Nintendo’s Strategy in 2009 – Group D

During this week, Lincoln Memorial University’s MBA students in MBA 595 will analyze top corporate organizations.

In this blog topic, Group D consisting of Maria Paganelli, Angela Sebby, Phillip Singer, and Jessica Vick will evaluate ‘Nintendo.’

Executive Summary

Nintendo Company Ltd. was founded in 1889 in Kyoto, Japan, with playing cards and then expanded in 1969 as an electronic toys company. In 1981, Nintendo introduced the Donkey Kong and became well known in North America, Asia, and Europe.

After the launch of this game, the company became one of the top leaders of the video gaming industry by successfully launching different types of video game consoles and handheld game systems. Most of them were best-selling games which resulted in market success with sales surpassing millions units worldwide.

In 2006, Nintendo’s major introduction was the Wii, with its innovative wireless remote controllers; where players are able to hold the control and use his or her whole body as a controller. By being unique in its industry, it set out to market a game to a wide range of customers and demographics, which also resulted in additional impressive global top-selling sales (Gamble and Thomspon, 2011).

While a leader in gaming, Nintendo also has two strong competitors, Microsoft and Sony, which target a completely different set of demographics and concentrate on high technology graphics and skill levels. 

In order to remain a strong contender in the industry, Nintendo has set out to widen its target markets instead of competing on the same level as its competitors. 

See: http://animoto.com/play/o3r63ZNDzw9eayEP3Y3q2g

Please share your insight on this topic.

 

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19 thoughts on “Nintendo’s Strategy in 2009 – Group D

  1. Great Job, group D! Nintendo has truly been an innovator in the gaming world since its inception. I had no idea the whole thing started with playing cards or that it started so many years ago. I’ve been around long enough to have had at least one of each of the Nintendo models in my home, and it started with my son getting the original Nintendo console on Christmas morning. It was very interesting to see the evolution of the Nintendo consoles in your Animoto. Nintendo is an example of a company that knows how to develop and carry out a strategy for sustainability; they have been doing so for 122 years now!

  2. This was a great presentation. This was a very interesting topic to me, because I have always been playing video games. The first Nintendo was my first system, and I have always purchased each new generation of console. Nintendo has always been innovative with their console technology and their games, and they continually try to develop a system that is more innovative than the last (Gamble and Thompson, p. 372). I agree with the statement in the presentation that Nintendo needs more challenging games that the other console developers seem to have. It would make Nintendo consoles and games a little more popular to the games who like games from Microsoft and Sony.

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

    • I believe so too Zachary. If they did, they could encompass even some of the Microsoft and Sony players giving it even more of an edge over the competition.

  3. I think you all did a wonderful job on your case presentation. The presentation was very informative, yet fun at the same time. Nintendo is a great company, a perennial power in the gaming market. I remember playing Super Mario Brothers as my very first game at around 3. It was true love at first sight. I have loved and appreciated videogames ever since. Nintendo was not necessarily ground breaking in bringing consoles to the home, but they brought them with the most successful hardware and software of the time. They continually set the bar higher for the competition. I loved the transformation of the system in the video. It was a great job of showing how the product continually evolved over time. With the introduction of the Wii, Nintendo continued its quality line of products. Gamble and Thompson state, “Nintendo is able to offer Wii owners a large selection of fun-for-all-ages games because of the strength of its internal game development operations and its extensive network of third-party game developers” (p. 104).

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

  4. I really enjoy doing this case study because I could verify how a good strategic vision and implementation can drive a company to success. The most clever and important thing that Nintendo did was when they changed their strategy; by focusing on differentiate their next product, which was Wii, consequently left behind its competitors. [By] abandoning efforts to beat out competitors in existing markets and, instead inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand (Gamble, Thompson Jr., 2011, p. 129). By this way, Nintendo acquired not only casual customers but others generations; they brought all generation of families together in the same activity.

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

  5. I grew up playing the Nintendo systems and have always been a fan of their game consoles. I still think the Nintendo 64 system was one of the best systems ever created. However, as I grew older I often felt that Nintendo system were developed for a younger demographic especially with the development of the Game Cube. It looked more like a Jack in the Box then a game console. However that perception changed when Nintendo introduced the Wii. While the games still appeal to the younger generations Nintendo was still able to market the console to older demographics due to its unique remote control. It not only brought a new innovation to the gaming industry it also introduced its system at much lower cost than market competitors. The innovation of its Wii system and the low cost strategy has lead to Nintendo’s recapturing of it’s title of market leader.

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

    • Nathan,

      It definitely went the way of younger children. Those about 10 years preferred the more intense games on Sony and Microsoft. It is great to see them recapture some of that market with the fun group games, but also the older generations as well.

  6. Nintendo has maintained a hold on the market because they are very focused on creating a gaming scenario that appeals to the majority of players. In recent years, they have not necessarily pandered to “power gamers,” and instead have focused on creating a product that anyone would enjoy playing. That being said, the new iteration of Wii, the Wii U, has left many critics puzzled. It consists of a controller that also houses a pen-sensitive screen that will interact with the new gaming console. Nintendo has been successful for many years, but it seems this new hardware version offers little innovation in an increasingly competitive gaming marketplace.

    Nintendo Network @ E3 2011 – Introducing Wii U. (n.d.). Nintendo Network @ E3 2011. Retrieved November 12, 2011, from http://e3.nintendo.com/hw/#/introduction

  7. Great presentation Group D! By not playing video games, I have realized how ignorant I am in the video game industry. This presentation has made me aware of the popularity and market expanse of video games. Moreover, Nintendo deserves recognition for staying “on top of their game” for over a century. With the rapid technological evolution and ferocious competition, Nintendo’s CEO Satoru Iwata realized that there was a need to target an untamed sector of the population, “Iwata wanted to totally change the market’s perception of the Wii by providing an entirely different video game playing experience that would be less intimidating to casual gamers and to people had not previously played video games” (Gamble and Thomson, 2011, p.369). This was an ingenious move since it placed Nintendo in the top selling video game console list from 2006 to 2009, thereby rescuing the declining video game giant from threatening waters.

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

    • Miguel,

      As you, I am not a video game player, but I really enjoyed doing this case study because I could verify how a good strategic vision and implementation can drive a company to success. Nintendo’s market research did well in realize that technology was becoming too complex and that was time to bring up something different and simpler for customers. Nintendo proved that is worth taking risk, focus on its vision.

  8. This is a great case. Nintendo did such a great job scouting out their competition and capitalizing on their downfalls. While their competitors Sony and Microsoft were offering basically the same concepts, designs, and functionality, Nintendo did some great research and looked into a field that no one had experimented with before. Not only did they introduce the Bluetooth wireless controller, but they also entered the gaming console at a much lower price. Thanks to all their hard work and strategy research, they were able to 51.6 million Wii consoles – outselling the Xbox and Playstation 3 by 2 (Gamble, Thompson, p. 374). I know I personally purchased the console for both of the reasons that I mentioned previously. One because I couldn’t wait to play with the new wireless Bluetooth simulation remote, and two because it was much cheaper and affordable. Way to go Nintendo!

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin

    • Lindsey,

      Nintendo was very clever when they changed their strategy; by differentiate their product, which left behind its competitors. In this market that the competition is so severe, Nintendo was able to develop an innovative product for a cheaper price and made us all curious to play it. Nintendo proved that there is always a way to do sometime different and good, even though it is not the last technology.

  9. I thought that the group did an excellent job with their presentation of Nintendo. Like many others in the class I was not aware that Nintendo got its start so long ago from the simple game of cards. Currently I feel that the success of Nintendo has been due to the Nintendo’s Wii which has created a first mover competitive advantage for the company in the video game industry. The first mover advantage is a form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty. The company also has additional time to perfect its product or service before if faces competitive forces (Gamble and Thompson, p.130-131). In this case, Nintendo’s Wii has given the company the first move advantage with its motion sensing technology.

    Gamble, J. E., & Thompson, A. A. (2011). Essentials of strategic management: The quest for competitive advantage. New York, NY: McGraw-Hill/Irwin.

  10. There is no doubt that the gaming industry is a huge industry. Industry sales in 2008 reached a record high of $23.1 Billion; however, the recent recession has produced a drop in sales for the industry (Gamble and Thompson, p. 377). Nintendo’s strategy to appeal to a larger target market is a great idea. Appealing to larger market is crucial especially when an industry slump is in effect. Appealing to a larger target market will help Nintendo grab some market share while also helping it better compete with its rivals, Microsoft and Playstation.

    Gamble, J., & Thompson, A. (2011). Essentials of Strategic Management. The Quest for Competitive Advantage. New York, NY: McGraw-Hill Irwin.

  11. My first introduction to video games was back in the 1970s with Pac Man. Who can forget that munching little face gobbling things up all over the screen? My neice and nephew had ths game and then I started to see it popping up in establishments all over town. People became addicted to playing it and I never understood why…until I had children of my own. By that time the games had advanced way beyond Pac Man. Through the years, the competition in the market has been really interesting to watch. All of the companies have done fairly well, even if one loses market share for a bit they always come back up…one year it is Xbox the next it is PlayStation, then it is Ninetindo, then…. It is like the horse races. The companies behind these products are solid companies and their possibilities are endless. They continue to promote creativity and innovation and peole love playing these games in their idle time. Even though the recession is impacting their profits the gaming industry lives on! “Analysts believed that the effect of the recession brought on by rising oil prices, subprime housing mortgage…would have a continuing effect…..but nevertheless, also believed that Nintendo must continue to expand its customer base and defend its market share from its rivals.” It is the same with Microsoft and Sony.

    Gamble, J., & Thompson, A. (2011). Essentials of Strategic Management. The Quest for Competitive Advantage. New York, NY: McGraw-Hill Irwin.

  12. Great job on the presentation. Seeing all those systems progress through to the Wii brought back so many memories. It also made me realize how much time I have wasted in front of many of those consoles. As a side note, my 11 year old son loved it too. Nintendo has always been one of those companies that innovates at the right time. They were one of the first players on the market with “better” quality graphics. Then they were one of the first with 64bit processing. Then the Wii, we all know what that has done to the industry, simply look at Playstation Move and Microsoft Kinect. Nintendo has been brilliant in finding a strategy that differentiates themselves from their competition.

    Gamble, J., & Thompson, A. (2011). Essentials of Strategic Management. The Quest for Competitive Advantage. New York, NY: McGraw-Hill Irwin.

  13. I can completely agree with your comments! Thanks for your post. It was fun to take a trip down memory lane while doing research on the project.

  14. I would like your comment removed. Copying and pasting someone’s writing William Moura isn’t cool and is plagiarism. Everything from line 6, I really enjoy…until the 4th or 5th line from the bottom up to Nintendo President… is all of my work. http://www.squidoo.com/classicvideogamesplus created in 2008 I am hoping this is removed because DMCA’s to servers or adsense accounts are a pain to do but have done them in the past. I make money from my blogging on various mediums and take this and plagiarism seriously.

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