The document provides an overview of Nintendo's history and current challenges. It discusses Nintendo's success with systems like the NES, Gameboy, and Wii but notes the Wii has been sold out for two Christmas seasons due to unpredicted demand outpacing production. It also examines Nintendo's competitors like Microsoft and Sony, strategies to expand their target demographic beyond young males, and need to diversify beyond solely focusing on gaming. The presentation identifies key challenges around logistics, competition, expanding markets, and online features to address through improved forecasting, operations management, and targeting untapped markets.

1. Presented by: Megan Beasley Matt McCulloch Kathryn Williams Hoyt Dwyer

2. Company Overview- Past 1889- Japan (Playing Cards) 1951- name change 1974- Exporting 1977- First home gaming system 1981- Donkey Kong

3. Company Overview what we remember 1985- NES 1989- Gameboy 1991- Super NES 1996- N-64 1998- Pokemon Mania 2002- Gamecube 2003- Nintendo DS 2006- Wii (most innovative gaming console today)

4. Things to know…. Main Branch- Kyoto, Japan America- Redmond, Washington Japan, US, Europe, and Australia Legal Environment-Anti-Trust Laws Competitors- Sony, Microsoft New entrants- weak Threats- PC gaming

5. Immediate Challenges Inbound and Outbound Logistics Competition Expanding their Market Increased On-line features Need to Diversify

6. Inbound and Outbound Logistics The Nintendo Wii is sold out The second Christmas in a row Unpredicted sales and demand have created problems with production Essentially, Nintendo has not made enough Wiis to meet the demand of customers Spokesperson for Nintendo defined one problem being a bottleneck in the production facility

7. Competition Nintendo Wii vs. Xbox 360 vs. Playstation Clearly defined competitors, both with better graphics/processors Those video cards came at a price Price Wii:$249 Xbox 360: $299 Arcade $349 Premium $459 Elite PS3: $399 40 GB $499 80 GB

8. Expanding The Market Rule of 80/20 A basic assumption of video game sales 80% Male 20% Female E3 2007 Nintendo Press Conference Rule of 67/33 Sales have shifted, with more female customers Wii and DS sales are growing in previously untapped markets This trend should continue to increase sales and broaden the consumer demographic

9. Increased On-Line Features Xbox 360: Xbox Live Software that allows Xbox 360 games to be played on-line with other people Playstation 3: Home Interactive 3D Environment Also allows games to be played on-line Wii: ? Surf the web, check the news, see the weather Only a handful of games can be played on-line Only wireless internet access of the three

10. Need to diversify Nintendo has focused on nothing but the gaming industry for almost 30 years Console Design Video Game Design A need to diversify is important for any business Helps reduce risks Increases revenues Baseball?? Nintendo owns the majority of The Seattle Mariners Definitely unrelated diversification Too unrelated Related Diversification Branching out into other cutting edge and innovative technologies outside of video game design Using Nintendo’s vast R&D abilities and applying it to related fields

11. To Recap… Inbound and Outbound Logistics Competition Expanding their Market Increased On-line features Need to Diversify

12. 2 Strategic Imperatives Inbound and Outbound Logistics Basically, the Wii has been old out since it’s launch last year Reduces revenues from sales Frustrates customers and drives to purchase other consoles and residual revenue from games and peripherals Affects the image and reputation of Nintendo Competition Coupled with the stock outs, Microsoft and Sony have begun systematically dropping their prices High competition among these businesses have made generating sales crucial to success Nintendo is at the forefront of sales, these trends must continue

13. Recommendations Inbound and Outbound Logistics Main source of problems: Poor forecasting of demand Problems with production Bottlenecks Improved Forecasting Initial projections of demand for products are crucial for determining levels of productions Creating a better system for forecasting will help Nintendo stay on top of production to decrease stock outs Operations Management (TOC, Six Sigma, Lean Production) Spokesperson for Nintendo commented on a bottleneck at the production facility Implementing Operation Management tactics to identify the bottleneck and to then work around this constraint will help with efficiency of current production Reduce inventory costs Focusing on this constraint and how to increase its’ production will help increase the overall level of production at the facility

14. Recommendations Competition Decrease Stock Outs Reduces consumers buying another console Increase On-Line Deliverables More games with on-line play Important factor to today’s gamers Increase Target Market Currently a strategy at Nintendo Creating a console intended for everyone Breaking into new markets has amazing potential for increased revenues