Part of the value that I hope our website can provide is the ability to shed some light onto the types of things developers and studios must consider as they conceptualize, develop and release their games. By briefly peaking into the mind of us crazy folk you can hopefully come away unharmed, and with valuable information that serves you well in your pursuit of success in the games industry. Along those lines this post reveals one of the most critical decisions that a game company must make when deciding on which type of game to fund next.
Pioneered in 2005 by authors W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy is a business strategy designed around creating an opportunity for large growth and profits by finding uncontested market space and owning it, rather than the more traditional route of a head to head competition that most companies take. At least that's the dry business-y-esque definition for it.
I however like to think of it in terms of sharks. Big scary sharks with teeth the size of hockey sticks. You see, the red ocean is red because it's a crowded spot, like Cancun on spring break, and this mass of bodies has drawn the sharks out in force as they mercilessly feed on people and fish alike! Meanwhile off in the distance a giant blue expanse sits untouched yet seemingly unattainable.
Blue Ocean Development represents the bold decision to take the road less traveled and swim for calmer waters. Just one year after Blue Ocean Strategy was published the gaming industry took note of as Nintendo revealed that this strategy was applied to create the Nintendo DS and the Nintendo Wii, which we now know of course are both wildly successful products that defied all initial expectations.
To help illustrate the difference in this approach let's look at a chart comparing the two strategies:

The first three rows seem pretty self-explanatory. What about that value line though? An important part of the Blue Ocean Strategy is that it assumes value is added inherently by innovating, so long as you are innovate to the approval of your customer. So while a red ocean product will likely need to grab players through increased production values and scope, a blue ocean product must instead focus on delivering something new.
When talking about these two strategies it's easy to naturally be enamored with the blue ocean underdog approach. Truthfully though both options carry incredible risk and although either can be equally successful the most common approach is to fight the red ocean. When millions of dollars are on the line it may be better to challenge the devil you know. You know?
Mapping to the chart above, here is a real world example between two incredibly successful titles that could not be more different from one another:

Again it is worth mentioning that there is inherent risk in either approach. Red oceans are popular for a reason. There is an established player base willing to spend a bunch of money to play the games that they love. Public figures showing undeniable success and live products that can be played and experienced serve as an invaluable reference. But the competition is fierce, the barrier to entry is steep, and the space may already be overcrowded.
Meanwhile, entering a blue ocean is no cakewalk either. With no proof of an existing market nor access to a blueprint for repeatable success your largest battles may need to be fought before the development of your title even begins.
Don't be too discouraged though, as success can be found! Here is one final batch of examples to show that each path is viable and can be achieved:

At this point you should have a basic understanding of the difference between these two strategies, the risks associated with each, and several real-world examples of success. Perhaps in a future post we'll run a hypothetical game concept through the red vs. blue ocean filter and demonstrate how this process can add insight and strength to your product design and pitch.