Competitive Strategies Case Study

Nintendo’s Innovation Strategies: A Sustainable Competitive Advantage?

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Abstract:
The history of the video game industry belongs to Nintendo, a Japan-based hardware and software manufacturer. Through a series of hit products that established many memorable characters like Mario and Donkey Kong, Nintendo garnered almost 90% market share. However, when Sony entered the industry in the 1990s, Nintendo’s position started to dwindle. Nintendo’s market share plunged drastically as the preferences of gamers shifted from simple fun games to technically superior gamers offered by Sony and Microsoft, which entered the market in 2001. Why did Nintendo, which, at one point of time was almost synonymous with video games, fail to protect its territory? Moreover, all the defence strategies of the Japanese player continuously flopped in front of the technological prowess of its competitors. When the company was almost falling like a house of cards, it launched Wii, a console with an unconventional design. Though Wii was not directly competing with Sony’s PlayStation or Microsoft's Xbox, it managed to steal substantial market share and fans of both the players. What was so unique about Wii? How did it impact the industry? Can Nintendo sit back and relax while its competitors are strategising to win back their customers? Besides all this, the case delves into the sustainability of Nintendo’s new found competitive advantage, considering the fact that the life span of a console is short.

Pedagogical Objectives:

• To understand the nature of the video game industry
• To analyse the sources of competitive advantage in this industry
• To understand Nintendo’s strategy behind launching Wii
• To analyse the sustainability of Nintendo’s strategy.

Keywords : Nintendo, Video games industry, Innovation, Competition, Sony, Microsoft, Value Chain, Business model, Consumer behaviour, Industry Dynamics, PlayStation, Competitive Strategy, Technology, Critical success factors

Contents : 
Nintendo Company Limited
Global Video Game Industry
Best Selling Video Game Genres
Factors Influencing Purchase of Video Game Consoles
Publisher Profit Margin Breakdown of Per-unit Video Game
Convergence of Consoles as Next Generation Game Consoles
Manufacturing Cost Break-up of PS3 and Xbox
Game Console Segmentation and Competitor Positioning