Case Synopsis

BUS 478 – D300

Group F
Cindy Guan
Nicholas Heng
Peter Lew
Rui Cai
Ryan Torio
Tsz-Chung Cheang

March 18, 2013

Introduction
Nintendo Co. Ltd, founded by Fujisaro Yamauchi in 1889, began as a playing card business in Kyoto,
Japan and, decades later, expanded to video game production. Nintendo released its first game console, the Nintendo Entertainment System (NES), in 1985 (Nintendo, 2013). The NES became an instant hit and set Nintendo to be a pioneer in the game console industry throughout the 1990s.

Gradual Decline
Nintendo enjoyed tremendous success as it continuously released new consoles: Nintendo 64, Game Boy,
Game Boy Advance, GameCube, and more. However, the company faced increasing competition in the early 2000s from Microsoft’s Xbox and Sony’s PlayStation consoles and its market share started to decline. In 2003, Nintendo’s share price fell sharply when Sony announced its PlayStation Portable
(PSP), threatening the monopoly that Nintendo held on the portable console market (Kendall, 2009).

Change in Strategy
In an industry that competes based on delivering the latest technology, Nintendo’s newly promoted president, Satoru Iwata, took the company in a new strategic direction to restore the company’s former glory. Challenging the long-time video game market of boys, young men, and “serious gamers,” Nintendo decided to change their strategy and target those outside their traditional demographic: women, seniors, and families (MaRS, 2010). Rather than focus on the latest graphics processors, hardware design, or engine speed, Nintendo took a new “fun and social” approach to gaming and released the Wii console.
This new gaming system was based on body motions and was a simpler, less expensive hardware, which allowed it to capture a never-before tapped market of consumers who never thought they could “game.”
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