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Nintendo Company

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Nintendo Company is a world class home of entertainment. Over the years, the Japan-Based company tried several small niche business such as a love hotel and a taxi company until it Video Game Company became the prominent business. Upon its introduction, it invigorated the video game industry almost single handedly.  It is a prominent player within the electronic entertainment having 21 subsidiaries and 8 affiliates world-wide. It offers gaming systems, its newest one being   the Dual Screen which is in a line of portable hand held. It has dominated the handheld gaming market focusing its demographic of males aged 5 to 17, since it launched its first game boy in 1989.  Since creation, Game Boy has been challenged by various offerings such as Sega (Game Gear and Nomad), Geo (Neo Geo Pocket), and Nokia (N-Age) but none of them has been successful at stealing the market share.

Nintendo has a historical reputation of being the longest existing company in the console video game market and the most well-known and dominant console manufacturer; it’s the leading handheld console producer in the market. Over the years,  The company has manufactured 5 TV consoles —, the Nintendo 64,  the Famicom/NES, the Super NES/Super Famicom, GameCube and the forthcoming Nintendo Revolution — plus many other differentiated handheld portables together with 7 versions of their popular games;  Game Boy, the Virtual Boy ,the Game & Watch, the Pokémon Mini, and the most recent  Nintendo DS. Nintendo Company has sold more than 2,000,000,000 video games world-wide, developing at least 180 of the 250 video games published by the company.

             Since 2008, Nintendo has ensured continued improvement of its offerings, with new and more powerful systems that effectively challenge its competitors. Apart from video games, the company is the majority owner of Seattle Mariners, a Major League Baseball team in Seattle, Washington and it has also purchased majority ownership of Gyration, a company that specializes in gyros and motion sensors, for assisting in designing the controller of the Nintendo Company.

As a company, Nintendo has strived to offer entertainment to people of all ages. This can be accurately described through a statement made by its current Chief Executive Officer, Mr. Satoru Iwata: ‘’Nintendo has focused its basic strategy  on expanding the worldwide gaming audience. To achieve this, Nintendo is encouraging as many people as possible around the world, through its unique hardware and software offerings, to experience and enjoy video game entertainment, regardless of their age, gender, language, cultural background, or gaming experience(1).’’ The target market of Nintendo USA is directed primarily towards children. The unique offering to exercise through play of Nintendo has brought attention to the potential of electronic entertainment for the older demographic.

The introduction of PSP (PlayStation Portable) by Sony has put a lot of pressure on Nintendo and decreased their market share. This is due to the fact that Sony, in gaining support for its previous gaming platforms has worked successfully with third party software designers. Sony sold over 500,000 PSP units within the first two days of the US launch thus leading to a shift in handled gaming.  The pressure caused by Sony entering the console gaming market with its PlayStation 2 was so intense between Nintendo, Sega and Sony itself to an extend that Sega was forced to exit  the market.  Currently PSP is threatening Nintendo in the handheld gaming market as it poses a huge competition in the 18 to 34 years demographic. Nintendo should hence reinforce itself as the primary offering for young adults aged between 5 and 17 as the primary and secondary data indicate.

The following case looks at the achievement Nintendo Company has achieved since 2008 up to now. The company recorded the peak annual sales and revenues in 2008; however the company saw a decline in the revenues in the 2009 and subsequent years. Despite reporting the third best performing company in 2008, Nintendo experienced a decline in the operating income, net sales and income (Consolidated Financial Statement, 2008 & 2009). Nintendo leads the ranking of gaming companies, based on software revenues

            Nintendo Company has seized a big portion of the video gaming market share. Based revenues received by selling software’s, the company leads all the gaming companies in rankings. It controls virtually half of all the Wii software sales. Titles such as New Super s, Mario Bro Wii Fit Plus, Wii and Wii Sports Resort reported, sales of over 10 million copies each in the year 2009. Nintendo Company has seized a big portion of the video gaming market share. It controls virtually half of all the Wii software sales. Titles such as New Super s, Mario Bro Wii Fit Plus, Wii and Wii Sports Resort reported, sales of over 10 million copies each in the year 2009. This would have reported record-breaking sales if it was another Companies result but given Nintendo’s previous performance, the sales were not enough to stabilize the company during recession. The reason for the decline in the sales and profits has been attributed  to the declining sales in the DS and Wii software.

 Nintendo Company since 2008

Year 2008

Nintendo Company has made great progress since its formation. However, this paper reflects on progress since 2008. In the year 2008, Nintendo maximized on the increasing number of people discovering videogames, this was possible through Wii and Nintendo DS. Besides, in 2008 the company invented more software that allowed for a direct interaction with the customers. In mid of April 2008, Wii Fit and Wii Balance Board dominated the European market. The two invited families to know about their physical fitness while having fun at home. Towards the end of the year, the company launched Mario Kart Wii and Wii Wheel accessory. The two brought together and allowed an interaction between players of all age groups and experience. In the Nintendo DS, professor Kageyama produced mathematics training and cooking guide. The guide was titled can’t decide what to eat? It provided more uses of traditional games system and also helped customers in kitchen.

In May 2008, Wii Ware, a game download service was launched. This gave customers the opportunity to download and purchase various video games from the comfort of their homes through the Wii Shop Channel. Nintendo Channel, another new service was also launched in the same year. This provided customers with a good opportunity to access news and latest information pertaining new and latest titles.  Furthermore, in June 2008, Nintendo website was expanded to cater for other countries outside Europe like South Africa. Later, towards the end of 2008, two titles for Wii. Shigeru were released. The two brought together family members as they enjoyed music variety. In 2008, the company also released Sega Superstars Tennis, a new sports game with more favored characters for the Sega video games favorites.

Year 2009

 In early 2009, Nintendo Iberica South Africa launched a branch office in Libson. This was intended to provide marketing and other commercial services for Nintendo products in the Portugal market. This was in March. Later in the same month, the company had managed to ship its 100 millionth DS system in the whole world. In April, the arrival of Nintendo DSi in Europe led to a huge increase in DS range. This handheld system comprised of new camera and other sound features. This took the entertainment experience at Nintendo more interesting. Another innovation was the Nintendo DSiWare, which enabled players to download a wide range of latest games and applications. A major release to this effect was the Mario vs. Donkey Kong.

Other progresses viz. the release of the Pokémon Platinum Version which had caused much suspense and curiosity among the customers marked the year. Additionally, the release of ‘walk with me: Do You Know Your Walking Routine?’ allowed players to keep watch of their walking routines in a rather playful manner. In summer, invention was at maxima. This was upon the launch of Wii Sports Resort and the Wii Motion Plus accessory meant to improve motion controls. Wii Fit Plus further boosted the company by giving users a better opportunity to monitor their fitness. It was further made more convenient for every person to use the hit fitness software with the invention of the Calorie Check tool which customized the workouts around a player’s personal needs. Towards the end of the year, in November, the eagerly awaited New Super Mario Bros. Wii was launched. This provided a good experience in a Mario adventure. This prevented the players from being confused before the end of the game.

 

Year 2010

In the early 2010; in January, Nintendo made a public announcement that it had intentions to distribute Monster Hunter Tri for Wii in Europe (Nintendo). This was in quest to provide a strong third party support activities for outstanding titles. The free online play support made it possible for Japanese betting phenomenon to enter the Nintendo system for the first time. Later, in February, Pink Nintendo DSi bundle, a limited edition was launched. This included a Style Boutique which gave the players an experience of running their own personal fashion Boutique. As Nintendo DSi XL entered the European market, Nintendo DS range continued to grow larger. Besides incorporating the various features of Nintendo DSi, Nintendo DSi XL enhanced the performance of large screens making them have a wider view. This made it suitable for the playing of games together. Also forming part of the major improvements are the pre-installed Nintendo DSiWare games which made the experience more suitable. The company released Xbox 360 Kinect

Nintendo's business strategy

From the foregoing analysis, it is clear that Nintendo employs an innovation strategy. The company maximizes on genre innovation in quest to maintain high profits (Boone 29). Unlike other publishers, who concentrate much on refining genres, Nintendo’s strategy has always been inventing and controlling new and latest genres. Nintendo controls these genres by making use of special hardware. In a single year, the publisher makes dozens of Mario games releases. Nintendo can also be classified among the Brand-based companies. Such companies maximizes on new genres. It is important to note how Nintendo makes money; the company raises much of its revenue by leveraging their brand recognition. This is usually done in the early and also in the mid-stages of the lifecycle of a genre. Late in the life cycle, Nintendo standardizes its genre mechanics. In the same stage, the high demand for a particular genre coupled with a hardcore population leads to the decline of brand power. Using these strategies to complement each other, Nintendo is able to enjoy a competitive advantage over its competitors. Nintendo’s major strategy is to accelerate net current sale by changing their consumer’s attitude from "must-have for every family" to "must-have for everyone".

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