Innovation Organization Nintendo
Nintendo – Innovation Organization
Role R&D
Quoting from the Nintendo Annual Report 2012, the company strategy is the expansion of the gaming population, which is to encourage as many people in the world as possible, regardless of age, gender or gaming experience, to embrace and enjoy playing video games. Nintendo aims to expand their digital business by offering downloadable, paid add-on content, digitally distributing packaged software and so forth to adapt in environment changes surrounding the video game market and creating new business opportunities.
We can conclude from the statement that to survive in video game industry, Nintendo needs to be adaptive to the market change. In order to be adaptive, innovation is become day to day business to Nintendo. Nintendo’s research and development is the source to create innovation to maintain the market share in video game industry. As top three players in video game industry in the past decade, Nintendo’s R&D expenses consistently increase for this past 10 years as is shown in figure below. In this past decade, the strong competition between the top three players in the game industry force Nintendo to fight harder to delivered innovative technology. One of the most notably investment was during 2005 that can be seen in figure below. The following figure shows the percentage of R&D expenses compare to the sales in that particular year. Many industry watchers have predicted that the future of gaming will be largely decided between Sony and Microsoft because of their technological capabilities, which are demonstrated in their cutting-edge game console PlayStation 2 and Xbox 360, respectively. Market share as of December 31, 2005, Nintendo only has 14.7% (GameCube), compared to Sony’s 68.3% (PlayStation 2) and Microsoft’s 17% (Xbox). [1]
As mention in their 2005 Annual Report, Nintendo strategy is to expand the video game market by utilizing this wealth of talent and applying their game development
Role R&D
Quoting from the Nintendo Annual Report 2012, the company strategy is the expansion of the gaming population, which is to encourage as many people in the world as possible, regardless of age, gender or gaming experience, to embrace and enjoy playing video games. Nintendo aims to expand their digital business by offering downloadable, paid add-on content, digitally distributing packaged software and so forth to adapt in environment changes surrounding the video game market and creating new business opportunities.
We can conclude from the statement that to survive in video game industry, Nintendo needs to be adaptive to the market change. In order to be adaptive, innovation is become day to day business to Nintendo. Nintendo’s research and development is the source to create innovation to maintain the market share in video game industry. As top three players in video game industry in the past decade, Nintendo’s R&D expenses consistently increase for this past 10 years as is shown in figure below. In this past decade, the strong competition between the top three players in the game industry force Nintendo to fight harder to delivered innovative technology. One of the most notably investment was during 2005 that can be seen in figure below. The following figure shows the percentage of R&D expenses compare to the sales in that particular year. Many industry watchers have predicted that the future of gaming will be largely decided between Sony and Microsoft because of their technological capabilities, which are demonstrated in their cutting-edge game console PlayStation 2 and Xbox 360, respectively. Market share as of December 31, 2005, Nintendo only has 14.7% (GameCube), compared to Sony’s 68.3% (PlayStation 2) and Microsoft’s 17% (Xbox). [1]
As mention in their 2005 Annual Report, Nintendo strategy is to expand the video game market by utilizing this wealth of talent and applying their game development
Bibliography: [1] E. Ofek, "Sony PlayStation 3: Game Over?," Harvard Business School, no. Teaching Case 9-508-076, 2008. [2] PC World, vol. 25, no. 1, pp. 26-28, 2007. [3] [Online]. Available: http://www.vgchartz.com/article/88789/2012-year-on-year-sales-and-market-share-update-to-january-28th/. [4] [Online]. Available: http://www.n-sider.com/contentview.php?contentid=319. [5] [Online]. Available: http://kyoto-report.blogspot.nl/2011/06/special-feature-inside-nintendo-vol-1.html. [6] [Online]. Available: http://en.wikipedia.org/wiki/Wii. [7] A. M. Subramanian, K.-H. Chai and S. Mu, "Capability reconfiguration of incumbent firms: Nintendo in the video game industry," Technovation, vol. 31, pp. 228-239, 2011. [8] S. Kim, I. Lamont, H. Ogasawara, M. Park and H. Takaoka, "Nintendo’s “Revolution”," MITSloan Management, vol. 11, no. 124, 2011. [9] [Online]. Available: http://www.screwattack.com/news/revolution-innovation-essay-about-nintendo. [10] [Online]. Available: http://seekingalpha.com/article/495791-nintendo-s-hidden-competitive-advantage.