NINTENDO<br />Competitive Analysis and Strategic Recommendations<br />Prepared by<br />Sudhish Subhash | Theron Korda | Mr...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />Corporate Vision<br />Expand Gami...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />Sustaining Innovation<br />Better...
Portable Gaming Platform – Nintendo DS
Simplified touch screen controls</li></ul>Performance<br />3D TV hooked to current consoles<br />Target overshot customers...
Controller free
Screen free - 3D</li></ul>Time<br />3D presentation techniques non bound by CONTENT – games, music, shows<br />Compete aga...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />Technological Segment<br /><ul><l...
Future Developments: Holography, brain wave technologies</li></ul>Sociocultural Segment<br /><ul><li>Family entertainment ...
63% of parents feel that video games were a positive addition (2008)</li></ul>Current State - Industry<br />
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />Opportunity Insights<br />Competi...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />Nintendo’s current Value Proposit...
Focused on what matters in having fun rather than what is looking or having cutting edge
Changed the way how game was played: from pushing buttons to moving body
Used game for something more than game such as fitness and family entertainment to make this other activity fun</li></ul>V...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />STRENGTHS<br /><ul><li> Currently...
 Owns popular properties such as Super Mario Bros. and Donkey</li></ul>kong<br /><ul><li> History of innovative gaming tec...
 Built a lot of brand equity over the past 30 years (sold 49 million Super Nintendo Entertainment System consoles in the 90s)
 Captures a broader demographic than other console makers
 Solely focused on gaming, unlike competitors Microsoft and Sony</li></ul>Current State - Nintendo<br />
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />WEAKNESSES<br /><ul><li> Doesn’t ...
 Not known for sophisticated graphics
 Popularity of the Wii seems to have peaked
 The hierarchical nature of the company may cause it to not respond quickly enough  </li></ul>    to the threat of an insu...
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />CAPABILITIES (Based on Strengths ...
 Leverage first mover advantage, bargaining power and easy customer recall
 Utilize global presence and geographical diversification to reduce business risk
 Reduce dependency on suppliers
 Balance hardware and software focus
 Diversify range and appeal to serious gamers
 R&D to include sophisticated graphics without significant costs
 Adopt a flat structure to ensure faster response to threat of insurgents</li></ul>Current State - Nintendo<br />
Vision   Current state   BoD   Employees   Investors   Recommendations   Conclusion<br />OPPORTUNITIES<br /><ul><li> Micro...
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Nintendo V3

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Nintendo V3

  1. 1. NINTENDO<br />Competitive Analysis and Strategic Recommendations<br />Prepared by<br />Sudhish Subhash | Theron Korda | Mridul Katial | Sumit Deo<br />M-290A EDGE : FTMBA10 - PaulMerage School of Business<br />
  2. 2. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Corporate Vision<br />Expand Gaming Audience<br />Devotion to entertainment business<br />Devotion towards employees<br />Vision<br />
  3. 3. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Sustaining Innovation<br />Better Console gaming<br /><ul><li>New Experiences Not new consoles
  4. 4. Portable Gaming Platform – Nintendo DS
  5. 5. Simplified touch screen controls</li></ul>Performance<br />3D TV hooked to current consoles<br />Target overshot customers<br />Different Performance Measure<br />New end disruption Innovation<br /><ul><li>Emotion sensing
  6. 6. Controller free
  7. 7. Screen free - 3D</li></ul>Time<br />3D presentation techniques non bound by CONTENT – games, music, shows<br />Compete against non-consumption<br /> Next?? <br />Consumerism and Socializing<br />Time<br />Non-consumers or non-consumer context<br />Vision<br />Company improvement trajectory<br />
  8. 8. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Technological Segment<br /><ul><li>Past: Internet
  9. 9. Future Developments: Holography, brain wave technologies</li></ul>Sociocultural Segment<br /><ul><li>Family entertainment is the fastest growing segment
  10. 10. 63% of parents feel that video games were a positive addition (2008)</li></ul>Current State - Industry<br />
  11. 11. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Opportunity Insights<br />Competitors & Substitutes<br />Mega Global Forces<br />Consoles: PS3,Xbox360<br />PC Games<br />Handheld: iphone, PSP, Gameboy, DS lite<br />Social Gaming: MMORPG, Xbox live, PS network<br />Home Entertainment: Movies, Songs, Netflix, Redbox<br />Upcoming: Microsoft’s Project Natal, Health vault<br />Interactive education: languages, architecture, environmental issues, exploration<br />Health<br />Virtual Shopping<br />Social/interactive gaming<br />Online dating<br />Gesture based interaction<br />Home entertainment<br />E-readers, file management<br />Current State - Industry<br />
  12. 12. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Nintendo’s current Value Proposition: Wii<br /><ul><li>Delivered technology to consumers in a way it doesn’t scare them: simple and cheap
  13. 13. Focused on what matters in having fun rather than what is looking or having cutting edge
  14. 14. Changed the way how game was played: from pushing buttons to moving body
  15. 15. Used game for something more than game such as fitness and family entertainment to make this other activity fun</li></ul>Value Proposition<br />
  16. 16. Vision Current state BoD Employees Investors Recommendations Conclusion<br />STRENGTHS<br /><ul><li> Currently has the lion’s share of the market in consoles
  17. 17. Owns popular properties such as Super Mario Bros. and Donkey</li></ul>kong<br /><ul><li> History of innovative gaming technology
  18. 18. Built a lot of brand equity over the past 30 years (sold 49 million Super Nintendo Entertainment System consoles in the 90s)
  19. 19. Captures a broader demographic than other console makers
  20. 20. Solely focused on gaming, unlike competitors Microsoft and Sony</li></ul>Current State - Nintendo<br />
  21. 21. Vision Current state BoD Employees Investors Recommendations Conclusion<br />WEAKNESSES<br /><ul><li> Doesn’t appeal to serious gamers
  22. 22. Not known for sophisticated graphics
  23. 23. Popularity of the Wii seems to have peaked
  24. 24. The hierarchical nature of the company may cause it to not respond quickly enough </li></ul> to the threat of an insurgent<br />Current State - Nintendo<br />
  25. 25. Vision Current state BoD Employees Investors Recommendations Conclusion<br />CAPABILITIES (Based on Strengths & Weaknesses)<br /><ul><li>Wii + Internet = More
  26. 26. Leverage first mover advantage, bargaining power and easy customer recall
  27. 27. Utilize global presence and geographical diversification to reduce business risk
  28. 28. Reduce dependency on suppliers
  29. 29. Balance hardware and software focus
  30. 30. Diversify range and appeal to serious gamers
  31. 31. R&D to include sophisticated graphics without significant costs
  32. 32. Adopt a flat structure to ensure faster response to threat of insurgents</li></ul>Current State - Nintendo<br />
  33. 33. Vision Current state BoD Employees Investors Recommendations Conclusion<br />OPPORTUNITIES<br /><ul><li> Microsoft’s Xbox Project Natal will prime the market for the next generation in </li></ul> console technology<br /><ul><li> A large number of current Wii owners  backwards compatibility of the new game </li></ul> will promote adoption by these users<br /><ul><li> The right infrastructure is in place: home networking and entertainment delivery </li></ul> technologies is becoming more sophisticated <br />Current State - Nintendo<br />
  34. 34. Vision Current state BoD Employees Investors Recommendations Conclusion<br />THREATS<br /><ul><li> Microsoft’s Xbox Project Natal is going to cut into Wii’s market share
  35. 35. Online gaming continues to expand at a breakneck pace
  36. 36. Social networking games in particular are encroaching on the ‘broad appeal’ </li></ul> demographic targeted for the Wii<br /><ul><li> Popular devices like the iPad are migrating gaming away from consoles and </li></ul> computers<br /><ul><li> The console market is approaching saturation – 60 million units of the current </li></ul> generation sold (Xbox 360, PS3, Wii)<br />Current State - Nintendo<br />
  37. 37. Vision Current state BoD Employees Investors Recommendations Conclusion<br />ACTIONS (Based on Opportunities & Threats)<br /><ul><li> Cater to a wider demographic
  38. 38. Focus on Online gaming segment
  39. 39. Incorporate Social Networking games
  40. 40. Target ‘mobile’ gaming segment
  41. 41. Leverage the power of home networking and entertainment delivery technologies
  42. 42. Integrate Wii with basic activities (Extend offerings like Wii Fit)
  43. 43. Online promotion of specific games
  44. 44. Manage shorter product lifecycle efficiently
  45. 45. Adapt to changes in consumer preference</li></ul>Current State - Nintendo<br />
  46. 46. Drivers<br />User interfaces in gaming environments<br />Body gesture, Voice detection, Emotion detection<br />Current Strategy<br />Repertoire of Games<br />Subscription fees paid (Online Service Xbox Live)<br />Future Strategy<br /><ul><li>What will the company’s future strategy be?
  47. 47. Product : Project Natal
  48. 48. Place : Target Advertisers
  49. 49. Price : Competitive ($150)
  50. 50. Position : Casual Gamers</li></ul>Assumptions<br />Realism – More effective representations and interactions in 3D <br />Hardware-less controls<br />Capabilities<br />Strengths: Brand awareness, Loyalty, Presence<br />Weaknesses: Manufacturing costs<br />Competency: Operating Systems/ Computing<br />Vision Current state BoD Employees Investors Recommendations Conclusion<br />4 Corner’s Analysis for Insurgent (Microsoft)<br />Current State - Competitor<br />
  51. 51. Vision Current state BoD Employees Investors Recommendations Conclusion<br /> COMPETITIVE RESPONSE<br /><ul><li> Counter threat of MS Project Natal and Sony PlayStation Move by introducing the next generation of gaming utilizing emotion sensors
  52. 52. Ensure that Nintendo 3DS (pipeline) is positioned correctly
  53. 53. Partner with 3D holographic companies (Musion)
  54. 54. Partner with Cisco (Telepresence)
  55. 55. Acquire smaller players with a potential to disrupt</li></ul>1UP<br />Current State – Nintendo Vs Competitor<br />
  56. 56. Partner with other companies<br />Execute<br />Execute<br />Build in-house<br />Vision Current state BoD Employees Investors Recommendations Conclusion<br />?<br />SHORT-TERM STRATEGY A<br />Y<br />N<br />Y<br />N<br />Strategy<br />
  57. 57. Vision Current state BoD Employees Investors Recommendations Conclusion<br />SHORT-TERM STRATEGY B<br />Multi controller<br />?<br />TouchscreenWii - One Controller, Multiple Uses<br />Strategy<br />
  58. 58. Vision Current state BoD Employees Investors Recommendations Conclusion<br />SHORT-TERM STRATEGY C<br />YOO can control your emotions<br />EMOTION SENSING<br />Strategy<br />
  59. 59. Vision Current state BoD Employees Investors Recommendations Conclusion<br />SHORT-TERM STRATEGY D<br />Cater to a broader demographic<br />From ages 5-95 yrs<br />Strategy<br />
  60. 60. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Milestones<br />Strategy<br />
  61. 61. Vision Current state BoD Employees Investors Recommendations Conclusion<br />LONG-TERM STRATEGY<br />Strategy<br />
  62. 62. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Product Leadership<br />Why NINTENDO?<br /><ul><li>Proven Product Leadership: Nintendo introduced a gaming revolution in the Wii console.
  63. 63. Gaming Focus: Nintendo is dedicated to games, while competitors worry about broad high tech and electronic sectors.
  64. 64. Strength of Brand: Customers know that they can expect quality and creativity from Nintendo.
  65. 65. Scale: Nintendo has the capability to launch the next gaming revolution on a global scale.
  66. 66. Sustain: Nintendo must continue to build on its success to maintain market share </li></ul>Employees<br />
  67. 67. Vision Current state BoDEmployees Investors Recommendations Conclusion<br />Employee Empowerment<br />Who will lead NINTENDO into the next gaming era?<br /><ul><li>Innovation Leadership: Creative teams of engineers, marketers, & designers will be empowered to make decisions that drive product development forward.
  68. 68. Knowledge Base: Key individuals that brought us Wii and Nintendo DS are assigned to the project.
  69. 69. Research & Development: Multiple R&D professionals will be summoned to experiment and collaborate on the project, and continue the rich development tradition of Nintendo.
  70. 70. Resources: The executive team is committed to providing the necessary capital, both human and monetary, to make the next gaming venture as successful as the last.</li></ul>Employees<br />
  71. 71. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Strategic Alliance<br />Who are the key players aligning with NINTENDO?<br /><ul><li>Partnership: Cisco has the cutting-edge communications technology to enable Nintendo’s gaming vision.
  72. 72. Infrastructure: Communications providers are crucial participants as Nintendo needs to secure network capacity.
  73. 73. Content Developers: Nintendo needs allies in independent content providers that share the vision of the possibilities of the new gaming platform.
  74. 74. Manufacturers: Outsource production to best-in-class gaming hardware manufacturers.
  75. 75. Financial Support: Communicating value to ensure continued financial backing from investors and lending institutions is key.</li></ul>Employees<br />
  76. 76. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Our Goal – You are the game<br />
  77. 77. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Its perfect time to launch the next big innovation<br />NINTENDO YOO!!<br />Financial Health Analysis<br />
  78. 78. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Nintendo transformed the game console market in 2007 with launch of Wii. Sales jumped 104% over an year. We have reclaimed our throne as #1 Console producer.<br />Revenue Analysis - Retrospect<br />
  79. 79. Vision Current state BoD Employees Investors Recommendations Conclusion<br />35%<br />40%<br />Over 75% of our installed base for new products are in the US and Japan, with our diversification strategy we shall target emerging markets and markets withhigher disposable income for the simultaneous launch of Nintendo YOO<br />Revenue Channel Analysis - Retrospect<br />
  80. 80. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Even with conservative estimates (50% of Wii figures) accounting <br />for saturation and increased competition we see a CAGR of 40%<br />Revenue Forecast – Nintendo YOO <br />
  81. 81. Vision Current state BoD Employees Investors Recommendations Conclusion<br /> is the Industry Leader in Console Manufacturing - Operating Margin of 23.4%<br />Our Competitors lose about $150 to $300 per unit sold. They extend their revenue cycle over the sale of software, licensing and royalty<br />Competitive Environment<br />http://www.joystiq.com/2005/12/28/xbox-360-costs-715-to-make/http://en.wikipedia.org/wiki/PlayStation_3<br />
  82. 82. Vision Current state BoD Employees Investors Recommendations Conclusion<br /> is the Industry Leader in Console Manufacturing - Operating Margin of 23.4%<br />Our Competitors lose about $150 to $300 per unit sold. They extend their revenue cycle over the sale of software, licensing and royalty<br />Competitive Environment<br />http://www.joystiq.com/2005/12/28/xbox-360-costs-715-to-make/http://en.wikipedia.org/wiki/PlayStation_3<br />
  83. 83. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Nintendo enjoys the lion’s share of the console market<br />Strategic Advantage: Highest Installed Base will provide a huge advantage to convert Wii ‘Fan Base’ into YOO customers.<br />Nintendo DS and Gameboy Advance – 42% of revenues<br />Strategic Threat: Decline in sales of the Handheld account for 45% loss in revenues<br />Threat: iPhone, iPad<br />Competitive environment<br />http://www.edge-online.com/news/ps3-takes-31-per-cent-market-share-in-q1-report<br />
  84. 84. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Phased Implementation<br /><ul><li>Go/No-Go Decision Process
  85. 85. Cross Functional Steering Committee
  86. 86. Timeline of >18 and <30 Months</li></ul>KEY FEATURES<br />1. Centralized team in each geography (to understand growing demographic trends)<br />2. Steering committee will assure delivery/termination (no premature swap ins/out)<br />3. Lucrative product lines will be adopted globally (Technology has no barriers)<br />Innovation Model<br />http://www.innovationtools.com/PDF/Integrated_Innovation_PLI.pdf<br />
  87. 87. Vision Current state BoD Employees Investors Recommendations Conclusion<br />Survival of the Adaptive!!<br /><ul><li> Adaptability
  88. 88. Dynamic Marketplace
  89. 89. Technological Innovations
  90. 90. Cloud computing
  91. 91. Transition towards the new normal</li></ul>Conclusion<br />

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