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Copy of Case Study: The Video Game Industry

A look into the 'business history' of the video game industry, as well as few strategic recommendations for the future.

Renzo Guido

on 22 July 2014

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Transcript of Copy of Case Study: The Video Game Industry

Hiroshi Yamauchi (1949-2002)
Key to the market was "great games"
Shigeru Miyamoto (1980-Present)
Nintendo's staff artist
Created Donkey Kong in '83
Head of R&D in '84
Super Mario Bros., Legend of Zelda, etc.
Satoru Iwata (2002-Present)
Reach broader market
Game-cube, Wii, Wii-U

A Visual History
Presentation Overview

Lower price
Innovative design
Appeal to a broader market
Portfolio of recognizable characters and popular games
Games are less expensive to develop



Gain excitement before the Wii-U
release in the fall of 2012
Online Gaming
Improve Controller Quality

Sony (PlayStation Move)
Microsoft (XBox Kinect)
Apple (Touch-screens and Apple TV)
Case Study:
Presentation By: Liz Martin, Jared Keibler & Jordan Beauchamp

Threat of Substitutes --> Moderate
Wii (and DS) definitely set Nintendo apart but Microsoft, Xbox and Apple (IPad) are still present
Bargaining Power of Buyers --> Low
Lots of popular and practical games available for Wii - consoles will sell
Bargaining Power of Suppliers --> Moderate
Game producers can choose who they work with
Suppliers sell Wii - product vital to company and few subsitutes
Supplies Nintendo needed for products were much simpler compared to 128-bit machines

Porter's 5 Forces

Risk of Entry by Potential Competitors --> High
Nintendo has strong reputation in gaming market
Online gaming popular
Switching costs high - buying a new console system
Intensity of Rivalry among established firms --> Low to Moderate
Nintendo is focusing on youth markets (7-12 yrs) and new demographic of people with no interest in video games (using Wii)
Porter's 5 Forces, Cont.

Broad Differentiation
Keep costs lower than competitors by using materials "off of the shelf"
Redefining the scope of home video gaming
Broader market
More family friendly games
Game Franchises
Business Level

Visionary & long-term decisions to maximize profitability & profit growth
2 Acquisitions:
- Most recent being Mobiclip in 2011
Stake in 5 companies
Franchising the creation of games to increase sales, satisfy demand (and lower cost structure)
Corporate Level
Leadership History

Superior Innovation with Wii - Motion sensitive, wireless controller that detects body movements
Known to be reliable company in industry - releasing quality products
Environmentally Aware - Take Back Program where they recycle 100% of products
Focus on Customer - Provide assistance for any Nintendo product no matter how old

Functional Level


Historical Share Price Graph

(10-Year Look)
Income Statement



History of Nintendo
SWOT Analysis
Porter's 5 Forces
Competitive Advantages
Corporate, Business,
and Functional-Level Strategies
Life Cycle Analysis
Financial Information
Video-Game Industry:
- Mature
Nintendo Products:
- Wii: Decline
- 3DS: Growth
*We will be taking all questions at the end of the presentation.

Competitive Advantages
Consistent Profit-Makers
Abilities of Management:
- Smart investment of capital
- Making defeat temporary
Strong brand recognition &
loyal customer base

In regards to the Wii-U:
- Perfect the user interface
- Fix any bugs / issues
- Raise public awareness before release
Improve online gaming platform
Improve durability of controller
Increase R&D Expenditures
Continue to improve graphics while keeping
the essence of Nintendo the same

A look at the Wii-U
Full transcript