the discussion outlined different revenue streams for Nintendo (and other game console makers). Briefly summarize the revenue streams we identified, and try to think of a revenue stream we didn't identify.

Critical Learning Themes Choose the Customer Revenue Structure The Importance of Time Choose the Customer Very different customers Casual: come-and-go, plays only occasionally, once only purchases Serious: plays regularly, builds a game library, upgrades when available V-prop to attract these differs Serious gamer is Red Ocean Hotly contested segment Revenue Structure 1. 2. Multiple revenue streams are part of this business Console sales Game sales (company owns the software) Game royalties (royalty payment from games sold by third party) 3. 3 Shared customers (dotted lines) Time Plays A Large Role In Defining Success New Console Sale As time goes on Appeal of console changes, eventually dropping off (in terms of new sales) But development costs can be amortized over time Older console sales may be profitable Installed base becomes larger, making the console more popular for game developers Therefore, Nintendo et al want Long-lived consoles Years Installed Base of Consoles Years Secondary Lessons Businesses go through ups and downs. Nobody has a smooth ride. Innovations Critical for both customer groups, but different for each Eventually lose their luster. New innovations needed. A never ending treadmill Spaghetti against the wall