to let family members
exercise together while having fun at the same time, all in the comfort of their living
room.. Nintend
room Nintendo
o went
went a step ahead with Wii
Wii Fit as a full-fle
full-fledged
dged Gaming
Gaming cum fitness
fitness
equipment.
 Nintendo can continue to expand and develop Wii Fit to other forms of games
which require players to feel the adrenaline rush when playing game sports such as wind

surfing and boating. With highly innovative and fun game titles like Wii Fit, Wii Sports
and others, Nintendo has successfully changed people’s perspective on video games.
Usually perceived as toys for boys, video games can now be played and enjoyed by the
whole
whole fa
fami
mily
ly.. As a result
result,, Ni
Ninte
ntendo
ndo manag
managed
ed to tap
tap into
into the
the pr
previ
evious
ously
ly untapp
untapped
ed
consumers of the video games market. These people include housewives, the elderly, and
the general non-gamer people.

5
 

8. What does the Wii tell us about the relative importance of technology and customer 
needs?

Wii games are equally as effective for the market segment that involve those who have
extraa time
extr time to do other
other exercise
exercise but they don’t
don’t like
like to go outside
outside or are just lazy
lazy.. Wii

solved the problem and it is easy to operate. Customers only need a few minutes to start
the game. Nintendo Wii
Wii motivational models are central to the game design. Nintendo
Nintendo
took the basic needs and motivation for an individual and mend them into something
extra for its consumers. Thereby, setting importance to more dimensions relating to the
needs of the customers and their motivation behind utilizing a particular product. That all
is explained by Wii games encouraged motion, wireless controllers and an automatic
upgrading system even when the device is on standby. New advanced features in a new
 product encouraged
encourage d people to utilize it.

6
 

CONCLUSION CASE STUDY 1

In summa
summary,
ry, this
this study
study de
deli
liver
vered
ed an effec
effecti
tive
ve solut
solutio
ion
n fo
forr “infe
“inferi
rior-
or-te
techn
chnolo
ology”
gy”
incumbents to compete with their “superior-technology” peers. We demonstrated that it is
 possible for “inferior-technology”
“inferior-technolo gy” incumbents to overcome their weaknesses in

techn
technolo
ologic
gical
al compet
competenencie
ciess by pursui
pursuing
ng a discon
disconti
tinuo
nuous
us path
path along
along a produc
product’s
t’s
secondar
secondaryy feature
features.
s. In contrast
contrast,, “superi
“superior-t
or-techn
echnolog
ology”
y” incumbe
incumbents
nts are more
more likely
likely to
 pursue the traditional path constantly innovating along primary performances, which is
the dimension appreciated by existing customers. We observed that 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”. We obtained these conclusions through an in-depth
case study in the video game industry, but it may be limited in its ability to generalize to

other companies and other industries. However, understanding one successful case may
offer
offer valua
valuable
ble lesso
lessons
ns for manag
managererss who
who ar
aree strug
struggli
gling
ng in tech
technol
nology
ogy-in
-inte
tensi
nsive
ve
competitions. They are encouraged to develop unique competency sets rather than restrict
thei
theirr emph
emphas
asis
is to R&D
R&D an
and
d bl
blin
indl
dly
y pu
purs
rsue
ue lead
leader
ersh
ship
ip in the
the most
most cu
cutt
ttin
ing-
g-ed
edge
ge
technologies.

7
 

CASE STUDY 2 (ATARI, INC)

INTRODUCTION CASE STUDY 2

8
 

ANSWERS OF CASE STUDY 2

1. Which
Which innovatio
innovation
n strategy
strategy did Atari
Atari foll
follow
ow in the 1970s?
1970s?

Atari was the developer of video games, which brought the console as a media to a new

way of playing video games and Atari first went to the home use video game console.

2. What was
was Atari's
Atari's business model? How influent
influential
ial has this model been?

It was a classical application of the market paradigm for shaving and razor blades. Atari
sold this console at a low cost that hardly paid for it and made his money from the card
draw for the title. The case displays the highest markings in these game cubes. They sold
less than one third of the production for $30.

3. Who were
were the new entra
entrants
nts to the videog
videogame
ame consol
consolee market
market in the late
late 1990s
1990s and
early 2000s?

The main factors that changed the video game console market was the rise of high-speed
internet service in the late 1990s. Hardware engineers expected the future of internet
gaming and the new opportunities it would offer. In the late 1990s and early 2000s, Sony,
an electron
electronics
ics and audio
audio product
productss corporat
corporation,
ion, and Microso
Microsoft,
ft, a tech
tech company,
company, also
released new video game consoles, even though none of these firms was an existing
competitor in the videogames market.

In 1995, Sony introduced the PlayStation, the first 32-bit games console with
the idea to use CDs. CDs have more physical capacity
capacity than game cartridges
cartridges and could be
used in games to play full-motion video and other large audio-visual works. Because of 
the PlayStation's
PlayStation's strategy, games may have even longer gameplay and narrative
narrative features,
resulting in extremely popular role-playing games. With Sony’s idea, the PlayStation
 became the best-selling console. In early 2000, Microsoft also launched its console.
Microsoft first entered the console industry with the Xbox system. Xbox was created
using Microsoft's familiarity
familiarity with personal computers. Microsoft discovered the Xbox to
 be a good demonstration of their ability to compete in the console industry.
industr y.

9
 

4. What were
were the attractions
attractions of the
the videogame
videogame console
console market
market for these new entrants?
entrants?

i) Profit factor   - Atari, Nintendo, and Sega are the only three large video game firms.
Sony and Microsoft, as entrants, are willing to take the gamble of investing in new
markets.

ii) Low brand loyalty - Leader on the charts are continually shifting. Customers would be
drawn to the most innovative goods and technologies regardless of which business
or organisation manufactures them.
iii)  Newcomers can create diversity to their own industry - Microsoft and Sony's current
offer
offering
ingss wi
will
ll be conti
continue
nued
d in order
order to divers
diversif
ify
y their
their indus
industr
trie
ies.
s. Sony
Sony an
and
d
Microsoft have the potential to develop their businesses and make money.

5. Which
Which innovat
innovation
ion strat
strategy
egy did
did Sony
Sony foll
follow?
ow?

Sony did used proactive types of innovation strategy when it comes to the matter of video
games console. Companies like Sony who came out with proactive innovation strategies
tend to have a first-mover advantage. They introduce compact disc (digital format) to
replace the cartridge due to its production cost tend to be cheaper. Besides, Sony also
make an extensive type of research
research of the compact disc to convince enough of third-party
third-party
 publisher to shift away from cartridge types of technology in the video games industry.
industry.
Compact disc is known to provide a plenty of capacity as well as added improved audio
and visual
visual feature
featuress that change the indu
industry
stry of video
video games
games console
consoles.
s. Sony access
access
knowledge from a broad range of sources and take high risks from the advantage that they

have.

10
 

6. Why do you
you think
think Sony
Sony chose
chose this
this innovat
innovation
ion strateg
strategy?
y?

As for my opinion why Sony chose strategy innovation

innovation it is because businesses need it to
survive the competition. Without techniques to analyse the world of business, competition
and compan
companie
iess can
can in
innov
novat
ate,
e, it wi
will
ll not work.
work. Acqui
Acquire
re the techn
technol
ology
ogy quick
quickly
ly the

 business needs to be able to use that technology with innovative concepts. In addition,
efforts need to find new streams of income that can make the company move forward.
Innovation is one way to make a lasting statement in the business world and keep a
compan
company
y going.
going. This
This wi
will
ll ensure
ensure Sony
Sony wi
will
ll co
conti
ntinue
nue to co
comp
mpete
ete in the
the techn
technolo
ology
gy
 business which has a better
b etter chance of success. In addition, Sony focuses on strategies to
create value by satisfying the needs and wants of customer
customerss better than anyone else. The
impl
implem
ement
entati
ation
on of th
thee strat
strategy
egy is dr
drive
iven
n by maki
making
ng a set of option
optionss to inves
investt the
company’s resources, this will always ensure that customers always get the best deals
from Sony. Finally, Sony focuses organizational resources to develop the most effective

innovations, these innovations that will generate the most custome

innovations, customerr value and create new
things that will serve customers better than other competitors, Sony company's efforts
need to be more closely to achieve business strategy, achieve a vision of what the
company can have.

7. What
What was strateg
strategic
ic about
about Sony's
Sony's decisi
decision
on to enter
enter the videogam
videogames
es market
market in the late
1990s?

Late 1990s pioneers of the game industry are facing a new threat which occurs from new

entrants from outside the industry. In 1995 the consumer electronics giant Sony, launched
the PlayStation, the first 32-bit games console during the threat crisis happen. Sony
decided to use CDs instead conventional games cartridges used by Nintendo and Sega.
This technology had pioneered and become first company to use it. CDs were much
cheaper to manufacture and permitted much shorter lead times, allowing Sony to respond
very rapidly to changes in demand. Sony shown a clever strategy by introducing new
 product while the industry is having crisis. By 1998 more than 50 million PlayStation
had been sold, making it world’s bestselling videogames console.

11
 

8. What was
was innovat
innovative
ive about
about Sony's
Sony's PlayS
PlayStati
tation?
on?

Sony has launched PlayStation,

PlayStation, the first 32-bit gaming console. The PlayStation’s
PlayStation’s 32-bit
technology was an exchange from the 16-bit console that later dominated the market. Not
only that, Sony also uses CD which is the technology it pioneered as opposed to the

conventional game cartridges used by Nintendo

conventional Nintendo and Sega. CD are not just many cheaper 
to manufacture, it also takes a shorter time, which allows Sony to respond very quickly
rapidly changes in demand. Sony has sold nearly 50 million PlayStations, making it the
 best -selling video game
g ame console in the world. One third of American households
hous eholds owned.
owned .
In the same year the company’s gaming division accounted for nearly half of Sony
Corporation’s consolidated operating profit. Three important factors in Sony's success
which is the foster the development of third party software, reduce the cost of making
video games and the changing demographics of those who play video games. Sony meets
two of the first these aspects with the use of CDs, while the third is met by the new 32-bit

techno logic which allows for much more sophisticated games that appeal not only to
teenagers, traditionally market for video games, but young adults as well.

12
 

CONCLUSION CASE STUDY 2

13