:The Release Brand Analysis of Nintendo Before

2006 Market Introduction of Wii During R&D stage (2003-2005)

As Presented By:
Nicole Arena Jann Rey Pontillas Kelsey Wells

Brief Company History
• Japanese-based company founded by Fusajiro Yamauchi in 1889. • Globally operates in Japan, America, and Europewith a large portion of operations in Japan. • Develops and manufactures interactive entertainment products: Home video game entertainment products in addition to playing cards.

Evolution of Product Line
1985 1989 1991

Nintendo Entertainment System Game Boy Super Nintendo ES

1st ever home console gaming system, Mario, Zelda Portable Gaming More processing power = more entertaining games

1996 1998 2001

Nintendo 64
Game Boy Pocket Game Boy Color Game Boy Advance

3D gaming First 64 –bit system
Smaller portable gaming

Larger screen Better graphics

2003 2004 2006 2006

Nintendo GameCube
Game Boy Advance SP Nintendo DS Nintendo DS Lite Revolution (Wii) *

Optical disc games (vs. cartridges)
Smallest design 2 screens, touch-screen, wi-fi Smaller-lighter Wireless , Interactive play

. and eventually PlayStation 2 and PlayStation 3.COMPANY OVERVIEW Events Leading Up to 2006 Wii Console Release • Nintendo was losing market share to competing video game entertainment systems • Nintendo was market leader up until 1994 when Sony issued its PlayStation.  2005: Sony #1. Nintendo #3 • The environment for video game entertainment systems had become increasingly competitive • Focus on graphics and resolution • Decreasing PLC • High Switching Cost • Nintendo was the leader in hand-held portable gaming • Sony's launch of the PSP in 2005 was anticipated to pose a threat to the Nintendo DS. Microsoft came out with Xbox 360 in 2001. Microsoft #2. In addition.

COMPANY OVERVIEW Events Leading Up to 2006 Wii Console Release • Sales for GameCube were low and declining • by far the lowest of any previous system • Overall company net profits had dropped 21% .

How should the company set about building mass-market appeal while retaining its point of difference to compete with Sony and Microsoft in the game console market? Fork -In-The-Road STRATEGIC ISSUE .

. games made for those consoles and games produced specifically for PCs make up the retail segment. The development and manufacture of games. consoles and accessories also constitute a notable share of the market.INDUSTRY & ENVIRONMENT OVERVIEW Industry Definition Video Gaming: Gaming consoles.

making consoles a lossmaking enterprise Games and Accessories – Generate High Profit Margin: Pivotal source of profitability for a company – Marquee Games .INDUSTRY & ENVIRONMENT OVERVIEW Industry Sources of Revenue Game Consoles – Loss-leader: Consoles are merely vehicles by which games and accessories can be sold.

casual gamers Global Market (as of 2003): . video game-playing consumers come from demographics with an abundance of leisure time: students and children and predominantly male—overall target audience are less than 35 years old Untapped Market: Women. aging gamers.INDUSTRY & ENVIRONMENT OVERVIEW Industry Traditional Target Market Target: Traditionally.

INDUSTRY & ENVIRONMENT OVERVIEW External Drivers for Growth – Improvements in home entertainment equipment • requires the gaming experience to become more immersive . – Aggregate Disposable Income • consumers' disposable income has a modest effect on video game sales figures .more cinema like .the demand for games is enhanced. – Leisure Time availability • traditional target audiences have abundance of leisure time: students and children and predominantly male – Industry Systems and Technology • industry heavily relies on changes in technology – Video Game Console Sales and Games Sales • some consumers decide on the game and purchase the console associated by the game – Pervasive Technology • Industry growth is deeply reliant on the release of new generations of video game consoles.


Ltd.. – Consoles that can support superior games with outstanding graphics capabilities traditionally win consumers – Expensive R&D. short PLC .INDUSTRY & ENVIRONMENT OVERVIEW Industry Competition High and steady competition • Concentrated by three major players: Nintendo Co. Sony. and Microsoft • Dominant Player: Sony with PS 2 Basis of Competition: • Sales of consoles are fiercely fought over – every console purchase represents a near-guarantee of future game sales – High switching costs • Research and development of new console technology is the frontline in winning over potential buyers.

INDUSTRY & ENVIRONMENT OVERVIEW Industry Competition VIDEO GAME CONSOLE MARKET. 2005 brands ranked by unit sales .

INDUSTRY & ENVIRONMENT OVERVIEW Industry Key Success Factors • Ability to quickly adopt new technology • Aggressive marketing/franchising .given the high level of competition • Downstream ownership links • Establishment of brand names • Economies of scale • Development of new products .

most expensive -Lose money on consoles -Not as many benefits as other consoles -New to industry Sony PS3* Quality Microsoft XBOX 360 Gamers Connection *Wii and PS3 are based on 2005 projections from the companies for 2006 .COMPETITOR ANALYSIS For the 7th Generation of Game Consoles Company Nintendo Product Wii* Target Market New Users (Young. Female) Old Users (Nostalgia) Gamers & Movie buffs Core Competency Innovation Differentiation Strengths -innovative technology -ease of use -relatively inexpensive -nostalgia -download game titles -Blue Ray Capabilities . Old.Graphics -Largest Storage -Most benefits -1st mover advantage for generation of consoles -Strong Video Game HALO -On-line game play -Backwards compatibility -HD capabilities Weaknesses -Low resolution -No online game play -High R&D costs -Price.

Trademarked Characters Innovation & Ease of Use .SWOT Analysis Strengths  Leader in hand held gaming market (DS) High Brand Equity.

SWOT Analysis Weaknesses  Profits are down 21%. Gamecube console sales weak  R&D costs on Revolution (Wii) are higher than expected  Perceived as being childish .

SWOT Analysis Opportunities  Gaming is becoming mass market recreation and is industry is becoming increasingly globalized  Next generation of consoles are about to be released  Casual/Female/Aging/Novice gamers market is not being targeted by competitors .

SWOT Analysis Threats  Game console arena very competitive. Release of XBOX 360 ahead of Wii and PS3  High switching costs  Product life cycle is short for new console technologies .

STRATEGIC MARKETING IMPLICATIONS Point of Leverage Strength: Innovation & Ease of Use + Opportunity: Gaming is becoming mass market recreation and industry is becoming globalized _______________________________________ = Nintendo can make new technologies easily adaptable for the 1st time gamers that are new to the market .

STRATEGIC MARKETING IMPLICATIONS Vulnerability Strength: Innovation & Ease of Use + Threat: Product Life Cycle is short for new technologies ____________________________________ = Competitors can copy new innovations of consoles into the next generation (3-5 years) .

Nintendo’s Strategic Response to the Fork-In-The-Road How did Nintendo position their new console the Wii to appeal to the new. untapped mass-market segment. yet remain different from competitors? .

wide variety of users • Casual Gamers. The Nintendo Wii had a mass-market appeal (price+ ease of use) and represented a new activity of socially and physically interactive entertainment for any age.STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii TARGET MARKET • • • 5-95 year olds . . and Females This was a target market that had not yet been tapped into by competing companies. Young. Aging Gamers.

STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii PRODUCT: Nintendo Wii home game console system • Brand Equity Associated with Nintendo • Universal Brand Name – The name Wii is simple and can be easily remembered by people of different languages.the name also sounds like “we” which is a core representation of their product appeal • Free 90-day warranty Extension Features – Console with built in Wi-Fi capability – Motion sensor bar – Wii wireless remote controls – speaker. rumble feature and expansion port – Free game included with purchase of console • Wii Sports .

99 with one game included with purchase • Competitors Prices – PS3 $500-$600 no game included – Xbox 360 $300 &$400 no game included .STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii PRICE • Low-price Leader ( Generates $50 profit. PS3 and Xbox 360 incurs an average $250 loss) • $249.

STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii PROMOTION • Entertainment for All – A new and innovative interactive gaming system for the whole family • Strategic launch date – Holiday demand • Advertising Slogans: – "Wii would like to play" – "Experience a new way to play.“ .

First and Original Wii Commercial .

but about how many people we can get to play games. consoles.“-Satoru Iwata .STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii PROMOTION/POSITIONING: Universal • Entertainment • An innovative product that represents a completely new product category for gaming entertainment and appeals to all ages. genders and races Nintendo thrives on its experience in the gaming industry combined with a product that differentiated itself from competing products "We're not thinking about fighting Sony. The thing we're thinking about most is not portable systems. Nintendo CEO . and so forth. but that we want to get new people playing games.

STRATEGIC MARKETING IMPLICATIONS Market Mix Nintendo Wii PLACEMENT -Mass Merchandisers -Specialty electronic stores -Available to everyone .

BRAND EQUITY AUDIT IDENTITY • Built around innovation – Representing a new product category of motion sensor technology appealing to a wider target market • Familiar Brand – Nintendo has a strong brand identity – Top-of-mind association in video game product s – Nostalgia of original brand – First gaming console developer .

Appealing Price – Easily adaptable for New Markets .BRAND EQUITY AUDIT INTEGRITY  Fulfills its expectations with its features • Provides benefits that match consumer expectations – Does not promise to be the best system with best Graphics • Promises: Ease of Use. Innovation. Simplistic Design.

Individual – Changes the perception of gamers to more social .BRAND EQUITY AUDIT REASONANCE • Unique – This system is as different as the users that it represents – highest level of salience with motion sensor gaming technology • Family Entertainment – The 1st and only console to involve the entire family – Part of the “Living Room” – More than just video games. entertainment • Social Interaction vs.

Road How should the company set about building mass-market appeal while retaining its point of difference to compete with Sony and Microsoft in the game console market? Was Nintendo successful dealing with their strategic Issue? YES!!! .Fork -In-The.

fits target market • Targeted New Market – Exploited non-traditional gamers not targeted by competitors • Low Cost of Product + Profit on Console – Opposed to following traditional trend of consoles being loss leaders – Profits from larger margins on software .KEY REASONS FOR SUCCESS • Adaptability and Easy of Use – 15 minute learning curve.

create your own path! Competitors were making incremental changes to new generations of consoles to impress consumers while Nintendo was making radical innovation for a completely new market! “the central premise. CEO Nintendo 2002 .LESSONS LEARNED ONE Don’t follow competitors.” – Satoru Iwata. it is best to zig when other zag.

LESSONS LEARNED TWO Marketing Success starts with a Great Product ! Nintendo was able to be successful because they not only appealed to an untapped market but gave the market a product that provided benefits best suited their wants and desires Right Product + Right Interface + Right Market = Success !!! .

LESSONS LEARNED THREE Lead The Customer! Let your competencies define your market. don’t let your market define your competencies nintendo’s competencies: •Innovation • Ease of Use • Brand Equity • Market Knowledge = Adaptability of new untapped consumer base .


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