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Analysis of Nintendo
Game consoles throughout the years
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Nintendo Co., Ltd. Is a Japanese, multinational, consumer Electronics Company headquartered in Kyoto, Japan and founded by Fusajiro Yamauchi in September 23, 1889. Nintendo originally manufactured handmade hanafuda cards. After several tried and failed businesses, Nintendo settled with video games in 1963(Wikipedia, n.d). Today, Nintendo is the world leader in the growth, development and the continued improvement of the home leisure electronics and have sold more than a billion video games to the world (Nintendo, 2010). Nintendo designed a revolutionary game console in 2006 called “The Wii”. The Wii was envisioned to expand in to a different market segment of casual gamers and people of different age groups creating a new source of revenue for Nintendo. Nintendo has been known to be the breakthrough leader in the industry since 1980 when they first introduced “The Game & Watch” system. This paper will try to look into supply chain issues that plagued Nintendo Wii supply chain from 2006 until 2009, and briefly discussed the mistakes made during the launching of the Wii by Nintendo, and possible strategies that may help Nintendo stay and keep the top spot as a world leader in the video game industry by outselling competitors.
Video Game Industry
The game industry is a fast paced, ever changing industry competing for the same customers, developers, publisher and suppliers. Nintendo’s competitors in this vast $93 billion industry are Sony PlayStation, Microsoft Xbox, Apple and even Facebook now (Meulen & Rivera, 2013).
After five long years of low sales of the GameCube, Nintendo ended the year 2007 with some amazing numbers and the company was again at the top of the Christmas list in most worldwide households. The early 2006 r...
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...oboken, N.J.: Wiley.
McKinsey: A Marketer's Guide to Behavioral Economics (n.d.). Supply Chain Management-Main Componets [Graph]. Retrieved from http://khairul-anwar.com/2010/02/22/marketing-strategy-supply-chain-management/
Khwaja, A. (n.d.). Supply Chain Strategy [Image]. Retrieved from http://www.cgnglobal.com/supply-chain-management
Wikipedia (2014, April 10). Enterprise system - Wikipedia, the free encyclopedia. Retrieved April 13, 2014, fromhttp://en.wikipedia.org/wiki/Supply_chain_management
Benefits of Supply Chain Management. (n.d.). Retrieved March 4, 2014, from http://www.business-software.com/article/benefits-of-supply-chain-management/
• http://www.nintendo.com
• http://en.wikipedia.org/wiki/Nintendo#Electronic_era_.28since_1974.29
• http://mynintendonews.com/2006/04/19/nintendos-new-target-audience
The following paper analyzes the initial release of Microsoft's XBOX 360 gaming system release into the United States and the changes that occurred with the supply, demand and pricing of the product in the months following its release. The social science of economics tells us that supply, demand and price are closely related to one another and have a significant on how much of a particular good is purchased and the rate at which it is purchased by consumers. The XBOX 360 phenomenon is a solid example of the impact that changes in supply, demand and price have on the marketplace and the rate at which goods are purchased.
September 28, 1998. Kids are lined up outside of stores with their parents as they eagerly await the release of a game that is all the rave in Japan and is now being released into the United States. The children don’t’ know much about it besides the limited information they’ve seen in commercials. These kids and parents don’t know what they’re getting themselves into when they purchase Pokémon for the first time. Pokémon Red, Blue & Yellow versions combined sold 46.01 million units at $30 each when they were released in the late 90’s (Pokémon, 2012). This is a good representation of just how crazed the world was with Pokém...
In 1985, the Nintendo of America Company released a revolutionary video game system called the Nintendo Entertainment System or NES. The Nintendo Company who has already been in the video game industry such as laser gaming, electronic video
In the console-gaming world people know Sony and Nintendo. Microsoft may be the largest and richest software company in the world, but it’s unknown when it comes to console gaming. Microsoft is counting on the Xbox to change that perception. Gamers may not be willing to take a chance with the Microsoft Xbox, even if it is far superior to any console ever made. Nintendo Gamecube is nothing if charismatic. Nintendo’s new machine is half the size of any other console and looks like a toy with its brightly colored plastic shell and handle. It’s destined to be home of such popular games as Mario, Donkey Kong, Pikachu, and Kirby. Nintendo Gamecube seems mismatched as it goes up against the Microsoft Xbox and the Sony Playstation 2 (a multimedia mayhem that Sony says it’s supposed to be “The Future Of Entertainment”). All this makes you think; what makes Nintendo believe it can possibly go up against the ultra-sophisticated Xbox.
Key Changes in the Video Game Industry The first wave of home video games was launched nearly 30 years ago. By the early 1980s, this electronic entertainment medium had emerged as a cultural phenomenon, thanks to classics such as Asteroids, Centipede, Donkey Kong, and Pac-Man. The world of video games has, of course, changed drastically since then. For starters, Microsoft, Nintendo, and Sony are now the key players in the console industry, having replaced Atari, Coleco, and Mattel for those top spots. Advances in technology are making game worlds more realistic and interactive than ever before.
Lynch (2012) asserts that it is necessary for an organization to carry out an analysis of its resources and capabilities as it help it in identifying the places where value can be added by the organization. This also helps the company in finding out ways to gain competitive advantage in the market. The given case on Nintendo showed that by 2005, Nintendo appeared to be heading towards an end as its rivals Microsoft and Sony has captured the market through Xbox 360 and PlayStation 3 respectively. In this scenario, Nintendo innovated Wii which changed the market scenario in 2007. The case showed that innovative new strategy by Nintendo with its Wii games machine has transformed the industry and revived the profitability of the company. Since the release of the Wii, Nintendo is the leader in the video game industry. By introducing a totally new, one of a kind console, Nintendo has set clearly its goal and objectives, i.e. to reach an unexplored market share by introducing new gaming experiences, and therefore being the leader over its two main competitors, Sony and Microsoft. The case thus highlights the need to take a resource based view of the capabilities of the company so that such resources can be exploited to generate higher value for the firm.
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
Our goal for the Lige' is to establish a strong product in the over 6 billion dollar a year handheld gaming market. In order to be considered a success we hope to sell 1.5 million units in the first 16 months. However, as is traditional with gaming platforms the program will have to operate at a loss over this time before we can expect to see a profit. To minimize losses the Lige' will focus on function and content over technology and will initially only be sold over our website it is expected that 100 to 150 million dollars will need to be invested before the program starts turning over profits.
Nintendo is an entertainment company; not an electronics company. Console sales are inextricably intertwined with games sales. Hardware sales account for a large portion of Nintendo's total sales; however, hardware sales don't drive a large portion of Nintendo's total sales. At Nintendo, the games sell the consoles. Of course, the console itself can affect the game play experience in its role as a
To conclude, Nintendo’s core competencies are: create video games that cost the people less as it did with Wii, it depends more on innovations and creativity instead of advanced technology, and it targets new segments of people such as; the elderly and women. The company has to worry about two main things. The first one is that the firm should create some video games with technology and graphics to attract people who like technology. The second thing is that the company should open stores that only sell Nintendo's games to give more choices for people who like its games. These two ways could help Nintendo to increase its sales and its profits.
When Microsoft entered the video game console market, they were faced with a dilemma: whether to manufacture the Xbox themselves or outsource it to a third company. Microsoft ultimately chose to outsource the production to Flextronics. Flextronics’ 'industrial park' strategy is what allowed it to manage its supply chain, making the production of Xbox more efficient and cost effective. They also had factories around the world, which were all under the centralized information system, s they could shift the production from one country to another if necessary for optimal profitability.
Nintendo, which is one of the video game industry competitors, have been the worldwide leader in creating the entertainment games. Nintendo’s video games have been sold everywhere in the world and they became in the list of the worlds best selling. The latest gaming console system, which is considered as a revolutionary video game console, was the Wii. It attracted a large number of people from different ages, which resulted in a large number of sales and profit. Unfortunately, nowadays the demand of the video games slightly decreased because of the new games and devices introduced recently. This internal analysis of Nintendo conducts its competitive strength assessment versus its competitors and analyzes the firm using the value chain analysis tool and the VRIO framework.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
“I don’t think people realize how revolutionary this console is as the fact that I can bring a console anywhere I want and play any type of game I want. This technology is cool and advanced it really shows how Nintendo is making a comeback,”says Janaan Hamilton. The Nintendo Switch sales is proof enough that this company is making money as retailers such as gamestop sold out of Nintendo Switches on it’s initial release date. Even other retailers such as walmart and target had to refund customers pre-orders due to the overwhelming rate of
The Supply chain management system manages raw material, manage suppliers, schedule human resources while Customer relationship management system is in support to identify customer needs and wants, customer facing system etc. Enterprise Resource system is part of AIS integrating human resources and support services in a company. (Chen, I. J. 2001)