Case 11 Nintendo: Expanding the Gaming Population through Innovation1
Introduction Satoru Iwata, President of Nintendo Co., Ltd., paced the length of his office high above the Kyoto landscape in Japan, oblivious to the view thorough the window beside him. Nintendo had just closed out fiscal year 2006 as of March 31, 2007, and had shown almost unbelievably impressive results: revenues were up 90%, operating income was up 150%, and net income was up 77% over fiscal year 2005. These results were due largely to the success of the Nintendo Wii, released just four months prior to year end, in November 2006, and was enhanced by continuing success of the Nintendo DS and DS Lite, released in 2004 and 2006, respectively. But as President, Iwata’s concern was for the future: how can Nintendo sustain such high profits? How can they maintain the competitive advantage they have gained through their latest innovations?
History of Nintendo—Before the DS and Wii From its inception in 1889, Nintendo has been known for continual innovation and product improvement. Fusajiro Yamauchi, the founder of Nintendo, began the company
This case was prepared by Daniel Feldhaus, Greg Stolt, Coralie Todo, and Scott Whitmore of the
University of Hawaii at Manoa under the supervision of Professor Masaaki Kotabe for class discussion rather than to illustrate either effective or ineffective management of a situation described (2008).
Kotabe/Helsen, Global Marketing Management, 5e
by producing and marketing a Japanese card game called Hanafuda. In 1956, Yamauchi’s grandson, Hiroshi, visited the United States to discuss the playing card industry with American playing card manufacturers. Hiroshi made a deal with Disney to use Disney characters on Nintendo’s Hanafuda cards. Soon after, the children’s playing card industry boomed and Nintendo’s playing card manufacturing business was flourishing. Eventually,... [continues]
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