Console Hardware - The Video Game Industry: Formation, Present State, and Future - page 141

unit sales for the software titles it released during this period than the
other major Japanese game publishers. 2 A s a result, Nintendo managed to
capture a larger share value from game software sales than had been the
case if the company were dependent mostly on royalties paid by third-
party publishers to the console manufacturer.
AIM OF CHAPTER
For the video game industry in which the entertainment value of new tech-
nology could be highly uncertain and subject to diverging interpretation pre-
market release, sensing innovative opportunities could be highly dependent
on a company's cognitive frames, i.e. shared representations of the infor-
mation environment that shapes how a company interprets and categorizes
a new technology and which performance criterias they use to evaluate it
(Kaplan and Tripsas 2008; Orlikowski and Gash 1994; Ernkvist 2009).
The aim of the chapter is to analyse how Nintendo's cognitive frame
shaped the innovation process of the market-expanding Wii video game
console with its discontinuous product attributes. Through a case study
of Nintendo Wii, the chapter analyses how the company's history, organi-
zational changes, explorative innovation process and management with a
high emphasis on intuitive-based decision-making all were signifi cant fac-
tors in the interpretation of the Wii opportunity.
METHOD, EMPIRICAL DATA AND CHAPTER AHEAD
The chapter is based on a range of quantitative and qualitative sources
covering the video game demand side, the industry and the specifi c innova-
tion strategy at Nintendo. The qualitative sources for the case involve oral
histories with key managers, senior manager speeches and presentations,
media interviews, author's interview, investor Q&A and president message
in annual reports (see Appendix 8.1 for a list of sources). One of the risks of
retrospective case studies is the bias of post hoc rationalization of strategy
(Bukszar and Connolly 1988). Although the risk of managerial post hoc
rationalization could not be completely removed, the study has tried to lim-
its its infl uence by relying on descriptions of innovation strategy that are as
close as possible to the event and before the market result of the innovation.
This has been combined with ef orts to try to use dif erent sources as well,
both from the same manager and, if possible, accounts from other manag-
ers present. The qualitative data has been transcribed and coded into more
general aspects of the innovation process, focusing on the substantive ideas
and strategies in the process.
The chapter fi rst provides an account of how Nintendo's business history
shaped the general features of its cognitive frame, followed by a description