Nintendo’s History and Rise in the Gaming Industry
How the external environment might affect Nintendo’ strategy? Assess the political/legal, sociocultural/global, demographic, and technological forces.
The case study shows the competitive ability of Nintendo against its main rivals in the gaming console industry which are the Xbox 360 and Sony PlayStation. Nintendo Wii is largely considered to have influenced the gaming console industry approach. From the mid-1980s Nintendo was the primary controller of the game console business through their cartridge-based console gaming framework however that dominances ceased in the mid of 90s as Sony PlayStation beat up Nintendo. Be that as it may, Nintendo returned to gaming field on 19 November 2006 by propelling its fifth home computer game support: Nintendo Wii the immediate successor of Nintendo GameCube to rival the Microsoft Xbox 360, Sony PlayStation 3 and whatever remains of the seventh-generation video gaming frameworks[1]. Nintendo Wii expects to center around more extensive demographic than its rivals with a specific end goal to make key contrasts from its rivals by building up advancement that joins both invigorating gaming knowledge and easy to understand for pulling in the already undiscovered segment of the demographic[2]. Nintendo deployed a crucial strategy that targeted all consumers even females and the elderly through low priced products. Everybody in all of the ages even the female and elderly are occupied with to get Nintendo Wii as their technique was additionally to have low-value units reasonable to the more extensive scope of clients[3]. This was influenced conceivable by bringing down generation to cost technique. With such a fruitful strategy, Nintendo made their own commercial center that offered esteem development for their clients through cutting down cost. Despite the fact that Nintendo made enormous progress in the game industry, Nintendo Wii still has room for more upgrades and improvement. This case gives a review about the historical backdrop of Nintendo including its fall and rise periods, gives a record of the technical advancement of Nintendo’s diverse age of gaming console and gives full highlights investigation of the Wii Console Remote and Wii U Gamepad Controller. Regardless of the colossal highlights of Wii Remote and Wii Game cushion, Nintendo requires more human interface by which powers the game designers to be more inventive and imaginative, in this manner they felt more secure with Xbox and Sony PlayStation. In the long run, the Wii gamers will develop asking for a superior all the more mechanically progressed Wii in terms of HD abilities, designs and unrivaled gaming knowledge yet keeping up the effortlessness and family approach.
Nintendo Wii: Innovation and Pricing Strategy
Political or legal
The political or legal environment is crucial to the success of Nintendo’s strategy. Introduction or a change in policies will positively affect their stability in the market if these policies create a favourable political environment for the firm to succeed in the market, however, in cases where such conditions are not met, it could be futile for the firm’s strategy
Demographic
The firm’s strategy is all rounded in the sense that it targets a wider range of the demographic as compared to most of its competitors. However different regions have different definitives of their demographic characteristics’ demographic that has increased income distribution rate accompanied by the size of the population growth rate would be essential for the stability of Nintendo’s strategy
Global
increased globalization will be essential for the success of the strategy as the firm can showcase their products all over the world and regions that wouldn’t be accessible in the 90s. Moreover, this has led to the development of emerging markets such as China which is crucial to the success of the strategy due to the availability of untapped market potential
Technological
Increase in technological innovations and advancement will come in hand by boosting Nintendo current strategy, increasing generation of revenue and development and growth of the firm as well. Moreover, the penetration of internet globally and its constant increase in accessibility and affordability will allow the firm to constant making upgrades if need and continuously increasing the gaming experience for its target consumers in the long haul
Buyers-gaming consumer industries have a moderately high buying power due to the availability of competitors who have similar products and service that vary depending on the consumer preferences
Supplier-Suppliers have lost their bargain power mainly due to the fact that Nintendo’s was able to sort several suppliers after the 2007 global recession. providers have lost their haggling power. Likewise, because of the solid brand and programming advancement, suppliers tend to find it difficult to forward coordinate into a contender
Competitors- there are several rivals in the gaming industry especially Sony and Microsoft where both have good technological capabilities and an efficient response e to market changes. Sony targets the premium market has its products are advanced accompanied by high prices. Moreover, Microsoft has a similar strategy and target market as Nintendo which could be a headache[5] Substitute: PC game Arcade game and Handheld game (Mobile/Tablets) where android paved a new whole market through the smartphone industry
The Role of Political and Legal Environments
New Entrants- it is difficult for new firms to emerge and dominate the gaming industry as it requires huge investment and strong brand and a reputable market position
Nintendo created value for the customer by focusing on the demographic and responding to market changes. abolishing of cartridges for the optical disk technology led to reductions of the products prices and the development of new game frameworks that would influence the gaming industry. Also, the introduction of gaming pads that were compatible with their rivals gaming console was a big step towards their value chain[6]. The introduction or the Wii remote offered its consumers a unique gaming experience. Numerous enhancement and innovation of its products such as the Amiibo figurines where consumers would choose their favourable characters and place them in different games that were compatible .also the game developers were given platforms and motivation to develop more games for Nintendo through a virtual machine software where those games could be made compatible with other gaming consoles from different firms.
Tangible resources
- Strong cash flow
- factory
Intangible resources
- Strong company management team
- R&D team
- Marketing team
- Suppliers
- Manufacturing process
Organizational capabilities
- Ability to reach economies of scale and produce products at a lower cost than its competitors in the gaming industry
- Efficient technology innovation and gaming concepts
- Ability to predict the future of the video gaming industry
- Strong branding
The firm had resources that were both valuable and rare. Its approach to dealing with its HR, the way reliance on its history, the social complexity of its group-based improvement made Nintendo’s reputational and creative resources in-imitable. In an industry where innovation created a competitive advantage, it was no wonder Nintendo was so successful thanks to a competitive advantage over its rivals which further assisted in sharing the gaming industry[7]
Nintendo created gaming consoles that were cheap in production which made their prices more affordable and profitable to them than its competitors who had to regulate their retail prices. Development of the games are easier and quite cheaper than its competes which makes the availability of these games to the publishers much faster which gives them an opportunity of making profits easily, moreover these games are even compatible with its rivals gaming console which could capture more consumers form them.it had also a constant trend of being able to predict and adapt to the future and changes in the market, therefore, showing the ability to sustain a competitive advantage[8]
Reference list
Gamble, E., Arthur A. Thompson, and Margaret Ann Peteraf. Essentials of strategic management: The quest for competitive advantage. McGraw-Hill/Irwin, 2013.
Lee, S. J., Grace TR Lin, and W. H. Yu. “The Strategic Analysis of Driving Forces Determining Success for a Console Manufacturer in the Console Market–the Positioning Strategy of Nintendo.” (2017).
Lin, Yu-Ling, Hong-Wen Lin, and Ya-Ting Yang. “Players’ Value Structure in Digital Games.” Games and Culture 12, no. 1 2017 pp 72-99.
Osiyevskyy, , and Amin M. “Business Model Design and Innovation in the Process of the Expansion and Growth of Global Enterprises.” In Global Enterprise Management, pp. 115-133. Palgrave Macmillan, New York, 2015.
Rothaermel, Frank T. Strategic management. McGraw-Hill Education, 2015.
Satterthwaite, Mark, and John-Lindell Pfeffer. “Nintendo Co., Inc.” Kellogg School of Management Cases 2017 pp. 1-19.
Teipen, Christina. “The Implications of the Value Chain and Financial Institutions for Work and Employment: Insights from the Video Game Industry in Poland, Sweden and Germany.” British Journal of Industrial Relations 54, no. 2 2016 pp.311-333.
Yamazaki and Kiyohiro. “Competitive Advantages of a Firm without Fundamental Technology: A Case Study of Sony, Casio and Nintendo.” World Academy of Science, Engineering and Technology, International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering 10, no. 12 2016 pp. 3980-3990
E. Gamble, A. Arthur. Thompson, and Margaret Ann Peteraf. Essentials of strategic management: The quest for competitive advantage. McGraw-Hill/Irwin, 2013.
Satterthwaite, Mark, and John . “Nintendo Co., Inc.” Kellogg School of Management Cases 2017 pp. 1-19.
Teipen, Christina. “The Implications of the Value Chain and Financial Institutions for Work and Employment: Insights from the Video Game Industry in Poland, Sweden and Germany.” British Journal of Industrial Relations 54, no. 2 2016 pp. 311-333.
T. Rothaermel. Strategic management. McGraw-Hill Education, 2015.
J. Lee, and W.Yu “The Strategic Analysis of Driving Forces Determining Success for a Console Manufacturer in the Console Market–the Positioning Strategy of Nintendo.” 2017.
Lin, Yu-Ling, and Ya-Ting Yang. “Players’ Value Structure in Digital Games.” Games and Culture 12, no. 1 2017 pp. 72-99.
Osiyevskyy, and M. Amin. “Business Model Design and Innovation in the Process of the Expansion and Growth of Global Enterprises.” In Global Enterprise Management, pp. 115-133. Palgrave Macmillan, New York, 2015.
Yamazaki and Kiyohiro. “Competitive Advantages of a Firm without Fundamental Technology: A Case Study of Sony, Casio and Nintendo.” World Academy of Science, Engineering and Technology, International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering 10, no. 12 2016 pp. 3980-3990.
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