FOEM SELF-STUDY

NINTENDO: CREATING THE PERFECT

PRODUCT AT THE PERFECT TIME

SUBMITTED BY: PARIDHI GARG (1RV17CH024)

BRIEF BACKGROUND

Nintendo was founded in Japan in 1889. It first produced handmade

playing cards, and today it’s one of the most profitable games
companies in the world.
But Nintendo wasn’t always the gaming powerhouse that it is today.
In fact, the company almost went out of business just 30 years ago.
 THE CHALLENGE

• Three decades ago, Nintendo debuted its first home console, the Famicom, alongside
several other contenders for control of Japan's nascent home gaming market. A
combination of great hardware design, excellent software, canny marketing, perfect
timing, and a bit of humble pie helped vault Nintendo into the lead over its
competitors.
• Following the introduction of their Family Computer Disk System (or “Famicom”) to
the North American market, Nintendo faced some hard times that threatened to sink the
company.
•  The system carried on for more than a decade, winding down in 1994 with the
masterful Takahashi Meijin No Boukenjima IV (Adventure Island IV). By that point,
the Famicom hardware was well out of date
But in September, 1985, they
rebounded with perhaps the most
famous video game of all time.
SUPER MARIO BROS.
A collapsed video game market in the United States meant high Western demand
for quality games, but no supply to match. This gave Nintendo an untouched
goldmine of consumer interest.
With a little marketing magic, Nintendo tested the American market by releasing
their new game in select cities to thunderous success.
The rest is pretty much history. Nintendo has churned out profitable Mario games
on a regular basis, and their Italian plumber mascot is a big reason that Nintendo
became the industry powerhouse that it is today.
And it all came down to one game that they released at the perfect moment.
 While the iconic, mustachioed plumber may
have previously appeared in other
games, Super Mario Bros. is what propelled
him to super stardom. It made Mario, Luigi,
Princess Peach and Bowser household names,
and helped rocket Nintendo into its perch as
then-master of the gaming space.
 Mario also helped save the gaming industry as
we know it, after it nearly blinked out from
existence in 1983.
 HOW DID THEY EXACTLY DO IT?

 What made Nintendo successful was great games, highlighted by Super Mario Bros. But it was also the
way they positioned their product.
 Instead of having consumers or retailers think about this console as another version of the Atari 2600 or
the Mattel Intellivision, they wanted this to be an "entertainment system," something a little more
sophisticated. So this was the Nintendo Entertainment System.
 To play up that idea, the American product came with a robot, named R.O.B. He ended up being kind of
useless, and not integrating with any games. But it was just a move on Nintendo's part to say, "Yeah,
maybe video games are dead, but this is a whole new thing that you'll have to try to understand.“
• The company did a lot of guerilla-type tactics of going to malls and just trying to get
people excited about video games. 
• People thought they were stupid, and that video games were done.
• No retailers wanted to buy it. So they decided to concert their efforts into one specific
place. They selected New York, because of the adage: "If you can make it there, you
can make it anywhere." In the fall of 1985, they did a "test launch," just to see if video
games could be resurrected.
• Nintendo did this test launch in New York. It wasn't a runaway success, but it was good. They then
went to Los Angeles, and then they started rolling out the NES nation-wide. Within three years, it
had financially resurrected video games, and the industry was booming. Sure, they were able to
position themselves away from Atari. But at the end of the day, what made Nintendo successful
then is they made incredible games.
• Super Mario Bros. was really that breakthrough game, that killer app you need when launching a
console or new hardware. That was the game that put them on the map, and allowed them to really
branch into other things. They eventually got into television and movies and general
merchandising.
Nintendo also wanted to support the consumers so they didn't feel
burned. Two things they did that were very successful were
creating Nintendo Power, a magazine to promoting games and showing
screenshots, they also created the game help line, a toll-free number
you could call to get advice or help if you were stuck in the game. They
did want people to buy the games and get maximum enjoyment out of
them.
NINTENDO’S LESSON: TIMING IS
CRITICAL

 The timing of Super Mario Bros. played a major role in its
reception by consumers.
 If the video game industry hadn’t just collapsed from an
influx of high-price, low-quality products, Nintendo
wouldn’t have had the market vacuum that led to its
modern success.
 That collapse destroyed hundreds of competing companies
that flooded the video game market too, which meant
Nintendo’s quality games could stand out on the shelves.
 On the flip side, the gaming community was naturally
suspicious of anything new on the market — a lot of the
games over the past few years wound up being high-priced
junk.
 Regardless, if another company would’ve released a
quality game at the same time, Nintendo wouldn’t
have had the market domination that earned it so
much revenue.
 And if Nintendo had restricted Mario and Luigi to a
Japanese release, who knows where they would be today.
 But they took a risk on a down market that just so
happened to have a huge demand — even if consumers
were suspicious — and very little supply.
 And as of 2014, Nintendo has so much money in the bank
that it could run a deficit for almost four decades without
ever closing its doors.
Now that is quite a
rebound.

Thank you.