Nintendo Co., Ltd: Innovating in a reactive market
Published: November 2012 · Publisher: MarketLine
Prior to the launch of the Wii, Nintendo faced many challenges in the home console market. However, the Wii disrupted the market in 2006, achieving success by employing revolutionary control methods, bolstering revenues, and expanding the ...
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Introduction
Prior to the launch of the Wii, Nintendo faced many challenges in the home console market. However, the Wii disrupted the market in 2006, achieving success by employing revolutionary control methods, bolstering revenues, and expanding the company's consumer base. Having lost momentum, the Wii has been superseded by Nintendo's Wii U, which further innovates gaming, but faces future challenges.
Features and benefits
* The publisher's Case Studies describe topics such as innovative products, business models, and significant company acquisitions.
* Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.
Highlights
The Wii as a product represented a shift for Nintendo, away from the traditional hardcore gamer market, and to a different space where the emphasis was on consumer expansion, rather than specifically targeting the already established hardcore gamer demographic.
Even though the Wii had only been on sale for four months before the end of Nintendo’s FY2007, revenues for the year stood at a 90% higher figure than the preceding year, while the company’s operating income was 150.2% higher in FY2007 than in FY2006, in turn boosting the company’s operating income ratio.
In recent years, Nintendo has seen its market threatened by the increased prevalence of the use of tablet computers, such as Apple’s iPad, to consume video game content. The Wii U's GamePad serves as both an innovation and reaction to the movement of casual consumers from dedicated gaming devices to tablets and smartphones.
Your key questions answered
* What challenges did Nintendo face in the home console market prior to the release of the Wii?
* How did Nintendo respond to challenges from competitors to take back first place in the home console market with its Wii?
* How has Nintendo employed innovation, and how successful has it been in doing so?
* How has Nintendo adapted its strategy going forward with the Wii U, and what factors influence its potential success?
Prior to the launch of the Wii, Nintendo faced many challenges in the home console market. However, the Wii disrupted the market in 2006, achieving success by employing revolutionary control methods, bolstering revenues, and expanding the company's consumer base. Having lost momentum, the Wii has been superseded by Nintendo's Wii U, which further innovates gaming, but faces future challenges.
Features and benefits
* The publisher's Case Studies describe topics such as innovative products, business models, and significant company acquisitions.
* Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.
Highlights
The Wii as a product represented a shift for Nintendo, away from the traditional hardcore gamer market, and to a different space where the emphasis was on consumer expansion, rather than specifically targeting the already established hardcore gamer demographic.
Even though the Wii had only been on sale for four months before the end of Nintendo’s FY2007, revenues for the year stood at a 90% higher figure than the preceding year, while the company’s operating income was 150.2% higher in FY2007 than in FY2006, in turn boosting the company’s operating income ratio.
In recent years, Nintendo has seen its market threatened by the increased prevalence of the use of tablet computers, such as Apple’s iPad, to consume video game content. The Wii U's GamePad serves as both an innovation and reaction to the movement of casual consumers from dedicated gaming devices to tablets and smartphones.
Your key questions answered
* What challenges did Nintendo face in the home console market prior to the release of the Wii?
* How did Nintendo respond to challenges from competitors to take back first place in the home console market with its Wii?
* How has Nintendo employed innovation, and how successful has it been in doing so?
* How has Nintendo adapted its strategy going forward with the Wii U, and what factors influence its potential success?
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OVERVIEW
Catalyst
Summary
THE NEED FOR CHANGE
Nintendo had seen its market presence decline dramatically
Nintendo failed to react to industry trends
The GameCube failed to capture the mature gamer market
Nintendo had an overreliance on established gaming franchises
THE WII CHANGED NINTENDO’S FORTUNES
The Wii was a gaming revolution
The Wii traded incremental updates for innovative rebellion
The Wii represented a strategic decision not to compete with Sony and Microsoft
Focused marketing, innovative software, and competitive pricing captured "non-consumers"
Focused marketing allowed Nintendo to appeal to the casual market
Software innovation and a focus on health changed the image of the video game market
Competitive pricing further broadened the Wii’s commercial appeal
The legacy of the Wii
Nintendo has so far conquered the seventh generation home console market
The Wii represented a geographical diversification for Nintendo
The release of the Wii bolstered Nintendo’s revenues and profits
2012 ONWARDS: THE WII U
The Wii experienced shortcomings as well as success
The Wii has been overpowered by its competition
The Wii struggled to attract dedicated third party support and mature games
Unlike its competitors, the Wii has not become a home entertainment hub
Nintendo is looking to address the Wii’s issues with the Wii U
The GamePad represents further innovation and a reaction to industry trends
The Wii U marks an attempt to recapture the hardcore market
Nintendo is hoping to broaden the Wii U’s appeal through online and multimedia capabilities
The Wii U faces some potential problems
The retention of the Wii brand is a double-edged sword
The pricing of the console marks a key turning point in Nintendo’s strategy
The competition is moving quickly this time around
CONCLUSIONS
Nintendo’s innovation has been a success in the home console market, although challenges are still to come
APPENDIX
Definitions
Sources
Further reading
Ask the analyst
About the publisher
Disclaimer
Catalyst
Summary
THE NEED FOR CHANGE
Nintendo had seen its market presence decline dramatically
Nintendo failed to react to industry trends
The GameCube failed to capture the mature gamer market
Nintendo had an overreliance on established gaming franchises
THE WII CHANGED NINTENDO’S FORTUNES
The Wii was a gaming revolution
The Wii traded incremental updates for innovative rebellion
The Wii represented a strategic decision not to compete with Sony and Microsoft
Focused marketing, innovative software, and competitive pricing captured "non-consumers"
Focused marketing allowed Nintendo to appeal to the casual market
Software innovation and a focus on health changed the image of the video game market
Competitive pricing further broadened the Wii’s commercial appeal
The legacy of the Wii
Nintendo has so far conquered the seventh generation home console market
The Wii represented a geographical diversification for Nintendo
The release of the Wii bolstered Nintendo’s revenues and profits
2012 ONWARDS: THE WII U
The Wii experienced shortcomings as well as success
The Wii has been overpowered by its competition
The Wii struggled to attract dedicated third party support and mature games
Unlike its competitors, the Wii has not become a home entertainment hub
Nintendo is looking to address the Wii’s issues with the Wii U
The GamePad represents further innovation and a reaction to industry trends
The Wii U marks an attempt to recapture the hardcore market
Nintendo is hoping to broaden the Wii U’s appeal through online and multimedia capabilities
The Wii U faces some potential problems
The retention of the Wii brand is a double-edged sword
The pricing of the console marks a key turning point in Nintendo’s strategy
The competition is moving quickly this time around
CONCLUSIONS
Nintendo’s innovation has been a success in the home console market, although challenges are still to come
APPENDIX
Definitions
Sources
Further reading
Ask the analyst
About the publisher
Disclaimer
Copyright © FriedlNet. You may share using our tools Please don't cut content from FriedlNet and redistribute by email or post to the web.