...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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...Ganesamoorthy Rei Lynn Lim 30089404 30089407 30089392 Presentation Overview (1/2) •Introduction •Company Profile •Microenvironmental Analysis •PESTLE Analysis •SWOT Analysis •Porter’s 5 Forces Analysis •The Industry Life Cycle •Nintendo’s Key Success Factors Presentation Overview (1/2) •Analysis of Key Uncertainties •Analysis of Future Trends •The Scenarios & Implications •Conclusion •References A Brief History of Video Games Atari to Wii Introduction (1/2) • Video games have been around since the 1940s. • Over the decades, game machines continuously evolved to become powerful machines capable of stunning visuals and graphics. • In the mid 2000 to 2007, social media, smartphone and tablet technology entered the gaming scene. • Casual games become the norm attracting previously non-gamers into the market. Introduction (cont 2/2) • As the dominant force of the mobile and gaming market, in the next coming 5 years, where does Nintendo see itself competing with threats from smartphones and other gaming platforms taking up its share of the market? • Scenario planning : To make strategic decisions that will be a sound foundation for all plausible and possible future scenarios. Company Profile (1/3) • Founded in 1889 in Kyoto, Japan by Fusajiro Yamauchi. • Manufacturer of Hanafuda “flower” cards • Expanded in 1960s by Hiroshi Yamauchi. • Following the crash of the cards business, Nintendo entered the toy industry upon discovering Gunpei Yokoi, a mechanical engineer...
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...the immediate industry and competitive environment, there are a number of opportunities and threats for Nintendo to consider while drafting its strategic movements. As an overview, Nintendo is relevant within many different industries -primarily electronics, gaming and entertainment. Demographically speaking, Nintendo reaches one of the widest audiences for its products; people of all ages and genders can find something for them at Nintendo. Socially, it is seen as a more “family-friendly” type of entertainment compared to some rival firms. Considerations for political, legal and regulatory environments are increasingly important seeing as Nintendo is a foreign company. Technological, economic, and global forces will also be discussed as to how they play a role in Nintendo’s future. Finally, the buyers, suppliers, rival firms, new entrants and substitute products will be analyzed to construct a clearer picture of Nintendo’s competitive environment. Demographically, the videogame entertainment software industry is broadening. What used to be a younger, male-dominated industry is becoming more diversified with new needs, interests and demands from consumers. 40% of all gamers are female; the average age of a gamer is 34 years old; and 75% of gamers are 18 or older.1 These few, simple statistics highlight incredible opportunities for Nintendo. In fact, Nintendo is currently pursuing this strategically; it is pioneering the way for gamers, old and young, male and female...
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...2 0 0 8 Message from the President Throughout its history in the home entertainment arena, Nintendo has created unique hardware and software as one integrated entertainment product, with software being the primary driver. 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. Nintendo’s first hardware launch in support of the basic strategy “Gaming Population Expansion“ was a hand-held device, Nintendo DS, which allows users to play intuitively. To drive this platform, Nintendo introduced a new software lineup, Touch! Generations, which expands the definition of video games and appeals not only to traditional gamers but also to inexperienced gamers. In the future, Nintendo plans to leverage various uses of the Nintendo DS system, such as playing in public places, and to take advantage of the high market penetration of the device. Nintendo took another step toward expanding the worldwide gaming population by launching an unprecedented video game console called Wii. Since its launch, Wii has been changing the definition of the home video game console significantly. Nintendo has been making efforts to promote Wii by developing compelling software which takes advantage of intuitive...
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...Financials Revenue Net Income 2008A $3,026,000,000 -$107,000,000 $8.14 - $13.14 ATVI / NASDAQ 0.625 1,271,000,000 16,067,500 14,476,690,000 $11.39 N/A N/A $15.25 $4.74 $12.10 $11.39 Covering Analyst: Sean Golin Email: sgolin@uoregon.edu The University of Oregon Investment Group (UOIG) is a student run organization whose purpose is strictly educational. Member students are not certified or licensed to give investment advice or analyze securities, nor do they purport to be. Members of UOIG may have clerked, interned or held various employment positions with firms held in UOIG’s portfolio. In addition, members of UOIG may attempt to obtain employment positions with firms held in UOIG’s portfolio. Activision Blizzard, Inc. BUSINESS OVERVIEW university of oregon investment group http://uoig.uoregon.edu Activision Blizzard, Inc. is located in Santa Monica, CA. They are responsible for creating and publishing video games and accessories. These games are distributed and available on a wide range of platforms across the globe. Additionally, Activision Blizzard maintains and operates Battle.net, a online-game service in which players can connect via the internet and play with each other online. Activision Blizzard has created some of the most recognized and successful game franchises including, Call of Duty, Guitar Hero, Tony Hawk, Spider-Man, James Bond, Starcraft, Diablo, Warcraft, and the #1 online subscription-based game in the world, World of Warcraft. Activision Blizzard...
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...Financials Revenue Net Income 2008A $3,026,000,000 -$107,000,000 $8.14 - $13.14 ATVI / NASDAQ 0.625 1,271,000,000 16,067,500 14,476,690,000 $11.39 N/A N/A $15.25 $4.74 $12.10 $11.39 Covering Analyst: Sean Golin Email: sgolin@uoregon.edu The University of Oregon Investment Group (UOIG) is a student run organization whose purpose is strictly educational. Member students are not certified or licensed to give investment advice or analyze securities, nor do they purport to be. Members of UOIG may have clerked, interned or held various employment positions with firms held in UOIG’s portfolio. In addition, members of UOIG may attempt to obtain employment positions with firms held in UOIG’s portfolio. Activision Blizzard, Inc. BUSINESS OVERVIEW university of oregon investment group http://uoig.uoregon.edu Activision Blizzard, Inc. is located in Santa Monica, CA. They are responsible for creating and publishing video games and accessories. These games are distributed and available on a wide range of platforms across the globe. Additionally, Activision Blizzard maintains and operates Battle.net, a online-game service in which players can connect via the internet and play with each other online. Activision Blizzard has created some of the most recognized and successful game franchises including, Call of Duty, Guitar Hero, Tony Hawk, Spider-Man, James Bond, Starcraft, Diablo, Warcraft, and the #1 online subscription-based game in the world, World of Warcraft. Activision Blizzard...
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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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...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 9 7. SWOT analyses...
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...industry in nearly 12 months, Arvind Bhatia, an analyst at Sterne Agee & Leach Inc., said in a research note today. The industry is gearing up for the peak holiday shopping season beginning in November. Among nearly a dozen tent-pole game titles from major developers, Microsoft Corp. (MSFT) releases the next installment of its $3 billion Halo franchise, while Activision Blizzard Inc. (ATVI) will begin selling “Call of Duty: Black Ops II.” Console Sales Microsoft held the lead in console sales in September for the 21st consecutive month. The Redmond, Washington-based company said in a separate statement that U.S. retailers sold 270,000 of its Xbox consoles last month. That’s down 38 percent from 438,000 players sold a year earlier. Nintendo Co., based in Kyoto, Japan, said in its own e- mailed statement that sales of...
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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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...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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...Addicted to Video Games When you think of video games, you don’t think of an addiction, but video games can be as addictive as gambling or alcohol. When my son was around 3 years old, I bought a PlayStation video game system and he would sit and watch me play. One day my son asked me if he could play, it was a 2 player game, so I showed him how to play. I would play from time to time, and as time went on he became better and better. It was like nothing I had ever seen, he was a natural. As the years went by and my son grew older, he was playing more games and he had asked for a Nintendo Gameboy. He soon grew bored of it, he asked for a Nintendo Wii for Christmas and Santa made his wish come true. As the months went by, as a reward for doing chores he would receive a game instead of money. Before long, he had every accessory and he had received 22 games. The years passed and again he grew bored of the Wii, so he asked for the Xbox 360 video game system, and of course I gave in. He became more involved in playing games as the years went by. He always would ask for the newest games, the newest wireless controllers, or headsets. He began to play more in the multiplayer online game venues, and had a list of friends from all over the world. He plays the Xbox any and every chance he gets, beating complete games in as little as 4 hours, or playing campaigns in the online multiplayer area for hours on end. When he plays the game so much, it tends to get in the way of his everyday...
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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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...1. Environnemental scanning Macro Environment Macro environment is said to be the most general layer of the environment. This consists of broad environmental factors that have an impact on the organization. The PESTEL framework helps us to identify the future trends which might impinge on Nintendo and therefore identify the key drivers of change. On the other hand the five forces framework helps to understand how the competitive dynamics within and around the video game industry are changing. PESTEL Framework: This categorizes environmental influences into six main types: political, economic, social, technological, environmental and legal. Political: Factors such as taxation policies, foreign trade regulations and social welfare policies influence the video game industry. Video games have a tendency to play with the emotions of people which inturn can threaten peace and law, a country being multicultural. Therefore Government has the authority to control the contents of the video game frames. Economic: Places such as US and Japan are largely dominated by the video game business. Therefore contributing towards the GDP of their countries. Interest rates have not much impact on the video game business as they manufacture their own units. The disposable income of the consumers in the video game industry has an effect on their buying behavior. For example people who fall under a low income range may not afford to buy a video game of a high price. Nintendo’s low manufacturing...
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