Nintendo’s Disruptive Strategy Case #20
Nintendo started out originally as a playing card company which then focused on electronic toys and video games. When Sony came to the United States Nintendo switched its focus to non-gamers in order to compete; the Wii was their ultimate success.
Video games were initially targeted to teenagers however with the growth the target market became young adults in their 20s and 30s. In addition, video games evolved into blue-ray/HD home entertainment consoles able to hold data files and offer online libraries.
Sony, Microsoft, and Nintendo tend to competitively battle every 5 to 6 years; Sony with the PS, Nintendo with the Wii, and Microsoft with Xbox. When Nintendo came out with the Wii they focused on non-gamers which were almost a completely different target market. The Wii’s easy-to-use controller increased popularity particularly among female gamers and with the dance mats and physical fitness games families were able to enjoy it together. Nintendos’ revenues nearly tripled from 2006 to 2008. Nintendo was able to turn its low cost hardware into a competitive advantage because they focused on characters instead of special effects. The Wii was half the cost of Xbox and PS games. Wii also included five simple games at no additional cost which was an additional key marketing strategy. In the United States, the Wii sold 600,000 units in the first eight days making $190 million in sales. Nintendo also outsources almost all production of the Wii. Their strategy was to have more than one supplier for the same part so they could get the parts cheaper which in turn further increased production. Then the Wii balance board came along, encouraging health and entertainment focusing on the non-gamers including 40 different activities from yoga to push ups.
I learned that like Nintendo you have to meet the technological demands of customers in the future, which Microsoft and Sony failed to do.
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