Console Hardware - The Video Game Industry: Formation, Present State, and Future - page 144

constantly experiment with interesting game concepts, although many of
them did not lead to immediate success.

MARKET CONTEXT AND THE OPPORTUNITY
RECOGNITION OF THE WII

Signifi cant market changes are often connected to innovative opportunity
recognition in a complex interplay (Holmén, Magnusson and McKelvey
2007; Alvarez and Barney 2006). This was also the case for the Nintendo
Wii, where the company's own development and external market signals
acted as triggering mechanisms for senior management interpretation for
the urgency of a product with discontinuous attributes that could expand
the market.
Nintendo's rapid growth throughout the 1980s and early 1990s came to
an end when increased competition from Sega and subsequently Sony and
Microsoft made inroads at the market. During a decade from the middle
of the 1990s, revenues and operating income were stagnant ( Figure 8.1).
When Sony became the new market leader in game console hardware dur-
ing the second half of the 1990s, it attracted a majority of the development
resources from independent third-party publishers. Sony could also use its
technological expertise and economies of scale and scope to introduce a

120,000

100,000 4

-Console game
software

T3
p
n
E
re
u 0
T3
C
re
=
c
P

80,000 -

Portable game
software

*S 60,000

40,000 -

-Total videogame
software (portable
and console]

20,000

0

^or^coc ^orHCNoo^i -ovor-ooa>o
OOC^ CT^ OOOOOOOOOOT- I

CTsCT ^a ^CT^OOOOOOOOOOO
T -H ^H^HT -HCNJCNirvJCMCMCNlCNrvJCNirvJCNJ

Figure 8.2 Volume of video game software sold in Japan, 1996-2010 (portable and
console) . Source: CESA (1997-2011).