Kobun Heat said:Another thing, since we're all talking about this now, that people seem to miss a lot: the tag line of Blue Ocean Strategy, the book, is "Create Uncontested Market Space And Make The Competition Irrelevant." Note that it says nothing about "Become The #1 Player in Your Industry." You don't do this to "win": you do this because if you do it right, you don't need to win.
That is all to say that -- regardless of Lapsed's opinion that Nintendo is "fighting indifference" and will consider themselves to have failed if they don't sell 100 skillion units -- Nintendo doesn't need to sell more consoles than Sony or Microsoft for this gambit to be successful. All they need to do is create a market that nobody else is in. Callaway didn't "win" with the Big Bertha; Yellow Tail didn't become the number-one maker of wine.
Interesting, then, that as soon as Nintendo decided that they didn't need to sell more consoles than Sony or Microsoft, they found themselves in a position where they might actually do so.
That's true to an extent, although of course Nintendo would still have to sell a healthy absolute amount of software and hardware to their new audience, regardless of whether or not they are the only ones selling to them. To stay in the Blue Ocean metaphor: when the new ocean you've moved to is devoid of fish, it doesn't matter that you're the only fishing boat there.
Of course, the new gamer ocean is obviously filled with plenty of fish, enough for Nintendo to actually outsell the competition in exploiting it, as you say. And I do believe that, while this incredible increase in sales and marketshare wasn't necessary for Nintendo to survive, they were at the very least hoping that this new market was so bountiful that they'd see respectable growth. So they didn't set out to annex their own ocean just to call it their own, they annexed it because it seemed highly lucrative (and yes, it seemed that way largely because no-one else was there, but that's more of a cause than a reason in itself -- semantic though that distinction may be).