The document outlines Nintendo's strategy to address its first ever net loss. It analyzes Nintendo's business environment and current strategy. Nintendo plans to liberalize game development, cut losses on older consoles, and remain relevant. For long term strategy, it will adapt to mobile markets, invest in disruptive technologies like VR, and form strategic partnerships. The new strategy aims to ensure profitability and provide an enjoyable gaming experience across multiple platforms.

1. WII ENCORE?
An is3101 presentation by “prodigies” team 7
Kang Jie Min ▪ Mah Yu Ting, Jeannel ▪ Lim Kuo Tao, Thomas ▪ Chew Teck Meng, Ivan ▪ Low Jun

2. BACKGROUND
First Ever Net Loss of ¥43.20 billion for Financial Year 2011
Threats to Business Issues at Hand
 Social Networking Websites  Revamp Business/IS Strategy
 Casual Gaming on Mobile  Implement Supporting IT
Devices Infrastructure
 Quick Adaptation by Rivals
Microsoft and Sony

3. AGENDA
1. Business Environment 2. Evaluation of Current
 External Analysis Strategy
 Internal Analysis  SWOT Analysis
 Short-Term Strategy
 Long-Term Strategy

4. BIZ ENV – EXTERNAL ANALYSIS
Surrounding Developments
 Technology (Fuels Expectations of Games)
 Timing (No First-mover Advantage)
 Pricing (People Less Price-Sensitive)
 Control over Game Titles (Ensures Brand Quality)
 Nature of Console Gaming (More Mainstream Now)
 Software Piracy (BitTorrent, etc)

5. BIZ ENV – EXTERNAL ANALYSIS
Competitive Forces on Industry
 Rivalry Among Existing Firms (Microsoft, Sony)
 Substitutes (Games on iOS, Android)
 Consumers’ Bargaining Power (High; Many Other Consoles/Games)
 New Entrants (High Barrier of Entry)
 Suppliers’ Bargaining Power (Medium; Many Suppliers Available)

6. BIZ ENV – INTERNAL ANALYSIS
Nintendo’s Current Strategy
IS Goals Business Goals
 Develop Disruptive Technologies  Ensure Net Profit
 Keep up with the Internet  Ensure Price Affordability
 Capture the social aspect of gaming (Miiverse)  Reach More Gamers and Thereby Broaden the Market
 Improve Customer Experience for Gamers  Provide Enjoyable Gaming Experience
 Produce High-Quality Controlled Content

7. SWOT ANALYSIS - EXTERNAL
Opportunities Threats
Tech
Strategic Rivals Adapt Mobile Device
Trends, Innovatio
Alliances Quickly Entertainment
ns

8. SWOT ANALYSIS - INTERNAL
Strengths Weaknesses
Strict Control of Slow Hardware
Strong R&D Production
Game Titles
Novel Comparatively Poor Revenue,
Classic Games Cash Flows
Technology Weak Launches

9. SWOT ANALYSIS
+ Growth -
Next-Gen
+ Wii U
Market
-
R&D 3DS
Illustrations:
http://www.clker.com/clipart-6937.html
http://www.dreamstime.com/stock-photos-cartoon-cash-cow-metaphor-image5476573
http://www.dreamstime.com/stock-photos-pile-empty-cardboard-boxes-image19872403

10. SWOT ANALYSIS
SW Strong Classic Stringent Slow Initial Lack of Loss-
O R&D Games Control of Supply of Cash-Cow Making
T Software Hardware Products
Tech Trends, Wii Mobile App
Innovations VR Technology
Strategic
Alliances
Quick
Adaptation Liberalize
Cut Losses
Dev. Of
Mobile Device Remain Relevant
Games
Entertainment

11. STRATEGY – OVERVIEW
Nintendo’s Strategy
Short Term Long Term
Adapt to
Liberalize the Remain Invest in
mobile Form strategic
development of Cut losses relevant to disruptive
consumer partnerships
games industry technologies
market

12. STRATEGY – SHORTTERM
Liberalize development of games
Why?
GamesCurrent SDK costconsumer’s choice of games
as core factor of ~USD$2,000.
Game Developers are essential to create great console
Still a deterrent to game developers.

13. STRATEGY – SHORTTERM
Liberalize development of games
Subscription
Release Wii U
+
SDK for free online
Royalty from game publishers
How? through the Developer’s
Centre
Payment through Integrated
Payment System in eShop

14. STRATEGY – SHORTTERM
Cut losses
Why?
Substitutes Competitors

15. STRATEGY – SHORTTERM
Cut losses
Cut back on
marketing, R&D Redistribute
and production staff to R&D, Wii
How? of Nintendo DS U and Integrated
/ 3DS Payment System

16. STRATEGY – SHORTTERM
Remain relevant to industry
Why? Survival

17. STRATEGY – SHORTTERM
Remain relevant to industry
• Monitor offerings from competitors & implement as
necessary
How?
• Manage customers’ expectations

18. STRATEGY – SHORTTERM
IT Infrastructure
Existing IT eShop Human Resource Legacy SDK
Infrastructure Management System
(HRMS)
Proposed IT Integrated Knowledge Management Data Developer’s
Infrastructure Payment System based on a private Migration to Centre on
System for cloud which supplements Developer’s the cloud to
developers HRMS to manage the Centre cater to
& gamers technical expertise of the developers.
company

19. STRATEGY – SHORTTERM
Benefits Challenges
• Improved capability to meet • Cost
business goals
• Pave the way for new products
• Increase shared knowledge

20. STRATEGY – LONGTERM
Adapt to mobile consumer market
Mobile consumer market Console market
Why?
Capture more
Possible substitute
for casual share
market gaming
How?
Benefits
Google Glass
Challenges •Increase R&D cost
•Relevance of Developer Centre

21. STRATEGY – LONGTERM
Invest in Disruptive Technologies
Motion and gesture 3D Virtual reality
Why?
Disruptive
Benefits
Other markets
How?
•Systems migration
•KMS Gaming Experience
Challenges •Larger IT department •KMS
•Developer Centre
•Developer Centre Military Simulation
•Security and reliability
Visual Technology

22. STRATEGY – LONGTERM
Form Strategic Partnerships
Why?
3rd party game titles
Benefits •KMS
•Developer Centre
3D Virtual reality visor
How? •Increased market share
•Protect intellectual property •Network effect
Challenges Nintendo Platform •Leverage on expertise
•Incompatibility with systems

23. CONCLUSION
Nintendo’s New Goals
IS Goals Business Goals
 Develop Disruptive Technologies  Ensure Net Profit
 Improve Connectivity and Social Networking  Ensure Price Affordability
 Improve Customer Experience for Gamers,  Reach More Gamers and Thereby Broaden the Market
Independent Developers  Provide Enjoyable Gaming Experience
 Maintain Internal Collaboration  Produce High-Quality Controlled Content
 Increase Shared Knowledge

24. CONCLUSION
Nintendo’s New Business Decisions
IS Decisions Business Decisions
 Website to support publishing/payment  Cut back on 3DS, DS – Mobile consoles
 SDK on Developer’s Centre  React to environment for survival, but limit spending
 Infrastructure upgrade for next-gen  Loosen control over software
 Develop VR technology
 Create mobile app  Eventually venture out of industry