Nintendo: Expanding the Gaming Population through Innovation (Case #11, Notes)
Overview
Nintendo has had a great history of business success. From their beginnings in the video game industry in the 1970s through to the present, Nintendo has released a string of products in both the home console market and the handheld game market. In fact, Nintendo held a virtual monopoly in the handheld market between its introduction of the Gameboy in 1989 through to 2005.
Throughout Nintendo's history of gaming innovation, the competition has been fierce. Along each stage of Nintendo's development, Sega, Sony, and later Microsoft have also made their market offerings. Given the strength of Nintendo's competitors, Nintendo has been losing market share throughout the years. With each successive offering of home console unit, Nintendo sold fewer and fewer units compared to its competitors.
Faced with the prospect of dwindling market share and a decrease in overall industry sales in Japan, caused by the "Gamer Drift" phenomenon, Nintendo was forced to change its strategy. In order to court new gamers and to increase the gaming population, Nintendo adopted the new strategy of the "Expansion of the Gaming Population"
In line with the new strategy, Nintendo released handhelds the DS in 2004 and DS Lite in 2006, and the Wii also in 2006. These new offerings, although less technologically advanced than their competitors from Sony and Microsoft, have taken the industry by storm with their innovative user interfaces and games, and have succeeded in expanding the gaming population. With the success of the DS, the DS Lite, and the Wii, Nintendo's has once again become a market leader in the gaming industry. How can they maintain this success and create products that will help them to continue to lead the market.
Discussion Questions
1. What should be Nintendo's main strategy to keep its successful innovation of hardware and software intact?
2. Nintendo has always produced high quality first party games (games made by Nintendo internally). What should Nintendo do to encourage more third party game development? (This has frequently been Nintendo's weakness.)
3. What should Nintendo research and develop for its next handheld gaming device and next home console machine? Should Nintendo try to create something radically different and unexpected?
4. Nintendo has somewhat of a "kids" and "family" oriented brand image. Is this good or bad for the future of the company? Should Nintendo modify this image in the face of their more "teenage" and "adult" oriented competitors?
5. Should Nintendo embrace HD 720/1080 (high definition) video signals or stay with standard NTSC 480i and ED 480p video output?
6. What is the secret to Nintendo's success? Is it the software or the hardware? Is it the game creators like Shigeru Miyamoto?