Here’s a rule of thumb in business: always see new competitors as harbingers of disruption

Protocol has just published an article quoting Phil Spencer, VP of Gaming at Microsoft, saying that his company’s biggest competitors will be Google and Amazon, rather than the traditional players in the industry, Sony and Nintendo.

This is a clear indicator of disruption: overnight, your competitors change completely, and instead of being companies you’ve been following for years, they are newcomers or, as in this case, were engaged in another type of business. A couple of days ago I wrote about the Swiss watch industry, and how it has stubbornly refused to see it as a possible competitor the brand that in just a few years has sidelined it.

The gaming industry is changing: it is no longer focused on hardware, on the sale of consoles and games, but rather on a subscription and service model. For the brands that practically founded that industry, this change will have profound implications, and their viability depends, basically, on how quickly they are able to visualize, understand and interpret this change.

Microsoft predicts that the future of gaming will be on the cloud, not on consoles, so therefore it makes sense to ignore traditional competitors still using the old model and instead worry about those who have the capacity, whether proven or not, to be relevant players on the cloud. Google has already defined its strategy, and while Amazon hasn’t yet, it seems to be working on one. For Microsoft, it’s clear that it was right to commit strategically to Azure, which has made it one of the leaders in cloud computing, and that two of its most important lines of business, gaming and cloud computing, are coming together. But the rest of the traditional competitors, face a first level challenge, especially if they don’t know how to read the board soon.

Google’s commitment to Stadia, based on a technological development to avoid the bandwidth or latency problems common in this type of environment, has suddenly woken up an industry that had traditionally focused on the sale of hardware products packed in cellophane covered boxes. At the time, proposals such as Steam already represented a significant change in the transition from product to service in this industry, but despite its strong growth, it was never seen by the main competitors as a real threat. But Stadia has proved a game changer.

The ability to visualize disruption in an is important and can determine the survival of traditional competitors. When it happens, it’s very possible that the attributes you thought were critical to success in your industry will become irrelevant, and that completely different ones will emerge, and if you don’t have them, you could soon find yourself out of business.

You might be a leader in your sector, but if you suddenly see competitors appear, new kids on the block in the form of startups or from another industry, pay attention: they could be about to change the rules of the game.

(En espa?ol, aquí)

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