NINTENDO CO., LTD. V’S THE COMPETITION

ASSESSMENT EVENT 1 - Analyse and Present Research Information
UNIT-BSBRES401A

1) INTRO
The world’s electronic games industry is dominated by three players;
*Nintendo, Microsoft and Sony.*
Further Information about the products of these companies can be found on Page 6 – Comparing Nintendo Wii To Xbox 360 And Playstation 3

This compiled research report is about Nintendo Co., Ltd.& the competition they face in the gaming industry. The purpose is to conduct market research and analysis of the corporate strategy of an organisation and the The key objective is to determine the future potential for Nintendo Co., Ltd.and the gaming industry. My research is to be based on Nintendo Australia including information Nintendo Japan HQ. The gaming console I have chosen to focus on is the Nintendo “Wii”.
As can be seen in Appendix Figure 2, The Nintendo Wii is designed in a very modest way. It is possible to purchase this product in white and black colour. The console itself is very innovative and easy to handle. The system is called motion controlled gaming and it is also possible to connect to the Internet.

1. This first section of the report we will begin with a brief look at Nintendo’s history, the target audience, products and the sources and methodology used.
2. In the second section of the report we will look at how the research was undertaken along with the analysis of the information gathered from a survey I conducted on the popular Nintendo “Wii” along with the findings and results.
3. Then final section will conclude by providing a comparison of the Nintendo Wii and and its competitors' products, along with a conclusion and future recommendations.

2) HISTORY & PRODUCTS OF NINTENDO
On 23rd September 1889, Japanese businessman Fusajiro Yamauchi founded a company he initially named Nintendo Koppai. Based in Kyoto, the company produced handmade playing cards See Appendix Figure 1 for a game called Hanafunda ('Flower Cards'). Yamauchi retired in 1929 and In 1959, Yamauchi's grandson and president of Nintendo, Hiroshi Yamauchi, secured a deal with Disney to use their characters in their playing cards.

***The name Nintendo can be roughly translated from Japanese to English as :"Leave Luck to Heaven”
***Products produced by Nintendo are:
The Game Boy line, Color TV Game, NES, SNES, Virtual Boy, Nintendo 64, Nintendo GameCube, Game Boy Advance, Nintendo DS, Wii, Nintendo DSi, Nintendo DSi XL, Nintendo 3DS, Nintendo 3DS XL, Wii U. (Wikipedia)

3 )SOURCES & METHODOLOGY
Information that will help me to complete this report can be obtained from a number of different ways and resources. There are two methods that I will use throughout the report for obtaining data and the data is going to be based on Nintendo’s ‘Wii console”.

THE INTERNET – (SECONDARY DATA) 
This method has become one of the most popular in finding information since there are many search engines available on the Internet as well as the websites of the Nintendo company itself and many other sites designed by fans and video game players from around the world. The information provided is secondary data. I also used the Textbook “Management Theory & Practice” by Kris Cole . His textbook was used throughout the report as a guide and aid for analysing and evaluating various aspects of Research & Marketing. Compared with the other sources, it did not contain as much detail about presenting research information as I had hoped.

I am conducting a SWOT analysis(Strengths, Weaknesses, Opportunities, Threats) See Appendix Figure 3. Information provides indications of some of the trends that can impact the product design process in the manufacturing and distribution sector as this was an issue for Nintendo when the Wii was announced on sale in 2006 with various stores being out of stock (Alan) 

SURVEY - (PRIMARY DATA)
Primary data can be collected through observation and by carrying out primary research methods such as questionnaires, surveys and personal interviews . The primary research that i will conduct is, in the form of a Survey on the Nintendo console “Wii”See Appendix Figure 4 Market Research Survey - Nintendo Wii. This approach is the quantitative method. The Wii has a distinctive "II" spelling that symbolizes both the unique controllers and the image of people playing it. The Wii, a name decided upon for the console, brings something revolutionary to the world of video games that sets it apart from the crowd. (Iwata Satoru, 2012)

4) THE UNDERTAKING & TIME FRAMES

The main problem that was encountered in this report was time constraints. The research took over 3 weeks to conduct as I was gathering as much information as I could from online resources. I was also waiting to hear from Nintendo Australia before I put the report together as I was hoping for some up to date relevant information I could incorporate in my findings.
The obstacles that were present were waiting on feedback from teacher support or hoping contact would have been made to touch base as well as waiting to hear from Nintendo relating to the numerous calls and emails I sent.Both reduced the time I had in completing the project. I therefore had to work fast with this and ensure I complete my research to the best of my ability, even if it meant handing it in a week or so late.

This was certainly a new experience and a different method on how to write a research report it will be something that I can learn from in the future. Good I undertook the majority of the research at home using my PC and Internet whereas the survey was conducted at relatives and friend's premises near the Wii console. I started producing in Microsoft One Note “Information Gathering section” to analyse the sources that I have used and Surveymonkey.com to create my Survey. Microsoft Word was used in the final draft and Microsoft Power Point will be used for the presentation of the report. I also began reading the theory behind market research and the gaming industry online and through various Magazines I had purchased over the years.

5) ANALYSIS OF THE PRIMARY AND SECONDARY INFORMATION

PRIMARY ANALYSIS
•Nintendo should continue to produce family fun games. Common answers were games developed for the Wii should not be targeted to hardcore gamers otherwise they will fall in the same category like its competitors.
•Candidates are now comparing the specifications of the consoles on offer and the games that will be released for them.
•Hardcore gamers are big spenders when it comes to gaming as they look at all aspects of cost, graphics, games and accessories. Action games such as MW3 OR Halo See Appendix Figure 6 for a list of hardcore games that Nintendo will not publish for the Wii.
•Male candidates wouldn’t own a Wii due to its non appealing graphics, games and limited features i.e DVD Playback
•Across younger age groups, limited time was given by parents during weekdays. The younger generation also wants to be able to interact with friends when playing games.
•The majority of owners were more likely to use their Nintendo products when surrounded by friends or family only.

I have made some conclusions that the price of the console and the quality of hardware and games it has to offer were found to be the main deciding factors when choosing a console .

SECONDARY ANALYSIS
I conducted a SWOT analysis See Appendix

•Nintendo’s low cost strategy has been effective, with the Wii being a less expensive substitute compared to the Microsoft Xbox 360 and Sony PlayStation 3
•Nintendo has to come up with an innovative strategy to maintain profitability. Without successfully targeting its customers the gaming console would fail and an effective pricing strategy must be implemented to even begin attracting customer attention.
•Nintendo came out with a strategic plan to focus on and encourage people who currently were not into playing video games; the females and the elderly to start playing and get the whole family and friends involved. They called this ‘Fun For Everyone’ .(Passani, 2010)

•Neil Long, a Special Projects, Game editor stated in his article 'The industry needs Nintendo more than ever in this ultra violent age' (Long, 2012) Nintendo is appreciated because, they have stayed family orientated and the majority of their games are colorful, sporty, fun, and based on popular T.V shows like Pokémon and Ben10.
•Nintendo has well known popular icons such as Mario, Pokemon, Donkey Kong they should use this to their advantage and make toys, game boards, bedroom accessories, clothing to their advantage
•The most surprising information that I found was that Nintendo supports “The Starlight Children's Foundation”. A non profit organisation that provides support for seriously ill children. This needs to be made more public they need people to know how they support such a good cause and their games puts smiles on these young children’s faces. They're not violent or rude like its competitors' games but happy, fun colourful games which is what these children and families in these situations want to be around.

6)FINDINGS & RESULTS

Nintendo is a great well known company with excellent qualities but they need to compete in a very fast technology advancement business. The Wii does not have the DVD player feature like Xbox and Playstation 3 which both have a Blue Ray player & the Nintendo Wii has the lowest quality video output graphics card of the actual consoles. They have to develop a new overall cost leadership to find a formula that allows them to create a better video and sound technology without affecting their price. Nintendo Wii is not the favourite console for the adult portion of the market and this needs to change.
The overall conclusion found from conducting the survey is the results show that the majority of consumers expect or would like Nintendo to deliver highly realistic graphics for the games it produces as well as a wide variety of games to choose from, including “mature action” games . It also shows that most people use the Internet as their main source of news. This points out that the majority of advertisements Nintendo commits to should be on sites such as Facebook, Twitter, and YouTube.
Nintendo needs to reclaim its rightful place as the playful, friendly and fun face of video games; for it to stay No.1 and thrive again. Bring in fun family, sporty, educational and something for the elderly . Nintendo’s ‘fun for everyone’ strategy worked in 2006 with the release of the Wii. They have built several new groups of customers which constitutes as casual gamers; however, it has damaged their biggest customer base, the “Hardcore Gamers”.
Furthermore, Nintendo priced out their biggest competitors with a lower console price of $250. The company must now focus on market research on how to satisfy all these different customer groups with one new console while remaining at a reasonable price and listening to the publics wants. The company, unlike most of its competitors, focuses more on the casual gamers, who are attracted by the simplicity and family orientation of the Nintendo brand. See Appendix Figure 5 for current unit sales (Long, 2012) (Nintendo, 2012).

Judging by the growth of sales volume, market share and popularity, Nintendo has become a giant in the gaming industry and obtained tremendous profit over the past few years. In Australia to date Wii has sold approximately 1 million units, the Nintendo DS has sold over 150 million and the Nintendo 3DS 200,000 in its first 37 weeks. (Australia, Nintendo,2010)

7) COMPARING NINTENDO WII TO XBOX 360 AND PLAYSTATION 3

XBOX
The Xbox 360 has geared its console and games for hardcore gamers. The Xbox 360 uses a wireless controller and headset (this allows fellow gamers to communicate with one another). Similar to the Playstation Xbox 360 has a 120GB hard drive which also gives the ability to store games, TV shows, movies, music and pictures.
You can connect with friends from “Xbox LIVE Marketplace,”an online service that gives the ability for online multiplayer gaming, to download games and other media and instant messaging. There is an additional $89.95 annual membership fee to join“Xbox Live” Initially, Xbox 360 was priced at $549, much higher than the Nintendo Wii, which today it is priced at $250 less. (Keli, 2010)

The Playstation 3(PS3) major feature which neither Wii or Xbox 360 has is the built in Blu-ray DVD player which neither the Wii nor the Xbox 360 have. The games available for play on the Playstation 3 are much more limited than what is available for the Nintendo Wii or Xbox 360. This system, like the Xbox 360, is geared toward the more dedicated gamer with excellent graphics and by far the best top of the line technology.

PSP 3
The Playstation 3 supports the highest number of controllers of any of these systems. Up to seven Wireless Controllers can be used at the same time. Initially Playstation3 was priced around $600 mark much higher than Nintendo Wii. (Keli, 2010 )

WII
The Nintendo Wii is designed for: children who are just beginning to enter the world of gaming, family game night, fitness needs and social gatherings (Party, special occasion etc). The games can bring back a lot of old memories for the adults. The colours, cartoon like graphics and characters are very enjoyable and fun for kids.
The Wii is not the best choice for those who are looking for a game console that’s an all purpose entertainment hub, want HD graphics, enjoy a tough online gamers community and those who prefer a wide selection of adult targeted titles. The Wii console is though more affordable for families than its competitors and it is sold in bundle packs which includes the Wii, Wii Sport a very popular game and remote controllers, strap, sensor bar that the other competitors don’t have included. The Price of sale for the Wii is around $25-$300 mark, the cheapest out of the other two (Keli, 2010)

8) CONCLUSION

To capture the hardcore gamer market that Nintendo’s competitors already have like online games such as; Halo, Modern warfare or Call of Duty would greatly expand Nintendo’s gaming market. As an alternative ideal solution, to ensure the Wii’s continued success, Nintendo should also focus on expanding their competitor’s market base. To do this, Greg a gaming Professor states (Passani, 2010) Nintendo will need to advance their technological hardware to their competitor’s standards or beyond. Nintendo must shift towards a transforming its main console into a complete home entertainment system to keep ahead of Microsoft and Sony .

Nintendo must continue pressing forward with innovative technology and game concepts. The company faces a great deal of competition, but also has many options to help maintain its current competitive advantage. Technology is a huge and ever changing part of our everyday life, and crucial to keep up to date with the latest technological tools and resources necessary to keep a businesses profits and reputation high.

To conclude, Nintendo is not all about gaming. Nintendo has many fine qualities one that needs to be mentioned is its donations to good causes, which half the population are not aware of. Nintendo of Australia and Nintendo of Europe's UK branch has been working with the Starlight Children's Foundation, a nonprofit organisation that provides support for seriously ill children undergoing treatment and their families. This is not advertised enough to the public .
Nintendo needs to focus on this important fact and let society know how they are contributing to the real world and its not all just about sales and gaming. They need to show the world how they bring smiles to everyone that Nintendo touches.

9)FUTURE RECOMMENDATIONS

To maintain the competitive advantage created by the Wii console, Nintendo must consider many possible courses of action to find new competitive advantages. I have listed a few recommendations that I believe Nintendo should consider looking into.

1.Having gained the trust of families and parents with decades of relatively nonviolent, fun games, Nintendo now has the opportunity to move into educational learning, home media entertainment and mobiles. Educational programs could be aimed at many ages, from simple spelling and math games to virtual driving lessons for sixteen year olds.

2.Nintendo has huge potential to provide social networking on the Wii and design a home media system if they offer the right functionalities and meet design expectations of modern living room entertainment devices.

3.They should consider tapping into the mobile Smartphone industry and design simple, puzzle type games for Facebook and mobile devices. This would align with the company’s current focus on simple games for non gamers and may open the brand to a new market, given the popularity of Smartphones .

4.The final recommendation that Nintendo should consider is to have yearly events and tour days throughout each state. The events and tours should include demonstration units and sales brochures informing people about the benefits and different features associated with Nintendo products. Owners of Nintendo products and fans should be advised to attend and provide input on the benefits of owning Nintendo products and participate in assisting new comers with game play showing them how much fun you can have and how Nintendo can get you from a couch potato to fitness fanatic in your own home.

SWOT ANALYSIS
S -Nintendo has opened many new doors for themselves with the invention of the Wii, but their strong brand name did not happen overnight. Nintendo has positioned themselves as a leader in the handheld gaming market with their Gameboy and Nintendo DS. Nintendo is the company that brought many gamers some of their favourite characters and games and the industry has always held them in high regards. This strong reputation, customer loyalty, and history in the industry have allowed them to bounce back.

W - Nintendo as a company seems to have some rather significant weaknesses. Being not entirely technology based, they rely on many outside suppliers and manufacturers to provide the parts for the systems. The Wii console system is lacking some core features that make it a modern and wanted console. Things like high quality graphics, high definition viewing, and a strong online network.

O - Investing in better processors, graphics cards, and HI definition video output could be all they need to start getting the console selling again. Advertising should be a major marketing strategy especially relating to Wii Fit for healthy hearts and bodies. Educational benefits such as learning maths, reading etc. There are a lot of people who think Nintendo is just about gaming., this needs to be proved wrong

T - Until Nintendo can invest into their own infrastructure and supply chain they will always be playing catch up with the other two major gaming technology company Sony and Microsoft. Each of the competitors is well funded and has the most advanced technological innovations at their fingertips

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