Managerial Strategy: Nintendo

Nintendo

One of the most popular Multinational Companies of Japan, Nintendo, initially started their business with handmade ‘hanafuda cards’ and later went on to invest in businesses like cab companies and even invested in a “Love Hotel”. But their business soon got a speed as they upgraded themselves into a video game company. It is one of the most influential video games companies in the World, and also the third-largest business international situated in Japan. The market value of the company is estimated at around $ 85 Billion and they have a major chare in the United States Baseball club called The Seattle Mariners.

Nintendo’ Strategy for Wii

One of the most popular products of Nintendo is the Wii, which is a home video game console. The two main competitors of Nintendo are Play Station 3 and Xbox 360. In recent sales reviews, it is seen that Wii leads over the two competitors and it was also the best selling video game console in the United States at the end of 2009. It’s a seventh-generation video game and has many advanced features along with sleek looks to appeal to both hard-core gamers and general people. And the price of the gaming console is not steep, it is as per the market standards, so the company wishes that it will be a knockout in the market.

In recent times gaming consoles are developing at a breathtaking pace. Out of the World processing power, higher graphics quality and rarely ending storage capacity, gaming is changing every day. In the case of Wii, the company is following a new strategy which is surprisingly “less is more”.

If one compares it with its closest rivals one can easily say that though it does not have many high-end features, still it is the “coolest console” around. “The other accessories that will come with the console are one wireless controller, five types of sports games, and one special ‘Nunchuk’ controller” (Saposnik, pp. 47-51). If we can see at the marketing strategies of the company we will understand that Nintendo is promoting Wii as a low-budget alternative to Play station or Xbox and it costs half the price of the two names mentioned in the market.

The company strongly believes that Wii will appeal to mostly first-generation video gamers, women, and persons who are not interested in high-end gaming but still likes interactive games. Another strong feature of it is that it is designed to appeal to people who do not have an interest in games too.

The investors have a strong belief that the Wii will work in the market. The stocks of the company are rising and it is a strong indication that Wii has created magic in the market. “The console has recently won awards like Best of Show and Best Hardware in the Game Critics Award. Spike TV also awarded it the award of ‘Breakthrough Technology’ too” (Saposnik 47-51). But there are some criticisms too.

There are some complications about the remote and the hardware is surfacing in recent times, but they are not affecting the sales of the console. One of the most significant aspects of Wii is its user-friendly components. It also shows that in the market full of high-end games and gaming freaks there are still a lot of people who can entertain themselves with games specially designed for them.

SWOT Analysis

SWOT analysis is one of the most important aspects of any organization before venturing into any business. And if we carefully look at the product we are discussing here we can surely understand the strength and weaknesses of the products. Here we will discuss them separately.

  1. Strength: The main strength of the gaming console is its user-friendly features and the easy-to-use type game box is the primary strength of the gaming console. Another very important feature of the console is its low cost so it appeals to a wider audience.
  2. Weakness: The primary weakness is quite the strength of the console. Wii is not a high-end gaming console. And the gaming market is infested with high-end games and gaming consoles, and if an avid gamer goes to buy a new gaming console he will not surely choose Wii, rather than put his money on different consoles. Also, there are not many games that can be played on this console compared to those available in the market in recent times. This makes the competition tough for Wii.
  3. Opportunity: There are a lot of opportunities for Wii in the market. The target consumers of Wii are the persons who are unable to play high-end games, middle and lower-income groups who can not buy the high-end consoles due to economic constraints and other reasons. The Wii has allowed them to enjoy the magical world of gaming. The company now needs to develop more games that can be played on the console.
  4. Threats: Though still there is no threats insight, the company has to remember that all the competitive companies are developing strategies to counter the Wii. And some criticisms are rising on the console and it is also said excess playing in the console are raising physical problems like Tennis Elbow.

Other problems

The first problem of Nintendo is the bright light interface of the gaming console. Sometimes the light of the room can create viewing problems for the players. The second problem is that it frequently slows down or hangs up. But this problem can be solved if the console is kept in a cool atmosphere. Also restarting the console can help solve the problem a bit. “Other than that online connectivity problems and some physical problems are subsequent problems faced by Wii gamers” (Saposnik 47-51).

Financial Standings

Net Sales Operating Income Income before income taxes and other subsequent expenditures Net Income
Million yen % Million yen % Million yen % Million yen %
Year ended on March 31, 2007 966534 89.8 226024 150.2 288839 79.7 174290 77.2
Year ended on March 31, 2006 509249 1.2 90349 19.0 160759 10.6 98378 12.5

Report of the Fiscal Year ending on March 2008:

Net Sales Operating Income Income before income taxes and other extraordinary items Net Income Net income per share
Six months ending in September 2007 460000 million Yen 53.9% 85000 million yen 26.7% 85000 million yen 10.2 % 50000 Million yen 8.0% 390.92
Year ending March 2008 1140000 million yen 17.9% 270000 million yen 19.5 % 290000 million yen 0.4% 175000 million yen 0.4% 1368.22

Conclusion

For the general gamers who will not mind the less high definition graphics of the gaming console, will always be interested in Wii… It has motion-sensitive controllers, and other features, and all of these come at a very affordable price which makes Wii irresistible for all ages and economic classes. If we look very closely we can see that Wii is somewhat a departure from Nintendo from what they had launched in the year 2001, the Game Cube. Lower graphics and bundled with many lesser features that are available in the market can surely backfire for the company, but Wii is a sure-shot winner. Its processor power is lesser, its setup is equally strange, but they are not stopping people to choose Wii. However, in recent sales, Wii is performing better than its competitors who have far better features than Nintendo. But Nintendo, while promoting the Wii only believed in one aspect, that they have made a gaming console that might not have all the hi-fi features and other things. The company does not wish to compete in the area of high-end gaming and is singularly focused on delivering the fun of playing computer games and the mental satisfaction it brings along with it. And with a price-sensitive market, it is a cheap way of spending time. So Wii is getting up in the market and it will surely continue its journey.

Works Cited

Saposnik, Grim. Effectiveness of Virtual Reality Exercises in STroke Rehabilitation (EVREST): Rationale, Design, and Protocol of a Pilot Randomized Clinical Trial Assessing the Wii Gaming System. International Journal of Stroke, 5.1, (2010): 47-51.

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