Nintendo Case Analysis

Pamantasan ng Lungsod ng Maynila

Group name: District 12 November 23, 2015
Members: Engr. John Martin Figuracion
Micah Camille Arroyo
Wendy Santos
Jojo Casidsid

Nintendo

Mario, Mega-man, Harvest Moon, are the games we used to play during 90's. Those games are manufactured by Nintendo, one of the greatest and leading video game companies of all time. Nintendo has been founded during 1889 to produced hanafuda cards, it's the oldest video game company in the world. It is founded by Fusajiro Yamauchi and today, Nintendo is the world's largest company by revenue.
At first, Nintendo is having a hard time on competing other companies like Sega. Sega introduced a game console called as Genesis game machine that uses 16-bit processor for faster games. Super Nes by Nintendo and Genesis by Sega released their product on Christmas. Sega won the battle because Sega's Genesis is much cheaper price than SNES and it has larger number of games can be played.
Nintendo has the strategy called "blue ocean", it is a strategy of looking a new market and make some differentiations. This strategy is more focus to look for open market and to create demand, it is not to compete with others but to create. Microsoft and Sony are video game companies also like Nintendo, they are one of the greatest competitors Nintendo. These companies lasted for some many years creating and making gamers happy by their manufactured games. Using SWOT analysis, we will compare these huge videogame companies.

Nintendo
Strengths
Weaknesses
Opportunities
Threats
Innovative game controllers like the controllers of Wii. It is based on accelerometers that enabled users to control action by moving arms
Cheaper price of consoles
Flexible in target market.
Debt free company.
They are open for new market.
Low specifications of graphics compared to other games, some games are not made for hardcore gamers.
They are not focusing on the needs and wants of the gamers
Have an additional third party will help them because of its low development cost
Develop an online game that will able the gamer to compete with other gamer around the globe
Increase market demand concerning fitness and health
Android phones, because it can be a substitute for hand held consoles
Intense competition with Microsoft and Sony
Microsoft Xbox
Strengths
Weaknesses
Opportunities
Threats
High specifications of graphics in several games that the hardcore gamers would love
Compatible to previous versions
Wifi compatible
High Prices of products compared to others

Online market
Xbox Kinect for dancers and it can be a tutor to those who wants to be a dancer
Intense competition with Nintendo and Sony
Have the same games can be played with Sony PS

Sony
Strengths
Weaknesses
Opportunities
Threats
Relatively lower price than Microsoft
High quality of games can be played


Boring game mechanics
It is for hardcore gamers only
No online services

They can expand to rental of video games to have higher income.
Have the same games can be played with XBoX
Intense competition with Xbox and Nintendo


Nintendo's strategy of excess demand played a good role at first to its company and against its competitors. For years in the market with competitors around, they were exchanging positions of what company leads than others. In business realm, it is not a goal to achieve rather a situation to improve and plan for a strategy to make them in demand. Knowing of how many your competitors are and how they priced their products, this gives the supplier the power over its consumers. With many rivals achieving to lead the market, lowering your price is like a magic trick that can turn customer's attention to your product. Nintendo's rivals give the same service, so offering a lower cost makes a big difference and people usually choose cheaper cost with the same service than the average cost. It is an effective strategy to outstand its competitors. However, Nintendo clearly said their goal is to feed everyone's satisfaction of their game products and they did. But, contrary to this, it resulted to low of supply of their products, which gave them problem in supplying to retail stores. This strategy brought both good and bad effects to Nintendo.

In millions of units. Source: Gaudiosi 2004
Holiday season is the busiest season for these videogame companies especially Nintendo as people looking to buy their relatives a present and this means a preparation for Nintendo by having an increased in stocks to meet the demand during this season. Twenty percent of annual sales of these companies are obtained during Lenten season and I believe Lenten season is one of the crucial season of the year.
Before, Nintendo had this paper-based system with hand held computers which made them to have 130 representatives travelling to their retail outlets and in each store they were recording 14 pieces of data such as sales floor inventories, prices and allocated shelf space. When the data were recorded, these were mailed to headquarters and entered into the central computer. It often took one to two months for the data to be compiled into a report, which makes the recorded reports to be useless when it had received by the managers. And obviously, these reports could not help in the decision part for the supply. Which led Nintendo to change their system. By 1989, their paper-based system was replaced by hand-held computers for all of the sales representatives. This system made lots if changes to Nintendo. As the data was entered into the machine, it was automatically transmitted back to the central computer. Messages could also be sent to from the corporate managers down to the sales representatives. While before, it takes one to two months before the data to be compiled into a report, now it just takes a day for it to be created. There are fewer mistakes than before.
It is a good idea to have a long policy of creating its own games. It's because before they make their game, they have this mindset that if we make this kind of game will it catch the interest of the people whether it is a gamer or not? Will it worth the price? Will it satisfy the gamers and non-gamers with their new inventions? They focus on what people are wanting one day and the next. Thus, thinking of how to idealized, act and improve the games they offer, concerning also to be on top of the market share, motivating them to be more competent than others. There's a lot of possible reasons that will make them to think of the possible outcomes if they make this kind of game. One of the goal of the company is reaching the non-gamers with products that playable and enjoyable to everyone. They are strongly committed in producing and marketing the best products and support services available. They believe that it is essential not only to provide products of the highest quality, but to treat every customer with attention, consideration and respect.
Xbox and Sony, the main competitors of Nintendo are known for their strategy which is called as "red ocean", it is the strategy of having an intense rivalry in primary market. The number one threat for Nintendo Wii is Xbox Kinect because they have a relative similarity of mechanics. Xbox Kinect is very well known today in our society. Having the Xbox this Kinect console, Nintendo lose relatively their own advantage and main strength which is innovative game mechanics because Xbox is equipped by dual video cameras which is assigned to pick the three dimensional movement by the user and feed this movement information to the game while the Nintendo Wii is equipped by controller based on accelerometers that enabled users to control action by moving their arms and bodies. In Kinect your whole body movement is being monitored by the dual camera while the Nintendo Wii, only the arms movement are monitored by the controller. The other threat for Nintendo is the innovative cellphones like Iphone that can play high resolution and enjoyable games like the game console and the another advantage is, cellphones are portable. it can be a substitute to game consoles and hand held devices of Nintendo. This will lose the advantages of Nintendo as a videogame company.
I recommend that this company must have open a new market as soon as possible because technology is growing fast that this company can be turn behind by mobile companies and other videogame companies like Microsoft Xbox and Sony PS. They can have an online services or they can create online games or they can be a manufacturer of mobile phones. This company must maintain and accommodate the fast phase of consumer's wants for them not to be left behind by the other company. They need to create faster and have some new innovations for them to continuously grow as a company.














Sales