A completely different game: unlimited gameplay

Chen Chunhua

We were deeply influenced by James Cass' book The Game of Finite and Infinite. In this book, James Cass shows us two types of "games" in the world: finite games and infinite games. In his book, he tells us that the purpose of a finite game is to win; the purpose of an infinite game is to keep the game going on forever. Limited games play within boundaries, and unlimited games play borders. Limited games have a definite beginning and end, there are specific winners, and the rules exist to guarantee that the game will end. The infinite game has neither a clear beginning nor an end, nor a winner, and its purpose is to bring more people into the game itself, thus allowing the game to continue.

The rules of most industries in the industrial age can be seen as a limited game. Industrial conditions and resources become the boundaries of the industry, members of the industry are competing in the given industrial conditions and resources, members of the industry are in a competitive situation, and people try their best to become winners. So in most cases, Michael Porter's competitive strategy is a theory that people believe in, whether it is total cost leadership, or differentiation and specialization, the end result is to gain a competitive advantage and win in the competition. We are not only implementing our own corporate strategy in the limited game logic, but also accumulating our core competitive advantages in continuous competition, in an industry, there are winners, there are losers, and the industry is also developing in a linear and continuous manner.

In the digital era, Internet technology, digital technology, artificial intelligence technology, life science technology, etc. are embedded in various industries, and their core features are to break industry boundaries, cross-border collaboration, and reshape boundaries. Much of the industry rules of the digital age can be seen as an infinite game. In the context of digital technology, the industrial conditions and resources of many industries are no longer the boundaries of the industry, the choice of leading enterprises is to continuously break through the boundaries of the industry, or cross-border connections to create new growth space, and even many enterprises are not members of the original industry, they use new logic to establish new industry rules, so that the original industry has new value, thus expanding different development space. Therefore, the development of the industry is no longer the competition between members of the industry, but the redefinition of the value of the industry brought by members of the industry or members outside the industry, thus creating new space and forming a greater expansion possibility than the original industry. The relationship between these new members is no longer a competitive one, but a cooperative symbiotic relationship, working together for the sustainable development of the industry. At this time, the members no longer pay attention to who wins and who loses, but how to make the industry sustainable; no one seeks their own competitive advantage, but seeks common development space; the industry no longer develops in a linear and continuous way, but more shows the characteristics of discontinuous and non-linear development.

In the context of digitalization, the new characteristics of the development of the industry are precisely the characteristics of unlimited games. As James Cass defines, infinite games play with boundaries, and the emergence of new business models, or new areas, in the digital age, is what reshapes the boundaries of the industry.

The development of the automotive industry can make us feel the transition from the "limited game" of the industrial era to the "infinite game" of the digital age. At the end of the 19th century, gasoline- and diesel-burning cars became mainstream, when cars were still manufactured by hand, and although the components had been standardized and could be mass-produced, the production of cars was still very low. The emergence of Henry Ford, let the automotive industry really began to take off, he spent several years in the early 20th century to try to produce a car that can be mass-produced, low-cost sales, after 6 entrepreneurial failures, finally in 1908 successfully produced the Ford Model T, making the popularity of the car possible, since then gasoline and diesel cars all over the world, booming.

From the United States to Europe, and then to Asia, the development of the automobile industry has driven the development of the entire manufacturing industry and the economy, the automobile industry has become one of the pillar industries of the modern economy, and has played a huge role in the development of the world economy and social progress has had a huge impact and far-reaching impact. Because of this, the auto industry is also competing globally, with the dominance of automakers shifting from the United States to Europe, to the rise of Toyota in Asia, during which some auto companies grow and others decline.

In the 1990s, in order to solve the problem of scarcity of resources and environmental protection, the global automobile industry launched a new competition, fuel cell vehicle research and development and industrialization has always been the focus of the world's major automobile producing countries and enterprises in the technical competition, so it is also known as the first of the top ten technologies that change human life in the 21st century. According to public information, the first hybrid electric vehicle Toyota Prius was introduced to the international market in 2001; the first pure electric vehicle Mitsubishi iMiEV electric vehicle was mass-produced and launched to the market in 2009; the actual road test of driverless cars was carried out in 2012; the automatic driving bill was passed in some us states in 2013; and in 2017, the United Kingdom, France, Germany, and Norway announced that the sale of gasoline and diesel vehicles would be banned from 2040 General Motors has publicly stated that its power drive system strategy is developing from traditional internal combustion engine technology to hybrid to hydrogen fuel cells, and many leading automobile brands have also launched hybrid vehicles and new energy vehicles. After experiencing the continuous development of the whole industry, leading brands such as Mercedes-Benz, BMW, Audi, Volkswagen, toyota and so on have firmly determined their industry status, and the automotive industry has also entered a relatively balanced and mature stage of development.

But what the entire automotive industry and consumers did not expect is that Tesla stands out as a new manufacturing enterprise with no automotive industry background at all, and the company that uses a new model to manufacture cars with Tesla is called "new car manufacturing force" and is developing rapidly. Automotive, an already very mature and relatively stable industry, has encountered unprecedented challenges.

Tesla is completely different from the original manufacturing model adopted by automobile manufacturing enterprises, and we can call it the conversion from the "complex car + simple software" model to the "simple car + complex software" model. In this paradigm shift, tesla and other new car-making companies install inexpensive software-controlled sensors and actuators on a central control board to run an operating system while running different threads, rather than developing many independent embedded systems that can only do one thing. Another advantage of this manufacturing model adopted by tesla and other companies is that the manufacturing cost is lower. This change is not only a difficult change for vehicle manufacturers, but also a huge challenge for suppliers who manufacture independent system components on automobiles. We can understand that Tesla is producing cars with a completely different and completely new logic from traditional car manufacturers.

Compared with the traditional car manufacturing companies that started with Ford, the model of automobile manufacturing created by Tesla can be said to be subversive, and the car defined by Tesla does not need to compete with traditional cars, because they are not strictly an industry product, but Tesla does provide a car that is both beautiful and easy to use. And with the continuous opening up of data, platforms, software and systems, more and more people are involved in this new car manufacturing model, and the rules of the game are changed.

The change in the rules of the industry game is subversive, but perhaps due to inertia, many members of the original industry have not perceived this fundamental change. It is said that when Tesla built the first car, some traditional car manufacturers felt that they could quickly achieve Tesla's cooler functions, and Tesla's car was built "too rough" - "look at the fit and completion, as well as the panel gap and the canopy", so it is not good. Today, these automakers seem to have to admit that they can't keep up with the development of the industry.

It also reminds me of Apple's subversion of the mobile phone industry. Nokia didn't think it was good when it saw the first iPhone. While some of the features are cool, those features are also in Nokia's development plans. When Apple developed rapidly and smartphones had more and more users, Nokia had to withdraw from this market as the former boss of the mobile phone industry.

Whether it is Tesla or Apple, the way it adopts is to reset the boundaries of the industry, use new elements and resources to reconstruct the value of the industry, and thus redefine the "rules of the game" of the industry. Perhaps the above examples are not fully in line with James Cass's definition of "infinite games", but the reason why we discuss these cases with you is that we hope that everyone can understand that the logic of the development of the industry in the digital age has changed, and the rules of "limited games" can no longer be used, but the rules of "unlimited games" should be used to understand the changes in industry boundaries, to understand the logic of cooperation and collaboration, common participation, and common growth, and to change the desire to "win".

(The author is Dean of BiMBA, National Development Research Institute, Peking University, and this article is excerpted from the book "Digital China")

Responsible Editor: Fang Fengjiao Editor-in-Chief: Cheng Kai