Tuesday, March 27, 2007

One Man Understood What Market He Was In

Satoru Iwata is CEO of Nintendo of Japan, the mother company of Nintendo of America, and the lead behind the Wii.

What he said in a recent interview which named him one of the world's leading CEO's, was telling:

"We are not fighting against other companies—we are fighting against ignorance of video games."

The RIAA is guilty of more than suing American families, it is guilty of not understanding what market it is in.

"The RIAA is the "recording industry" and they represent the interests of the record labels who, while they may claim are in the music business, appear to believe they're really in the "music selling business" rather than (as they really are) the "music entertainment business." They believe their job is to distribute music, promote it, and get people to buy it. They make money by keeping that system closed and locked down. If they recognized they were really in the "entertaining people with music business" they should only be ecstatic about new technologies and services that make their job easier."

This is profound because there is a similar fallacy in the Gaming Industry has: that great graphics motivates gamers, rather than appeases them. This is why games come out early and buggy - because distributors think that once a game's graphic engine is done, that is all that is needed. If a game has crappy graphics, we are not pleased, but if the game is itself is not fun, all the graphics in the world won't save it.

The ignorance of the Gaming Industry is that they think are in the Videogame Graphics Market, not the Videogame Entertainment Market, which is their actual market as evidenced by the Nintendo Wii.

Understanding that their market is not limited to hardcore gamers with large pockets is costing not only Sony, but Microsoft.

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