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or suppliers participate in more than one market. Our discussion of complements in the Co-opetition chapter was all about this type of link. For example, Intel’s and Microsoft’s games are linked. For one thing, they share the same customers. But more than that, Intel raises the added value of Microsoft, and vice versa. People borrow money to buy cars, and so the games of selling cars and lending money are also linked. Ford recognized that link and decided to enter the credit game. Ford Motor Credit raises Ford’s added value in the game of selling cars. The other side of this equation is when, by entering another game, you end up competing with, rather than complementing, yourself. You lower, rather than raise, your added value in the original game. This issue of cannibalization is the added-value link we’ll focus on in this chapter when we present epilogues to the earlier stories of Nintendo and Softsoap.

Rules impose constraints on what players can do, and these constraints can link what would otherwise be separate games. We’ve already seen this effect in the Rules chapter: a most-favored-customer clause prevents a seller from treating two otherwise independent negotiations with customers as separate games. In this chapter, we’ll again start in the business-to-business arena, when we look at linking games through choice of contract length. Then we’ll turn to a discount-pricing rule that links games in mass consumer markets.

Finally, two games can be linked for no other reason than that someone perceives them to be linked. Thus, Tactics, by changing perceptions, can change the links between games. For example, issuing threats and establishing precedents are tactics that work by creating linkage across games. We’ll analyze some examples of these tactics, ending with another look at our first case in the book, the game between NutraSweet and Holland Sweetener.

As this classification of links suggests, every story in this chapter could, in principle, have been told earlier in the book. But, in practice, thinking in terms of a separate Scope lever is very useful. It’s too complicated to think of everything as one large game. Hence this chapter. The cases we’ve saved for here are the ones that emphasize strategies for linking games that otherwise would not naturally be linked, or for severing links between games that otherwise would naturally be. In every case, it will be taken as a given that the games have a player or players in common.

2. Links through Added Values

Newcomers to a business face many disadvantages. They lack proven products, brands, loyal customers, manufacturing experience, and relationships with suppliers. As a challenger, if you go head-to-head with an incumbent, you’re likely to lose. There’s little you can do that the incumbent can’t do as well, if not better. In short, you have little added value.

But you don’t have to go head-to-head. Instead, you may be able to play off the links between the business you’re targeting and the incumbent’s existing business. You do something that the incumbent can’t match without hurting his existing business. You create a dilemma for the incumbent. He wants to—and could—come after you, but he doesn’t. That’s because if he did, he’d lower his added value in the game he’s already playing—and that cost would be too high. So, for now at least, the incumbent leaves you alone.

Playing Judo

The Japanese art of judo teaches how to use an opponent’s weight against him, to turn his strength into weakness. In business, the judo strategy exploits links between games to turn the incumbent’s strength into a handicap. Judo explains how Sega was able to topple the video game giant Nintendo.2

I don’t like the idea of one company monopolizing an industry.

—Hayao Nakayama, President, Sega Enterprises3

Super Sonic In the Added Values chapter, we left Nintendo with a stock market value exceeding Sony’s or Nissan’s, and with Mario being better known than Mickey Mouse. That was in 1990. Three years later, Mario was still more popular than Mickey Mouse among U.S.