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NINTENDO

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by

Alberto Viganò

on 5 December 2013

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Transcript of NINTENDO

GAME INDUSTRY'S
DYNAMICS

COMPETITION
WITHIN THE INDUSTRY
Few, big and strong competitors
Competition reduces margins
STRONG
BARGAIN POWER
OF SUPPLIERS
MEDIUM
Hardware: few and specialized suppliers
Software: many developers and independent producers
THREATS OF
NEW ENTRANCE
WEAK
High investments
economies of scope
economies of scale
Network externality
Brand Equity
WEAK
BARGAIN POWER
OF COSTUMERS
Low power of distributors (few firms to deal with)
Low power of consumers (but new media and technology are slightly increasing it)
STRONG
THREATS OF
SUBSTITUTES
Perfect substitutes:
PC Games
Smartphone Games
Imperfect substitutes:
Free Time Activity
STRENGTHS
Easy to play, high addictive
Super Mario & Zelda
Easy controllers
Real life situations
Family games
Leader in handheld device
Wii ware
Word of mouth
Screen action
Lower hardware costs
Geographically close to Japanese game producers
No third part to develop games
Brand reputation
Loyal costumers
WEAKNESSES
Less power and less graphical interface
Not a completely entertainment console
Low recognition and brand awareness in late teens and young adult looking for more sophisticated and violent games
Easy games, not appealing for advanced users
Not developed online platform
OPPORTUNITIES
Console are not just for games
Broader availability of internet
Increasing HD video technology
Decreasing costs of Hard-drive
Social-Networking
Virtual-world services
Increase in usage of smartphone
Integration of YouTube, Facebook...
THREATS
Strong competition
Japanese market was shrinking
High cost for developing advance-complex games
Increasing complexity in video-games
Economic crisis - cut expenditures in needless product
Exchange loss for Japanese companies
Opportunities-Strengths
DEVELOP NEW DEVICES TO INTERACT WITH GAMES
CREATE A HOME ENTERTAINMENT CONSOLE
CREATE NINTENDO'S GAMES
FOR SMARTPHONE
Opportunities - Weaknesses
THE HARDWARE/SOFTWARE COULD NOT RUN ALL THE FEATURES THE COSTUMERS ARE LOOKING FOR
EXTEND ON-LINE
GAMES/COMMUNITY
Strengths - Threats
TAKE ADVANTAGE FROM
LOYAL COSTUMERS
KEEP MARKET SHARE USING
UNIQUE-PRODUCTS
CHEAPER THAN RIVALS
GOOD FOR THE ECONOMIC SITUATION
Threats - Weaknesses
COMPETITOR WILL
OVERTAKE NINTENDO
+ performance
+ games
MARKET DEVELOPMENT
PORTABLE CONSOLE
HOME CONSOLE
Launched in march, 25th 2011

3D screen

Wi-fi connection

Online gaming

Backward compatible with the old games

Unique games (SuperMario, Zelda)

220 fr
Launched in February, 22th 2012

Wi-fi connection

Possibility for 3G connection

Online gaming

Backward compatible with the old games

240 fr
Xbox kinect:

Launched in november, 4th 2010

There is no need for a controller to play games

Available for PC from 2012

Xbox:

Online gaming for a monthly fee

300 fr
PS move:

Launched in november, 4th 2010

1/2 controllers to make movements, like the wiimote controller

2004 project

PS3:

Free online gaming

330 fr
Blue Ocean Strategy
Nintendo 3DS
PS Vita
Market shares
CONCLUSIONS
Microsoft
7th generation
Sony
competitors
Wii
Free online

120 fr
HOME CONSOLE
8TH GENERATION
WiiU
More powerful
HD games
New WiiU controller pad with touch screen
New controller, classical experience of gaming
Backward compatible
Nintendo network free to use
380 fr
High barriers to entry
high
Low
is not an attractive industry for new entrants

develop games for smartphone

defend their position
develop a full entertainment console

face the competitors
follow the development of technology
teen
kids
'70s
Market share
1st Nintendo
2nd Sega
3rd Atari
'95
Market share
1st sony
2nd nintendo
3rd others
teen
kids
young adults
teen
kids
young adults
hardcore gamers
2002
market share
1st Sony
2nd Microsoft
3rd Nintendo
Non gamers

2006
Nintendo Wii
Mission
vision
Target a new market: NON GAMERS.
"Our goal is to come up with a machine that MOMS would want. Something—EASY TO USE, quick to start up".
Offer a NEW and INNOVATIVE gaming experience.
strategy
without cannibalize existing games' sales
A disruptive strategy
2012 2013
Thank you

Q&A

TARGETED MARKET: GAMERS
Marekt was saturated...
Market WILL NOT grow anymore
Nintendo's market share fell
How to come back to the top?
Create a console which EVERYONE can use and wuold use (easy to use console and games)
Targeted market
How to be competitve within a fast changing industry?
beginning of game industry
Sony joined the market with PS
Microsoft joined the market
"To remain at the top of their industries, managers must first be able to spot disruptive technologies"
DEVELOP HD GAMES
Full transcript