Nintendo
Case Study
Design Management
Project Brief
Process Flow
This project is part of our college course - Design Management. The objective of this study was to research about a company, collect data and analyze it’s current strategies and propose a business plan based on the findings to fill the gaps in it.
Team - 3 UX Designers
Timeline - 4 weeks (April - March, 2021)
Overview
Background
Timeline
Competitors
Consumer profiling
Research & Analysis
4 P’s
Premises
SWOT Analysis
PESTEL Analysis
Ansoff’s Matrix
Strategies & Budget
Short Term
Budget Components
Long Term
Mosum Shah
Namrata Dharmadhikari
Isha Vithalani
Background
Overview
Nintendo Co., Ltd. is a Japanese multinational consumer electronics and video game company headquartered in Kyoto. One of the world's largest video game companies by market capitalization, creating some of the best-known and top-selling video game franchises. In the field of home entertainment, Nintendo Co., Ltd., primarily engage in the development, manufacture and sale of entertainment products.
Nintendo operates as a single business segment.
Subsidiary: Pokemon Company | Monolith Soft | Retro Studios | Creatures | iQue | NDcube | Mario Club | 1-Up Studio
CEO: Shuntaro Furukawa
Founders: Fusajiro Yamauchi
Year founded: 1889
Number of Employees (March 2020): 6200
Type: Public Sector Company
Annual Revenue (Mar 2020) : $ 12.12 billion
Profit | Net income (Mar 2020) : $ 2.4 billion
Timeline
Consumer Profiling
10-15 year olds: 37%
Focus on playing games like super mario bros, Mario kart 8, animal crossing or Sports resort.
Tend to not play games which are 18+ eg: Call of Duty or Halo.
Quite tech savvy compared to their parents in most cases.
16-35 year olds: 43%
Focus on playing games including 18+ games like Call of Duty series, Halo or Legend of Zelda, played by hardcore gamers
Also play casual games like Wii sports resort, Or Ubisoft games like Just Dance especially during family and friend get togethers.
Cost is a major factor in buying product.
36 and above : 20%
Play games mostly with their children or other people which include Sports games like Wii sports, and also use Wii fit especially for exercising purposes.
Mostly don’t tend to play complicated games or games made for hardcore gamers such as Call of Duty.
Direct Competitors
1977
Color TV Game 6
1980
Game and watch
1985
Nintendo
Entertainment System
1989
Game Boy
2006
Nintendo Wii
2012
Wii U
2017
Nintendo Switch
2001
The Gamecube
2004
Nintendo DS
2014
New Nintendo 3DS + XL
1995
Virtual Boy
Sony-Play station
Audience - Only targets adult gamers ages 16 and above
Main Ventures - More diverse business portfolio (products ranging from consumer and professional electronics, video games, entertainment & financial services)
Main geographical Markets - Asia, North America, Europe, Middle East, Oceania
Pricing- Stepping up to 4K gaming requires paying a premium, The PS4 Pro tacks an extra $100 onto the price of the approx 300 dollar console.
Market Share - 57%
Audience - Only targets adult gamers ages 16 and above
Main Ventures - Much more diverse products range from operating systems, application and services to gaming consoles.
Main geographical Markets - USA
Pricing - Xbox One X’s price is approx 300 USD but it adds upto $200 for 4K resolution
Market Share - 27%
Microsoft-Xbox
Product Strategy
The main product strategy in its marketing mix is to develop video games & interactive games.
This led it to the designing arcade games on its gaming console and the release of Donkey Kong in 1981 was a huge success.
Pricing Strategy
Nintendo has a pricing strategy of keeping different prices of a particular product throughout the product life cycle.
The launch phase, as it has a new technology, new user experience has a premium price range. Later as the product has been adopted well in the market, the prices are made competitive. In the declining stage, the prices are made promotional.
Place or Distribution Strategy
Nintendo has to maintain both physical and online distribution network. Physical distribution is for the availability of game consoles, gadgets which are made available in different chains of gaming stores or electrical retail stores like Walmart, Game Planet..
Promotion and Advertising Strategy
Nintendo uses different ways to launch products for example having special days of launch and time events for the launch. They invite people to come and experience their new product themselves and distribute free goodies, console cases, T-shirts.
Nintendo also uses Ad campaigns and social media to create hype about the products and announce the new launches.
4 P’s
SWOT Analysis
Research & Analysis
Strength
Considered one of the fathers of the gaming industry.
Nintendo has a widespread distribution channel with both wholesalers and retailers.
Their skim pricing strategy.
People savvy employer.
Opportunities
Expanding demographics of gaming consumers.
Technological innovations set to improve gaming experience.
Expansion by offering downloadable paid add-on content and digital distribution of packaged software.
Increasing focus on third party software development.
Threats
The growing trend of Online and Mobile gaming can prove to be a threat to both, the handheld and console gaming.
Lack of diversification outside the video games design field.
High proportion of overseas sales has exposed the company to risks relating to fluctuation in foreign exchange rates.
Weakness
Very weak online gaming foundation.
No virtual reality foothold.
Focuses mostly on video games and accessories for them.
Inability to meet margins.
Pestel Analysis
Political
Political stability in Nintendo’s major markets
Nintendo products are for personal use only and have specific guidelines if businesses are using their product.
Good record of international trade & treaties
Economic
Pandemic Impact - Nintendo announced its strongest fiscal results enjoying a 200% jump in profits.
Increasing consumption and stagnant household income is considered threat for Nintendo’s future.
Inflation rate can impact the demand of Nintendo products.
Social
Increase in smartphone adoption globally will increase digital gaming penetration.
Nintendo has suffered heavy losses in mobile gaming market.
Demographic trend is one of the key factors in demand focusing of an economy.
Technological
Shifting its focus on the console hardware, it has allowed the company to hire 3rd party developers.
Incorporating emerging technologies like Augmented reality and Virtual reality in their upcoming products.
Nintendo is dependent on other countries for their own technology.
Environmental
Nintendo faces scrutiny by environmentalists over its relationship with ethical sourcing of minerals needed to manufacture its products.
Nintendo doesn’t disclose its manufacturing processes.
Legal
Has a complex legal history and the company’s stand on copyright and infringement issues is very strict.
The joy-con drift phenomenon.
Ansoff Matrix
Market Penetration
Mobile gaming being the fastest growing market in many regions, Nintendo has partnership with Apple, to offer its games through mobile phones.
Nintendo has been successful in widening its user base and appeal to the lesser explored segments.
Market Development
Nintendo has won hearts with its mere simplicity factor.
It’s ability to enter new sectors and markets has never been hindered by its products. Eg - fitness, older age groups, females and so on.
Diversification
Nintendo realised its potential beyond the gaming industry is left unearthed.
Nintendo has started producing merchandise movies, theme parks and documentary (OTT platforms).
Product Development
The Wii’s and Switch’s disruptive strategy points towards Nintendo’s constant efforts to give only the best to its users. This has enhanced the revenues and income of the firm.
Nintendo games have always been their USP. They make their consoles compatible for both new and old games too.
Premises
Short-term
Improving online presence and community
Improving Gender portrayal
Long-term
Entering new geographic markets (Indian)
Penetrating into new sectors / industries (Education, entertainment)
Innovation through emerging technologies (VR & mobile)
Enhancing Remote Education
Long - Term
Due to schools being closed down all over world due to the COVID 19, the dependence on online education has increased.
This education method is essential but also is quite monotonous for students and due to having low attention span and not being monitored the whole time as compared to physical eduction the amount of procrastination has increased as well.
One of the most known methods of procrastination among students is playing online games eg; minecraft, fortnight etc. and even console based games.
Why?
Nintendo’s existing games do not cater to larger user base.
Animal Crossing : Animal Crossing is a popular life simulation game where players interact with humanoid animals while working on their own property. The game may seem like a chore simulator, but the fun of the game comes with the amount of customization players have for their home, clothes, and even their island as they progress through the game.
As in the game gamers can play with other people online, teachers can enter with students and form islands in the game for example french island containing elements from France and communicate with students and teach them values.
The animal crossing would be available for desktops as well as consoles so users can use it either way and would have a subscription model, where a school can buy that for a certain class to involve those students in the game.
How?
Strategies & Budget
What?
The Nintendo's brand ambassador model is ideal for higher education students since they are passionate about the learning and personal growth opportunities.
Students who are majoring in media, humanities, technology, or creative arts are already prime candidates for this kind of work.
Why?
They will definitely have some ideas on what social media platforms are popular with their peers.
It will be helpful with the latest shift towards more remote learning and virtual campuses.
Student ambassadors complement social media marketing and content marketing strategies. They give Nintendo an authentic voice, build trust with our audience, and result in more effective digital marketing campaigns.
How?
The student ambassador will take the message, package it so that it is more palatable to the younger masses. Online, they will act as a media facilitator. Offline, they might have a hand in community outreach.
They will represent the Nintendo in digital events, promoting them ahead of time on social media channels, assisting during the event, and participating in the community.
What's in it for students ?
Nintendo can :
Offer a salary
Offer a scholarship program
Arrange discounts on Nintendo products
Early access to new games or products
Entering into New Geographic Markets
Long-Term
Venturing into the Indian market and creating an official presence.
Why India? (Why will Nintendo be successful in India?)
It has offline multiplayer support.
No regional restrictions.
Its portability is another big advantage in India.
USP - Exclusive games
Nintendo’s current reach in India- Its characters, particularly Mario, are well-known in the country even though the company has no official presence here.
The success of Pokemon Go ensures that Nintendo IP is wildly popular in India and if nothing else, a Pokemon game is definitely going to pique people’s interest here.
There’s a vocal Nintendo Switch community around Super Smash Bros. Ultimate too. In fact, Dreamhack Mumbai 2018 had one of the world’s first Super Smash Bros. Ultimate tournaments.
Huge grey market already existing.
These are interesting additions when you consider that Nintendo doesn’t have an official presence in India.
How?
Pricing Strategy
India is known to be a price sensitive market.
Product pricing customized according to family gaming. Make it affordable for families -
Risks
Would Nintendo be able to cater to changing consumer preferences the way Sony and Microsoft have in India and the world over? Sony and Microsoft make a ton of revenue and an uptake in Indian markets by introducing Downloadable Content (DLC), season passes, and online subscriptions which is a risk for Nintendo.
Mobile gaming percentage is very high in India.
Since this premise is following a diversification strategy there would be an increasing risk in new markets.
Movies, documentary (OTT) already set to release.
Online Switch Community.
Smart and creative advertising by leveraging community building and togetherness concept.
Tie-ups with Influencial Indian Personalities.
Seasonal Launch
Nintendo can release a souped up, more powerful version of the Nintendo Switch while entering.
Timing is very crucial and can make all the difference. Festivals are a great time for Nintendo to announce their launch in India. Diwali is a suitable time considering the spending capacity / motivation, the gifting tradition and the overall togetherness or family spirit.
Introducing Indian context Games
Think about the Indian audience first and their preferred choice of games especially sports which is cricket primarily.
A launch during world-cup / IPL season would be ideal as it is a festival in itself for India.
Bundle Product Pricing Strategy
Family Bundle - Includes hardware, 4 controllers, game combinations as follows : Wii sports, Latest Mario Party game and Wii Fit
Just Dance (2020 version)
Fitness Bundle - Includes hardware, 2 controllers, Game combinations like Fitness Boxing, Mario Tennis Aces and NBA 2k19
Party Pack - Includes hardware, 4-6 controllers, Game Combinations as follows:
Just Dance 2021, Latest Super Mario Party and Switch Party Games
Value of the gaming industry in India from financial year 2007 to 2020, with estimates until 2022
Improving Online Presence & Community
Short-Term
Improving Gender Portrayal
Short-Term
Why?
Of the 126 games we tallied from the E3 events held by Microsoft, Nintendo, Bethesda, Ubisoft, Square Enix, and EA, as well as the annual PC Gaming Show, a paltry six centered exclusively female protagonists, while almost five times as many, 28, centered male characters.
The mere fact that protagonists are women is no guarantee whatsoever that those representations will be good ones.
Games often do center women while also reinforcing harmful stereotypes or turning those women into sexual fantasies for the benefit of male players. Example - Youngblood, Metroid Prime, Breath of the Wild.
Impact of such attitudes and normalcy of vulgar representation - hundreds of videogames to identify tropes like Women as Reward.
How?
One of the best ways to increase the percentage of female players comes from the aspect of authorship either in-game or indirectly.
Using increased number of strong female protagonists in fighting games.
Nintendo can team up with female organizations/girl guides/girl scouts in order to create a game which will encourage the female gamers and non-gamers to develop an interest in Nintendo games.
Princess Peaches & Daisy spin-offs
Change in color depiction and clothing from pastel to saturated eliminating revealing clothes.
Collaborations with gender neutral brands / influencers to be a part of making the storyline.
Gradual Shift from He/Him to She/Her when talking about game characters to normalise stepping into a female’s shoes / playing games with female protagonist just as males. This shift can start from efforts like -
How princess Daisy should be in her official Fire Flower form !
Benefits for Nintendo
Social Image - breaking the stereotype
Pioneers in making a concious effort towards this
Reaching more female gamers
Added advantage for current female users / Strengthing the current female user base and keeping them hooked
Promotion Strategy
Benefits
Decrease in level of procrastination among students and a more fun and interactive approach towards learnings and also involve various types of learnings not in the curriculum too such as value education and real life scenarios.
By this they will penetrate a new market which would be online virtual(3D) education with a wider user group and also adopt the blue ocean strategy therefore setting itself different from its competitors.
Companies like play station who do have games which involve logic, maths, memory, GK as well as reflex games.
Learning incorporated into popular games which are played by majority of students.
School going children, primary and secondary school students and even teachers.
Competitors
Competitive strength
Target audience
Long-Term
Sector
VR , Mobile Gaming and Smartphone Sector
Targeting Users
Nintendo’s core customer base tends to consist of gamers that prefer casual, intuitive gameplay mechanics over those that prefer a hardcore, more cinematic video game experience. So users can find the same casual and intuitive gameplay on their smartphones.
Innovation through Emerging Technologies
Short - Term
0 to 3 months
0 to 6 months
0 to 12 months
Mid - Term
Long Term
They can include VR in switch and come up with more harmonious kind of a system where one can play using the Switch’s Joy-con to control their surroundings in VR.
Many existing games can be made compatible with other phones too.
Short-Term
Benefits
This will help Nintendo act in accordance to changing times and needs of the users instead of resisting mobile gaming completely.
Developing atleast two new mobile games each year
New mobile games could fall under three categories:
1) New experiences with existing franchises such as Zelda, Splatoon, or Mario Kart
2) Old games such as the original Super Mario Bros. or early Pokémon remakes
3) Entirely new franchises
Mid-Term
Benefits
This will increase Nintendo’s revenue, profit, and cash asset potential, since the games would have no physical costs associated with distributing the software, and would help increase Nintendo’s total gaming market share.
Introducing a gaming smartphone (Nintendo phone).This will be done in accordance to Nintendo’s lock-in strategy and it’s main focus will be to have a console experience.
1) Few exclusive games will only be available on our exclusive Nintendo phones following the lock-in strategy to strengthen Nintendo’s user base.
2) Also not deviating completely from Nintendo’s legacy and values the smartphone can be integrated with consoles.
3) Also can connect to bigger tv screens to play when you are at home.
4) Multi-player gaming.
Long-Term
A VR system which can be used with all the consoles and can also be integrated with smartphones.
Recreation activities in a Three-Dimensional (3D) environment using compact virtual reality gaming devices.
Gaming + Smartphones = Nintendo Phones
Competitiors
While their competitors (Xiomi and Razer) are having upgrades in their existing features Nintendo has to start from the beginning not aiming to compete with them but give the users the best experience of gaming through smartphones.
Competitive strength
Unlike the competitors Nintendo is focusing on overall gaming experience.
Giving players enough free games to get them hooked with the game while also engaging more dedicated players and profiting Nintendo through in-game purchases like characters, levels, world etc. This will help Nintendo to increase its user base not only in the gaming industry but also in the smartphone industry and will also cater to casual gamers and non-gamers keeping Nintendo’s strategy alive.
Benefits
Integration strategy
Long-Term
Indian Market
The three long term strategies proposed will work in harmony and gradually complement each other to strengthen Nintendo’s current position and help it enter new markets and come up with new products to sustain in the current markets.
Online
Education
Industry
Mobile Gaming
&
VR
India is a Mobile Gaming market.
Will help in market penetration.
Budget Components
Infrastructure
Offline Stores
Transportation Costs
Manpower
Material Costs
Admin cost for New Market
Team
Management Team
Design Team
Research Team
Marketing Team
Game Development Team
Content Development Team
Character Development Team
Brand Development Team
Marketing Costs
Advertising Costs
Promotion Costs
Event Cost
- Product Launches
- Online Hosting Cost
- Offline Hosting Cost
Location Cost
Labour Cost
Merchandising Cost
Research and Development (R&D)
Development
Concept Development
- Character writing and development
- Content writing
Design Development
Prototype Development
Testing
Feedback
Research
College partnerships for student ambassador programs
Latest technology and requirements
Gamers and non- gamers behaviour
Demographic Research
User segments and their preferred games/Characters
Educational quality and acceptence for Nintendo games
Indian Market
Will make education more accessible
VR consoles combined with mobile gaming for playing games like animal crossing will enhance the experience of the users.
Give a competitive edge from its competitors like play station and xbox as they have introduced VR but not in context of education
The Indian Online Education Market is forecast to be worth $ 8.6 Billion by 2026. After a period of time, this will work in favor of Nintendo’s quest to capture greater share of market in India.
Gamified education will be a new form of education for Indian schools where teachers and students can both participate equally and also focus on topics not in the regular curriculum.
Thank you for your time!