Marketing Mix of Nintendo

Topics: Wii, Video game console, Nintendo Pages: 16 (6078 words) Published: November 2, 2010
Company History and Background
Nintendo Company is a Japanese multinational company which was founded in 1889 to produce hanafuda cards. It is now one of the largest corporations in the video game industry. An Early Nintendo Poster

The company, based in Kyoto, Japan, was founded by Fusajiro Yamauchi and was named Nintendo Koppai. Yamauchi started off his empire by producing playing cards for a game known as hanafuda. Due to the popularity of the playing cards, Yamauchi needed to hire extra staff so that that he could deal with the heavy demand for the product. In 1929, Yamauchi retired from the company and as he didn’t have a son to take over the family business he adopted his son-in-law Sekiryo Kaneda and allowed him to become president of the company. By 1947 Sekiryo had set up the company Marufuka Company Limited in order to distribute the playing cards, both hanafuda and many other cards which Nintendo had introduced over the years. At this time Nintendo were also the first corporation in Japan to manufacture playing cards from plastic, this of course made them unique which therefore lead to them being able to dominate the playing card market. In 1959, Disney allowed Nintendo the right to use their characters on the back of their playing cards. This partnership was a great success and the company sold over half a million packs in one year. Due to the success of the company Yamauchi made Nintendo public by listing the company on the Osaka Stock Exchange. Following this Nintendo decided to expand into further markets and began to experiment in other areas, for example they set up a taxi company chain, food Company and a toy making company. The toy making company was the only venture which had any success possibly due to the experience which Nintendo had from selling playing cards. Although at this time Japan was enjoying an economic boom because of the Tokyo Olympic Games the playing card industry was not doing well and had reached its saturation point, therefore leading to the price of Nintendo stock to fall by 840 yen to 60 yen. Despite their earlier success in the toy industry, Nintendo struggled to survive in this sector because of competition from already well established companies. This combined with the generally short product life cycle of toys, leading to higher costs, forced Nintendo to venture into a major new era.

The Color TV Game 6

Nintendo soon became aware of how the video games market was gathering popularity and decided to become apart of it. They first secured the rights to distribute the Magnavox Odyssesy in Japan in 1975. Following the success of this, Nintendo decided to develop their own video games for arcades and home use. Together with Mitsubishi Electric they developed “Colour TV Game Machine” which was released in 1977. The 1980s saw the creation of some of Nintendo’s most famous arcade games including Donkey Kong and the original Mario Bros. 1983 saw the release of the Famicon system, which was Nintendo’s first cartridge video game console. Sales figures for this product were quite low until the release of the game Super Mario Bros which sold over half a million units within eight weeks. However this success was short lived, following complaints from customers who claimed that the console froze while playing certain games. Nintendo were forced to recall all Famicon units at a cost of over half a million USD. By 1989, Nintendo had developed a new and more durable product, The Game Boy. Because of its uniqueness and its affordable price it sold extremely well and went on to be the best selling portable game ever produced. Super Mario Land was then released for the Game Boy which sold over 13 million consoles worldwide. The 90’s saw Nintendo release the sequel to the Famicon, The Superfamicon. This was very successful in Japan and sold out within a matter of days. However in the US the Superfamicon was less successful because of a late entry into the market...
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