...2004, Nintendo had a number of strategies available to change the company position in the market. It had become more than clear that following the same tactic would not allow them to overlap its competitors. In order to growth further, Nintendo could integrate the opportunity to reduce costs and expand into other markets at the same time. Secondly, and maybe most promising, they could explore different consumers segments, which would enable Nintendo to reach market opportunities that had been ignored by Sony and Microsoft so far. VERTICAL INTEGRATION After analyzing its core competences, the costs, benefits and risks involved, Nintendo developed a strategy based on internalizing as much as possible gaining substantial influence in the final products. This allows the company to outsource primarily activities in which either they possess a low level of core competencies and/or transaction costs show clear disadvantages in internalizing. Nintendo follows a fabless production model (derived from “fabrication-less”) which means that all production processes are outsourced to external suppliers and production factories and then sent and assemble in Nintendo-owned factories. By avoiding investing money on expand vertical, the company reduce their transaction cost by outsourcing the manufacturing and still manage to maintain lower retail prices than competitors. This result in a different vertical integration compare to the previously existing model allowing Nintendo to succeed...
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...……...…......4 Competitors strategy ……………………….……………………………………. Microsoft – A differentiator………………………….…......7 Sony – A differentiator ……………………….…………………9 Analysis of competition………………………………………………………11 Nintendo’s strategy …………………………………..……………………….14 SWOT ………………………….…………………………………………………….17 Recommendations …………….………………………………………………18 References ……………………………..………………………………………….20 Introduction The first video game was created in the 1960's. Half a century later, the industry of video games represents a 42 billion Pound industry. The recent significant increase in this industry is due to the growth of broadband, the adoption of more robust wireless networks and phones, and the consolidation of game developers and publishers. This global turnover is divided in two parts: the software component is worth (32 billion pound) and the hardware component is worth (10 billion pound). Some recent analysis shows that there is about 300 millions of players in the world. It is quite difficult to find the exact number because a game or a console can be used by more than one player. The Video Game Hardware market is dominated by three main competitors: Nintendo (49%), Microsoft (30%) and Sony (21%). While the video game software market is dominated by four companies: Nintendo (19%), Activision (12%), Electronics Arts (11%) and Konami (5%). These figures indicate that Nintendo is the leader on the video games market, on hardware and software. Nintendo Company was created in 1889...
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...Case study 1 – Nintendo Strategy in 2009 Strategic Management For Bachelor of Business (Hons) 1. What are the defining business and economic characteristics of the video game console industry? What is the industry like? The video games industry in essence has brought arcade video games to the home of the user. Firms involved in the games console industry design, manufacture and bring to the market a host of video games consoles and games software. The introduction of the video game console in the early eighties allowed users to play video games at home by connecting the console to the users TV as opposed to traditional coin operated video games machines found in arcade centers. This innovation allowed the video game console industry to grow as the size of the potential market increased. The industry has seen periods of growth and decline over these past few decades with record sales of $23.1 billion in 2008. External factors are those factors relating to and impacting on business growth over which a firm has no direct influence or control. Such factors affecting growth within the video games console industry include advances in technological factors. These relate to not only how the games console looks and performs (graphics and speed) but also in the processes and operations involved in bringing the console to market (R&D and value chain). Increasing internet availability and trends towards online gaming will also impact...
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...Market Research Nintendo DS – Marketing Strategy Problem/Situation Description: Ten years ago Nintendo dominated both the console and handheld gaming industry. Today the gaming industry has grown so much that it is competing directly with the movie industry! Growth in this industry is occurring in the demographic of 18-34 year olds. Nintendo is primarily focused on 5-17 year old gamers with its first party software, especially in the handheld gaming market. As the industry expands Nintendo is struggling to retain market share percentages as their primary market of young male gamers is already saturated. Marketing Objectives: Increase Nintendo’s market share and boost sales without losing touch with the current market of 5-17 year old males. Target Audience: The suggested target audience for Nintendo to expand towards is 5-17 year old females. Budget: The three tools suggested for reaching the target consumer most effectively are TV commercials, movie theater pre-show trailers, and the actual casing and packaging of the product. A high quality 30 second commercial is estimated to cost $100,000 to $350,000 dollars. Movie trailer slides are estimated to start at $1500+ for a four week period. Casing and packaging redesign costs are unknown but estimated to be relatively small when spread over the number of units being produced. Total costs for the Nintendogs Pink DS promotion would be nearly $30 Million dollars over the span of four months. Strategy: By combining...
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...ALI FARHOOMAND NINTENDO’S DISRUPTIVE STRATEGY: IMPLICATIONS FOR THE VIDEO GAME INDUSTRY For some time we have believed the game industry is ready for disruption. Not just from Nintendo, but from all game developers. It is what we all need to expand our audience. It is what we all need to expand our imaginations. - Satoru Iwata, president of Nintendo Co. Ltd1 In the 2008 BusinessWeek–Boston Consulting Group ranking of the world’s most innovative companies, Nintendo Co. Ltd (“Nintendo”) was ranked seventh, up from 39th the previous year. 2 This recognised Nintendo’s significant transformation into an innovative design powerhouse that had challenged the prevailing business model of the video game industry. In 2000, when Sony, Microsoft and Nintendo (the “big three” of the video game console manufacturers) released their latest products, Sony's PlayStation 2 (“PS2”) emerged as the clear winner, outselling Microsoft’s Xbox and Nintendo’s GameCube. In 2006, a new generation of video game consoles was introduced by these players, precipitating a new competitive battle in the industry. Microsoft and Sony continued with their previous strategies of increasing the computing power of their newest products and adding more impressive graphical interfaces. However, Satoru Iwata, president of Nintendo, believed that the video game industry had been focusing far too much on existing gamers and completely neglecting non-gamers. Armed with this insight, the company repositioned...
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...case study The main objective that stands in front of our project is to clarify the present situation on the market of video console games. To present the strategies of the three main rival firms-Sony, Nintendo and Microsoft, to see their advantages and disadvantages, to see what their mission statement is, to see who are their customers and in which market segments the companies are trying to penetrate or have already penetrated. At the end we are going to try to predict the future development of the battle. We are also going to compare them in the above mentioned spheres, with the help of a competitor analysis. Conclusions are going to be derived after every paragraph. In order to do that we are going to use different methods including- SWOT analyses, PEST analyses etc. There were two different variants how to structure the text- first to include the PEST and SWOT analysis in the text for every firm or second variant to add it after the analysis. The second way was chosen because we decided that using this method it will be easier to compare the firms. Additionally we are going to present the information in the most understandable way by a PowerPoint Presentation. Content: 1. Introduction page 2 1.2 Profile of the gamer page 2 2. Microsoft page 3 3. Nintendo page 4 4. Sony page 6 5. Competitors analysis page 8 6. PEST analyses page...
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...it's for everyone, including the hardcore gamers. This isn't true. Therefore, everyone wants one. it appeals to both casual and hardcore gamers and has tons of casual games like MySims and WiiPlay and than nintendo busts out its killer apps like galaxy and brawl Hmm... innovative control scheme and abigger focus on casual gamers, non-gamers, and women... while continuing to bring out hardcore games * price advertising uniqueness ability for everybody to play Introducing something new to the market - Controller Getting mainstream help - Media (south park, Elderly people playing, helping stroke victims) Helping people loose weight - WiiFit, WiiSPorts Its cheaper than competition Bringing back old gamers. a big thing you should talk about is their family name. for more then twenty years nintendo has been seen as always a good choice. parents knew if they would get their kids a maro game they choose quality. explain their franchises that call to everyone. if you want to seem cool you should qoute that line about mario in that one video of that guy talking to snake explaining how mario is known through out the world. also talk about how nintendo managed to be the best thing in handheld gaming since the gameboy was created and never lost a generation * Nintendo completely changed their look in gaming, staring with the DS. The DS introduced a new way to play games. Not only is it intuitive, it can also make games easier and more accessible, like a PDA. This first opened...
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...Summary Nintendo entered the video game market in 1979 and has been a top competitor ever since. In 2006, with the release of the Nintendo Wii, they secured their competitive advantage in the video game industry. The Wii was created to establish a new standard in game control, using innovative and unprecedented interface with the Wii remote. The remote’s motion sensor capabilities allowed the user to interact and manipulate objects on the screen by moving and pointing the remote in various directions. It really changed the way games were played. In 2010, they were the market leader of that generation of video console sales growth, ahead of Microsoft and Sony. By the fall of 2010, Sony and Microsoft were starting to gain on Nintendo’s competitive advantage when they came out with their own gaming systems that had innovative controllers along with much better graphics. If Nintendo wants to keep their competitive advantage, they will need to reevaluate their strategies. External Environment If a company does not keep up with changes in the external environment, it becomes difficult to sustain competitive advantages. There are two components to the external environment to analyze. The general environment, which consists of demographic, sociocultural, political/legal, technological, economic and global conditions; and the competitive environment, which includes rivals, suppliers, customers and other factors that may directly affect a company’s success. Nintendo used the...
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...[MARKETING FUNDAMENTAL: THE SUCCESS OF THE NINTENDO] | | Summary Introduction: 3 I. General presentation: Nintendo 3 II. Porter´s model: 4 I. The Substitution Products : 4 II. The competition 5 Sony: 5 Nintendo: 5 Microsoft: 5 III. The Positioning: 6 The similarity matrix: 6 Perceptual map of Nintendo DS: 6 IV. Segmentation: The reasons of success 8 Swott : 8 Operational Segmentation 9 Why marketing communication campaign was a success? teddy 10 V. CONCLUSION: Recommendations for Sony and PSP 10 Introduction: A portable console is a video game console designed for ease of transportation. It differs from the old « classic » console in its compact design, bundling the screen, control buttons and the speakers. During the 1970s and 1980s, several companies such as Coleco and Milton Bradley offered a combination of portable and non-portable (requiring a support to be raised) electronic games. The original portable models were limited to a single game built into the machine itself and thus not meeting the multiple gaming capabilities of current portable machines. Milton Bradley Microvision introduced in 1979 is considered as the first real portable console with exchangeable video game cartridges. The Nintendo Company has dominated the handheld market since the release of its Game Boy in 1989. Nintendo is often seen as the company that made this console, popular. Unlike the PC market, the console manufacturers are not as numerous...
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...industry is the economic sector involved with the development, marketing and sale of video and computer games. It includes video game consoles, game software, handheld devices, mobile games and online games. The video gaming industry has been growing exponentially in recent years with Sony, Microsoft and Nintendo competing for the higher profits in the market. This essay will analyze each of the five forces acting on the industry: threat of new entrants, threat of substitute products or services, bargaining power of buyers, bargaining power of suppliers, and the competitive rivalry among existing firms. Then it will be determined if the video game industry is still an attractive industry for Sony. The video game industry has high entry barriers because of its high research and development costs, and capital investment needed to start a business in the console industry. The cost required to develop and manufacture a product that could be a decent competitor in this market is too great for a non-established company in this industry. The technology that is needed to be successful is too advanced for new competitors to achieve. For this reason, the threat to Sony, Microsoft and Nintendo of new entrants, was not very high in 2008. Additionally, Sony’s PlayStation, Microsoft’s Xbox, and Nintendo’s gaming systems were very well established names in the industry. The prestige of these products was so strong that it would be extremely difficult for a new company to enter the field successfully...
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...Nintendo, Co Ltd. (NTDOY) By: Sarah Thompson For Dr. Eberle Principles of Finance Research Paper November 22, 2014 Table Contents Pages Title Page…………………………………………………………………………………...1 Table of Contents……………………………………………………………………...……2 Brief Introduction & Organizational Structure…………………………………………. …3 Brief Discussion of Products, Services and Markets ……………………………...…….4 Financial Statement Summary………………………………………………………...…....5 Ratio Analysis /Interpretation / Capital Structure ………….………………………..……..6-8 Stock Valuation……………………………………………………………………….….....9 Growth Strategy & Tactics…………………………………………………………………10 Risk Exposures……………………………………………………………………………..11-12 Analyst Opinions and Professional Assessments………………………………………..13 Current Event……………………………………………………………………………….14 Conclusion………………………………………………………………………………….15 References………………………………………………………………………………….16 Brief Introduction & Organizational Structure Nintendo, Co Ltd. is a Japanese multinational consumer Electronics Company with its headquarters located in Kyoto, Japan. Nintendo is the world's largest video game company by revenue. Nintendo’s American headquarters is located in Redmond, Washington. The mission statement is “At Nintendo we are proud to be working for the leading company in our industry. We are strongly committed to producing and marketing the best products and support services available. We believe it is essential not only to provide products of the...
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...from grace” Joseph Garcia ACCK 500-115 Professor McNett 16 July 2014 Garcia 1 Nintendo, once a video game console industry giant is on the decline, doomed to fade into obsolescence if serious action isn’t taken. Nintendo was once the industry leader in video game innovation, but Microsoft, Sony, and even smartphones have eroded the grasp Nintendo once had. In all areas of industry, Nintendo’s products have competition; consoles, handhelds, and software are all matched and replicated by competitors. Holiday seasons, slashed console prices, and even promotional console bundles did not help Nintendo rise from its slump. Not only is the company lagging, but its investors are losing faith in the future prospects, and are getting increasingly worried. Nintendo’s President even issued an apology to shareholders, trying to reassure them that Nintendo will unveil a new strategy to revive the company (Industry Week). While Nintendo’s stagnation is visible in the public, on store shelves and press releases, the true story is in the company’s financial ratios. The data for the ratios discussed later come directly from Nintendo’s financial data (Nintendo Consolidated Financial Statements). The first article “Is It Time for Nintendo Kill the Wii U?” recommends that Nintendo moves out of the console and hardware industry, and continue on solely producing software. Companies such as Sega and Atari survived by pursuing the...
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...the Play Station 3, had. I feel Sony should assess the following options. (1) Focus on catering to its niche advance game segment and focus on leveraging its progress form the previous 2 generations. (2) Respond to Wii onslaught by developing its previous generation console to include a low end offering that directly competes with Wii. (3) Partner with Nintendo and others to strengthen offerings in the gaming console space, eliminating Microsoft and creating a “co-opetition” I recommend a combination of (1) and (3) to ensure sustained dominance in the gaming console market. I would not look to option (2) since it undermines SCEI’s position as a focused differentiator (Exhibit 1 in appendix) and also because this would be a knee jerk reaction forcing Sony to play on Nintendo’s terms. Analysis As evident from Porters five forces analysis (Exhibit 2) the console market is not very attractive for new entrants. . However, there is a huge growth opportunity for established players since there is only moderate buyer bargaining power and few substitutes. To substantiate the Five Forces analysis, this paper will detail a strategy that could enable SCEI to create a sustained unique advantage in the Gaming market, ensuring profitability. Conclusions are given in bold font at the end of each section. Target market question Sony has established itself as a technology leader over the last 2 generations, building and catering...
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...'Pokemon' still catching 'em all on Nintendo 3DS (CNN) -- Two new Pokémon games, "Pokémon X" and "Pokémon Y," have taken the gaming world by storm, selling more than 4 million units globally in their first two days of availability, and tracking to become the fastest-selling games of all time for the handheld Nintendo 3DS. Not bad for a franchise that got its start in 1996 on the Nintendo Game Boy handheld console. But the president of the Pokémon Company said the new games stay true to their roots of bringing people together to play while offering a new blueprint for the universe of pocket monsters. "From the beginning, communication between players has been the primary goal for the Pokémon brand," Tsunekazu Ishihara told CNN. "Today, the ability to connect millions of people around the world via Wi-Fi is why launching 'Pokémon X' and 'Pokémon Y' simultaneously worldwide was an ambitious yet important goal." Since debuting in video and card games, Pokemon has become a cultural phenomenon across the globe. There have been cartoons, cereals and a feature-length film, not to mention the national and global tournaments that draw thousands of players. "Gotta catch 'em all" is the franchise's catch phrase, referring to the player's goal of catching and training the tiny monsters to compete against other players. That's gotten significantly harder, though, with the expansion to more than 700 different known creatures in the universe. Unlike previous titles that were named after...
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...Wii: Creating a Blue Ocean. The Nintendo Way ÁREA MARKETING ESTRATÉGICO Wii: Creating a Blue Ocean The Nintendo Way Patricio O’Gorman1 RESUMEN Durante la última década, Nintendo ha tenido serias dificultades para mantenerse a flote en el mercado ultra-competitivo de los video-juegos. Su suerte se revirtió solamente cuando modificaron radicalmente su estrategia (creando un Blue Ocean), cambiando así las reglas del juego. Con el lanzamiento de la Nintendo Wii a fines del 2006, recuperaron su posición de liderazgo y se convirtieron en el principal rival a vencer por rivales de la talla de Sony (Playstation 3) y Microsoft (Xbox360). ABSTRACT For several years now, the video game industry has been locked into what can best be described as a Red Ocean, where the focus is on beating the competition, winning market share, capturing consumers and outselling the competition. Blue Ocean Strategy2 (BOS), on the contrary, focuses on creating new demand in places where there is none, thus making the pie bigger instead of fighting over whom gets the largest slice of the pie. Since the launch of the Wii (pronounced “we”) video-game system, Nintendo has taken great steps toward making the competition irrelevant. This short article is meant to analyze the company’s strategy and understand it from the point of view of BOS. JEL Classification: L1 Keywords: Video game, strategy, Blue Ocean, competition, innovation. 1. CPA (Universidad Católica Argentina), MBA (Universidad Torcuato...
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