1. Game Innovation IV: The Disruptive Power of Game Technology Roger Smith SPARTA Inc. rsmith@sparta.com 407.380.0076 © Copyright 2006, Roger Smith http://www.modelbenders.com/papers/

2. Invention vs. Innovation Invention Creating a new technology, capability, process, material, etc. Innovation Finding a commercially valuable application of that invention

3. Peter Drucker on Innovation “One cannot manage change. One can only be ahead of it.” “Business has only two functions – marketing and innovation.” Peter Drucker “Father of Modern Management” 1909 - 2005

4. Incremental Innovation – The Pen “build on and reinforce the applicability of existing knowledge” “improving and exploiting an existing technological trajectory”

5. Radical Innovation “destroy the value of an existing knowledge base” “disrupt an existing technological trajectory”

6. Radical Innovation “destroy the value of an existing knowledge base” “disrupt an existing technological trajectory”

7. Radical and Incremental Waves Time Innovation & Benefits Leifer, R. et al. (2000). Radical Innovation: How mature companies can outsmart upstarts. Harvard Business School Press. Radical Incremental

8. Computer “Killer Apps” Spreadsheet Word Processor E-mail Web Browser 3D Game Engine

9. What Is Game Technology? 3D EngineGUIPhysics Models Artificial Intelligence Networking Persistence

10. Military Simulation

11. Medicine

12. Architecture

13. Education

14. Entertainment

15. XML … The Movie Movies – Games – Machinima Movie = XML Data stream Actors, camera, words, sounds, mood Stream fed to different game engines are reproduced uniquely Requires a standard data stream Creates a new industry – digital scripts and rendering engines

16. Exploration

17. Time Product Performance Progress due to sustaining technologies Performance demanded at the low end of the market Performance demanded at the high end of the market Christensen’s Disruptive Innovation Progress due to disruptive technologies Market disruption opportunity Christensen, C. (1997). The Innovator’s Dilemma. Harvard Business Press.

18. Time Product Performance Normalized Sustaining Technologies Multi-Technology Disruption 3D Engine Persistence Physics AI Networking GUI Disruptive Game Technologies

19. Multi-Technology Disruption (Kiviat Graph) 3D Physics AI GUI Network Persistence Military Tech Game Tech Game Potential

20. Industry Disruption Potential Military Simulation MedicineEducationEntertain ment Architect ure Explor ation 60% 20% 70% 90% 20% Industry Size Game Entry Game Potential

21. Products Cool Things Customers Cool People Resources, Processes & Values Resources Valuable Assets What we are good at Values Focus, Culture What we care about Processes Creative Process How we do it $ Energy $ Christensen, C. (2005). Seeing What’s Next. Harvard Business Press. X X Change

22. Value Chain Evolution 3D Engine is a limited solution Shift to other needs to keep growing Target “Not Good Enough” User Experience – intuitive, quick understanding JIT Exercises – scenario development Rapid DB Build – rapid terrain/environment Lower Costs – affordable upgrades, wider distribution Easier Deployment – smaller HW footprint, larger audience Target Non-consumption Bring 3D experiences to customers who never used 3D before Give them an alternative to their old solutions

23. Disrupt the Old Guard Today … Be Disrupted by the Next Wave Tomorrow

24. References Christensen, C. (1997). The Innovator’s Dilemma: When new technologies cause great firms to fail. Harvard Business School Press. Christensen, C. & Raynor, M. (2003). The Innovator’s Solution: Creating and sustaining successful growth. HBS Press. Christensen, Anthony, & Roth. (2005). Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change. HBS Press. Leifer, R. et al. (2000). Radical Innovation: How mature companies can outsmart upstarts. Harvard Business School Press.