Among many other inspired moments, Dan offers up, early in the piece, two key points.

• The increasingly hardcore nature of the game industry is causing a contraction of the industry.
• New intuitive controller options will result in innovative game play that will bring new gamers into the fold.

He goes on to describe the evolution of individual genres within the gaming industry, reaching a conclusion that was surprising to me, but that intuitively felt correct upon re-reading:

As the less hardcore players burn out on the game mechanics of their favorite genres, they too are at risk of leaving the game market. The result is a steady erosion of the genre’s population.

What is left is a very peculiar group of highly purified hardcore players. They demand rigorous standardization of game mechanics and have highly refined criteria for judging the quality of their titles. With each generation of titles in the genre, they weed out a few more of the weaker players.

This made me think of the recent innovations around the iPhone and, particularly, the games that have been created for the iPhone app store. Prior to the iPhone's release, high-end mobile phones had, essentially, become a really specific gaming genre, catering to hardcore "players", consisting of tech reviewers and industry analysts whose tastes had evolved as all genres must. "They demand rigorous standardization of game mechanics and have highly refined criteria for judging the quality of their titles. With each generation of titles in the genre, they weed out a few more of the weaker players."

The iPhone was about Nintendo-style innovation, applying the same rules that Nintendo has, and achieving a quite Nintendo-like result of producing a device that is fun, satisfying, and very inexpensive to develop innovative games for. As Dan says about Nintendo's history of innovating in controllers:

One of the easiest ways of creating a new genre is to invent a new series of verbs (or risk mechanics as I called them in my Genre Life Cycle articles). One of the easiest ways of inventing new verbs is to create new input opportunities. Nintendo controls their hardware and they leverage this control to suit their particular business model.

And this is exactly what Nintendo has done historically. The original Dpad, the analog stick, the shoulder buttons, the C-stick, the DS touch pad, link capabilities, the tilt controller, the bongo drums … the list goes on and on.

The touchscreen and tilt sensor in the iPhone are just another in the series of controller innovations, and they've yielded the results that these inventions always do. Only, instead of Mario being the brand that benefits from this new set of verbs, Apple is the brand that benefits.

And all of this confirms my suspicion that the iPod and iPhone are not only designed to be subscription hardware that you repurchase constantly, but that Apple is deliberately creating their devices so that the only way you can level up in this game is by buying a new iPod or iPhone.

It's worth concluding with one of Dan's final points:

Nintendo’s strategy of pursuing innovation benefits the entire industry. It brings in new audiences and creates new genres that provide innovative and exciting experiences. The radical new controller is a great example of this strategy in action.

Surprisingly, this also benefits Microsoft and it benefits Sony. As the years pass, the hard core publishers that serve mature genres will adopt previously innovative genres and commoditize them. Their profits will be less, but they’ll keep a lot of genre addicts very happy. Everybody wins when a game company successfully innovates.

I see both of these strategies as a necessary and expected part of a vibrant and growing industry. Industries need balance and Nintendo is a major force of much needed innovation that prevents industry erosion and decline.

According to Amazon's account of holiday bestsellers, "Nintendo Wii dominated the top sellers in video games and hardware including the Wii console, the Wii remote controller and the Wii nunchuk controller." Worldwide sales of the Wii are nearly equal to sales of the Microsoft XBox 360 and Sony Playstation 3 combined.