I. Introduction

a. Company History And Background
Nintendo started as a small Japanese business by Fusajiro Yamauchi near the end of 1889 as Nintendo Koppai. Based in Kyoto, Japan, the business produced and marketed a playing card game called Hanafuda.
In 1956, Hiroshi Yamauchi visited the US, and this is when he realized the limitations of the card business and hence moved on to different arenas of the gaming world. In 1963, Yamauchi renamed Nintendo Playing Card Company Limited to Nintendo Company, Limited. During 1963 and 1968, Nintendo set up a taxi company, a "love hotel" chain, a TV network, a food company and several other things. All these attempts at expanding and diversifying the business failed, except toy making, where they had relatively prior experience with from selling playing cards.
In enormous debt, Nintendo was trying to withstand the Japanese toy industry; it was still small at this point. Due to the short product life cycle of toys, innovation and constantly new product development was vital. This was the beginning of a major new era for Nintendo.
In 1970, Hiroshi Yamauchi discovered the hidden talents of Gunpei Yoki, a maintanace engineer at the factory, who built what was later called The Ultra Hand which soon turned into a huge success, selling approximately 1.2 million units. Yokoi was soon moved from maintenance to product development.
Nintendo’s first step into the video games industry was in 1975. At the time, home video game consoles were very rare, even the seminal Atari Pong console had not yet been produced. The early 1980s Nintendo created some of its most famous and infamous arcade names. The extremely popular Donkey Kong was created and produced in 1981 and released in the arcades and on the Atari 2600, Intellivision, and ColecoVision video game systems. Then, in 1985, Nintendo hit the jackpot with its Nintendo Entertainment System and continued with their highly successful Game Boy. Nintendo continued producing innovations and alterations to these two ideas making it one of the world’s biggest video-game manufacturer.
b. Decline And Comeback
According to an article written by Seth Schiesel in the New York Times on May 26th, 2007, Nintendo was close to being marginalized about a year ago due to fierce competition from Xbox by Microsoft and the three consecutive generations of Sony’s Playstation consoles. However, what was kept hidden from the rest of the industry and the world was the fact that Nintendo’s president and chief operating officer Reggie Fils-Aime, had a new strategy that would literally over-throw the competition. He had devised a plan to revive Nintendo by stepping away from the regular targets of this industry and broadening its perspectives and reach to other prospective gamers. He tapped into the concept of “Family-Time” with the Wii and the business people with the Nintendo DS, who never thought they would see eye to eye with what Nintendo had to offer. “Last month, Nintendo sold more than four times as many Wii units (360,000) as Sony sold PlayStation 3’s (82,000), and many people still can’t find the Wii on store shelves” (New York Times, May 26, 2007).

II. Marketing Strategy

a. Evolution of Nintendo’s Advertising And Methods
Nintendo’s advertising methods throughout the years has been just like the rest of the companies I the industry, all based on the weak theory of advertising which attempts to build awareness, trial, and reinforcement. However, with the newest of Nintendo’s inventions, the Wii, a new era has begun in the gaming industry. They now focus more on the strong theory of advertising where they are trying to change attitudes and persuading old users and new target groups to buy something new.
According to an independent student newspaper called Red and Black, the editor asks a very important question which was later fully answered by Nintendo’s Wii console release, “Throughout gaming history, new systems have always sought to bring new visual horsepower to the table, but when was the last time a gaming console radically changed the way you play your games?” this was exactly what Nintendo intended for the success of it’s new console. According to Reggie Fils-Aime, “the next leap is about playing,…because playing is believing”(red and black)
Moreover, all the players in the gaming industry have always targeted a certain demographic, 5-17 old males. Never did anyone attempt to target all the ages out there in the market, except for Nintendo. This new era that has been marked by Nintendo, has taken the next step in the gaming industry, not only is it targeting all ages but also both sexes and targets from different walks of life by the introduction of its Wii console and Nintendo DS.
b. Hands-on sampling: “Color TV Game” (1977-1980), one of the first game consoles invented by Nintendo, did not benefit of any hands-on sampling, for it wasn’t very notorious at the time to use this technique in marketing products.

Then the “NES” (Nintendo Entertainment System 1983-2007) came out. It didn’t need a lot of marketing effort; at least not hands-on sampling techniques. The reason for that was the uniqueness of the console which gave Nintendo a “monopoly” over the electronic games industry.
Giving hands-on experience for users would mean trying consoles in the major gaming exhibitions and fairs.

The same thing applies to the “SNES” (Super Nintendo Entertainment System 1990-2007), which didn’t benefit from the hands-on experience as much as the Wii console.
All of this happened because of the fact that Nintendo brand was mainly associated and revolving around the infamous Mario Bros. game. Nintendo gained from Mario Bros’s success.

The “N64” (1996-2002) then was launched with a big marketing campaign including product testing in major toy retailers which allowed kids to play the new Mario 64 on their consoles, in addition to the promotional efforts.
Shoshinkai 1995 was Nintendo 64's most important pre-launch event. It was the first time the public got to experience the system.

As for the GameCube (GCN 2001-now) Nintendo arranged a number of visits to cities in many nations (12 in the U.S) and turned vacant office buildings, lofts and other offbeat venues into hip , interactive clubs, with DJs, special lighting and more than 32 game play stations, thus allowing for people to test the game consoles.
10,000 Nintendo GameCube interactives (in the U.S) were installed in retail stores to give customers the chance to sample the console before launch.

Nintendo started applying heavily the hands-on sampling technique with the launching of the “NintendoWii” game console in 2006.

Wii Ambassador Program: identified ambassadors in markets throughout the U.S. The ambassadors were of three categories: multigenerational families, hard-core gamers and modern moms. The events offered an opportunity for everyday people (the ambassadors and 30 of their friends and/or family) from every part of the U.S to play Wii for the first time and share their experiences with others.
Wii Mall Experience: Nintendo set up six interactive Wii kiosks for a two-month period in 25 Westfield shopping centers across the country (U.S specific). Trained representatives showed visitors new ways to play.
Blender: Nintendo Fusion Tour headliner Hawthorne Heights showed off some slick Wii moves and talked about some of the upcoming games for Wii.
Urban Gaming Hours: Nintendo hosted a gaming take at gatherings for urban influencers in media, fashion and music, such as Def Jam Records. These events let participants experience the Wii with their colleagues.
RISE: An issue of this sports and lifestyle magazine for teens featured thoughts from top teen athletes about their experiences sampling the Wii console.

c. From weakness to opportunity:
The Nintendo Wii was introduced in 2006 at that time Nintendo couldn’t meet the market demand. A year later just before Christmas 2007, Nintendo was still not able to meet the market demand. That led to some interesting questions which are strongly related to Nintendo’s Marketing strategy.

Is the shortage due to a scarcity of components, manufacturing process challenges for one or more of the components of the Wii? Nintendo can’t meet demand because of production or distribution issues. But the lack of Wiis in the store could also be caused by Nintendo management deciding from a marketing buzz standpoint that Wii shortages would in the long run sell more units than immediately boosting production to have store shelves full of Wiis. By adopting this strategy Nintendo created a situation in which everybody was talking about the Wii. But actually owning a Wii and playing games is a special exclusive experience. It is an interesting but risk full strategy. When a company is putting their product into the market as being unique and exclusive the actual product needs to be really unique and exclusive. Otherwise the buzz marketing strategy can become a huge failure. Another critical aspect that should be taken into account when adopting such a risk full marketing strategy is the time aspect. You can’t challenge the customers too long; they will eventually turn their focus onto the competitors.

The availability of games plays a big role when Nintendo adopted this buzz marketing strategy. They can only keep supply low and demand high if they keep being able to trigger the consumer. The best way of doing that is by spreading the introduction of new games. There is an obvious link between the consoles produced and the introduction of new games. Megahit games often drive sales of the consoles. The production and development of Wii games was a hughe problem for Nintendo short after the introduction of the Wii. But due to the high demand for the Nintendo Wii and the high sales figures other publishers have devoted more resources to Wii games and Nintendo brings more of its franchise characters to the console. In 2008 the famous Mario Kart game will be launched.

d. Buzz marketing:
For the first Nintendo consoles launched, the buzz marketing was all about the monopolistic side of the products; everyone wanted to have one of them.
They were new products, very fashionable to have one.
But with the launch of the Sony PlayStation first and the Microsoft Xbox, Nintendo was having a hard time keeping up. So the marketing efforts had to be more than tripled to stay in the game.
Buzz marketing, alongside other types of marketing efforts, was being used strongly.
The Nintendo 64 was backed up by the viral marketing to keep up with the competitors; Nintendo was displaying N64 consoles in retail stores like Toys "R" Us where people can try out the new Mario 64 game on the N64 console; this cost Nintendo about 16.5 million U.S dollars.
Something that really helped the buzz for the N64 was the fact that it was launched before the scheduled time of launch in the U.S.
The Nintendo GameCube benefited from the same buzz, in addition to the selection of opinion leaders in colleges to generate the buzz in their communities especially for the Metroid Prime game.

The strongest buzz marketing efforts for Nintendo yet were the ones for the Wii console:

How Wii Play: Wii's MySpace page at www.MySpace.com/howwiiplay has attracted nearly 1 million page views from more than 200,000 visitors, largely by word-of-mouth. Members created their own Wii videos and posted thousands of messages in the forums.

Midnight Madness: Countdown events at Toys "R" Us in New York's Times Square and at GameStop at Universal CityWalk in Los Angeles turned the last few hours before the launch of Wii into an entertainment frenzy. Nintendo fans lined up to be the first to purchase the console at the stroke of midnight as they were entertained by acrobats, music, pyrotechnics, Wii interactive on Segway scooters and a general party atmosphere.

e. Sales promotions and methods: Nintendo, throughout its different lines of products, has used all the classic methods of sales promotions; ranging from holiday special discounts to sampling, contests and teaming up with different brands and bundling.
Key retailers like Toys "R" Us, Wal-Mart and Best Buy had individual promos since the N64 came out. Blockbuster Video carried extensive in-store advertising and displays encouraging consumers to try Nintendo's latest hardware offering, whether by sampling or by renting the new game system.
There was also the Kellogg's promo, "One in 64 Wins - Instant Win Game," on 100 million cereal boxes.
Winning contests were held such as the $20 million watch-and-win promotion carried out by Nintendo, Blockbuster Video and Nickelodeon.
Pepsi was also teaming up with Nintendo in 1988; which involved the sale of nearly $10 million worth of Nintendo products to Pepsi.
Blockbuster distributed more than 10 million game pieces in its 3,500 stores and the million-circulation Nintendo Power magazine for the 'Spot the Dot' promo. Nick viewers had to hold up the pieces to their TV's to detect the winning 'dot' during its primo 8 to 8:30pm slot.
The Wii console was associated with a lot of brands such as 7-Eleven who gave out 711 Wii consoles, and they introduced limited-time-only Nintendo-themed Slurpee flavor: StrawberrWii Banana.
Pringles.com gave away 100 Wii consoles which was supported by 2 million Wii-themed Pringles canisters on display at Wal-Mart stores and 7 million Wii-themed Pringles Snack Stacks packages.
Other types of promotion used by Nintendo were examples of special edition game consoles such as the special edition Game Boy Color which comes with Pokémon Yellow, and the Platinum GameCube.
f. Sponsorship:
The latest sponsoring of Nintendo was the sponsoring of a showcase as part of the New York Film Festival.
Nintendo has challenged filmmakers to create a short film or video on a Nintendo theme for its Short Cuts Showcase. The top three films were exhibited as part of an event that was held at New York City’s Rockefeller Center, the location at which Nintendo World was situated during the establishment’s annual summer film series.
The winner received $10,000 USD in cash, a visit to the Big Apple to show the screening and a lunch meeting with the co-founder of the Tribeca Film festival.
At the 2007 Wimbledon Championship, Nintendo’s Promotional staff handed out information leaflets and ran a prize draw to win a Nintendo DS console, in addition of the Wii consoles planted there for the audience of the tennis games to try out the Wii with the Sports Tennis game.

A different approach to sponsorship was taken by Nintendo when they had Nicole Kidman sponsor their Nintendo DS ads.

Another form of sponsoring was at the "platinum-level" Hollywood bash, organized to introduce the Platinum GameCube console.
A big number of celebrities were present at this event: Christina Aguilera, Leonardo DiCaprio, Matthew Perry, Colin Farrell, Alicia Silverstone, Mark McGrath, Zach Braff.

They were all there trying the new console with the different new games alongside.

Another example of “sponsorships“ was with Sesame Street’s famous Elmo, in the game Sesame Street: Elmo's Number Journey.
III. Recommendations and conclusion: a. A Nintendo run download service, Wii Ware:
Wii Ware brings a revolution within the market for computer games. It’s Nintendo interactive virtual portal between them and their consumers. It creates an interesting opportunity for Nintendo and the way they can change the purchasing process of buying games. How can Nintendo change consumers perception of actually physically owning a game on a disk or just in their hard drive. Are consumers willing to pay for downloading or do they want to buy games within specialised stores? The success of this opportunity relies highly on the marketing communication strategy Nintendo is going to use.
Other factors that should be taken into account are the technological capacities of the Wii and then especially the low internal memory. Online gaming is essential in the market for consoles. At the moment Nintendo lies behind the pack when looking at the online aspects of gaming.
To get back in the game in the market of online gaming Nintendo should act fast and enter the market with a bang. Based on the unique features of the Wii and a aggressive marketing campaign.

b. Nintendo Portal:

As part of their marketing campaign and improving the consumers gaming experience, Nintendo should develop a personalised online portal (accessible from both the Wii console and the internet) for customers, where customers will have access to their own page with customised content. This content could contain information such as previous purchases, top 10 games and game scores etc. This will have several important marketing implications.

The first is that this could allow Nintendo to directly advertise to the likings of the customer. For example, with information on the previous purchases and most liked games, Nintendo can come up with other games and applications that can be directly advertised in the customer’s portal based on his or her interests.

The second implication is that through having these personalised portals, customer can directly interact with the company. There should be an option where customers can provide feedback on the games they play and possible improvements on the console. In addition to this, game tests can be administered, where customers can download the beta versions of games and provide their insights about the game.
By doing this, Nintendo will have access to a wealth of information that can be critical in developing new ideas for both games and future consoles. All this information will also come at a cheap price.

Another option that can be used through this marketing tool is the transfer of surveys. For example a survey can be administered through this portal at relatively low cost. And in order to get a higher response rate, customers will be provided with incentives for filling out the surveys, such as free downloadable demos. These demos will themselves be a marketing tool to create further interest and hopefully lead to future purchases.

However in order for this portal to be a success, Nintendo will have to take the necessary steps. The main aspect that the portal will have to meet is that it will have to be user friendly and well designed. This should allow customers to easily access it and be able to navigate within it with ease. A market study should be done to observe how the different age groups interact with this portal. This is because; perhaps older generations may not participate to the extent as the younger generation will. This can thus lead us into the development of sub cultures.

c. Subcultures:

Nintendo should focus on the development of sub cultures. The reason for doing so is that they can directly market to these sub cultures. Their current marketing campaign which focuses on families should be retained, however they can go more in depth by focusing on sub cultures (music, old people gaming – bridge, sudoku, and exercise games). In the following example, it can be seen that Nintendo recently applied this to their new Wii fit, which is based on exercise.

d. From Passive Gaming to Active Gaming, Wii Fit:

The introduction of the Wii Fitt will bring a total revolution within the Gaming industry. Nintendo is really focusing to create and enter new markets which offer a combined experience which is more than only gaming. They are creating a new genre within the Gaming industry; Health and exercise oriented Gaming by introducing the Wii Fit.
The Wii Fit is part of the Wii Sports experience, which is an essential future of the Wii console.

The Wii Fit is a active-play phenomenon started by Wii Sports which is spread to the whole body of the gamer, thanks to a so-called pressure-sensitive Wii Balance Board (a new controller), which comes packed with Wii Fit. The board is used for an extensive array of fun and dynamic activities, including aerobics, yoga, muscle stretches and games. Many of these activities focus towards providing a "core" workout, a popular exercise method that emphasizes slower, controlled motions. Family members will have fun staying active and talking about and comparing their results and progress on a new channel on the Wii Menu.

e. Avenues of Advertising:

In order for this marketing campaign to be successful and see the acceptation of these new offers (portal and subcultures), Nintendo needs to emphasize on how it will get this message across in its advertising.

Nintendo should use its traditional methods, using their internet portal, specialised magazines, TV ads etc. However the way in which it should be advertised should be different. They should focus on it as a product feature of the Wii console.

Additionally there should target these new subcultures in their advertising. These subcultures should be advertised as said above through the traditional methods. However they should also be advertised in different areas. For example for a Wii Golf game; can be advertised in actual golf magazines.

f. Conclusion:
Nintendo has been a pioneer in the gaming industry and has built a high reputation. Its marketing strategy should continue to focus on these core brand features. They have managed to develop a new innovative product, the Wii which has been very successful thanks to their marketing strategy. This marketing strategy has involved different methods, such as using the Fusion tour and specialised magazines. Now as Nintendo continues to develop its marketing strategy, there are some possible opportunities which could strengthen their position in the market of game consoles. These opportunities can be the introduction of the Nintendo Portal and the focus on sub cultures.

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