Nintendo Case Analysis

Topics: Handheld game console, Game Boy, Nintendo Pages: 6 (2536 words) Published: November 11, 2012
Nintendo-The Launch of Game Boy Color

Peter MacDougall, president of Nintendo Canada, was highly anticipating the launch of the Nintendo Game Boy color version across North America and Europe on November 23, 1998. This launch was one of the most significant in Nintendo’s history; sales had declined from 1992-1996, but had finally started to recover in 1997. The responsibility of the Canadian release was paced on MacDougall, and although he planned on utilizing some elements of the U.S. launch he realized that that Canada’s launch strategy must be positioned in a different way. The Canadian market varied in comparison to the U.S. market, and would require a unique, targeted, and specific marketing strategy. Nintendo led the market in the globally lucrative video game retail industry. Nintendo 64 was released in 1996, and quickly became one of the most sought after products in the market. Sales continued to rise throughout 1997, yet in 1998 Nintendo faced a problem as some third-party game developers shifted their focus towards the Song Playstation. As Nintendo console sales began to wane, an even greater importance was placed on the market for Game Boys. Handheld games were becoming a very significant contributor to profits across U.S. and Canada. Comparatively, the handheld market in Canada was not as strong as the U.S. market. The size of the U.S. led to a more demographically balanced base of users spread apart over the country. This resulted in a larger support group of teens and adults in the U.S. Another factor that played into the situation was that Sony had a more aggressive marketing strategy across Canada, directly competing with Nintendo’s sales. However, Sony’s marketing efforts were significantly lighter in the U.S. The consequence of this was that Nintendo Canada had to allot a larger portion of their budget to focus on the marketing of consoles, rather than Game Boys. The burden placed upon MacDougall was heavy; how to appropriately segment, target, promote, market, and price the new Game Boy Color. With so many factors weighing in on the success of Nintendo’s new product, MacDougall had to find the perfect balance in order to gain the largest market share in the handheld game industry. The biggest question facing Peter MacDougall is which target market to focus his limited advertising budget towards.  Should he target the parents of kids and tweens, assuming the risk of only selling Game Boy Color units during the holiday season? Should he rather target tweens who most likely already have the current Game Boy and want to upgrade? Or should he advertise to younger kids? This could potentially drive away tweens if they would viewed the product as a toy geared towards little kids. In making the decision, it is very apparent that the United States is doing something that the Canadian Market is not. Simply looking at the money that U.S. spent on marketing, a correlation is drawn between that and the success they achieved. Sega, in the Canadian segment, spent an abundance of their budget on marketing and advertising in comparison to Nintendo. An increase in advertising dollars will be required for Nintendo Canada to spread the word via different media sources. The strategic goal of the marketing campaign is to get the consumers to see the device as a differentiated product when compared to offerings of the competitors. Money must be spent on obtaining marketing research to find exactly what Canadian consumers are looking for in handheld games, and what they do day-in and day-out. Games should be geared more towards older generations in order to gain a new kind of consumer, to encourage brand loyalty, and to gain market share. A key attribute for the new Game Boy Color is that it allows the games from the Nintendo 64 to be played on the portable Game Boy. This makes the game collection more expansive and geared towards various age groups. Marketing this unique feature would be beneficial to Nintendo in an...
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