Over the last 25 years the video game industry has grown rapidly, becoming a significant player in the media landscape, rivalling that of television. The industry is dominated by three key players, Sony, Microsoft and of course Nintendo, which will be centred on. The core strategy behind these global giants revolves around the same key idea, that money is to be made in software as development and manufacturing costs keep the consoles break-even sales price from most consumer price points (Williams, 2002). However the approach taken by Nintendo varies considerably from its two main rivals.
Nintendo Co. launched its first video gaming system in 1983 and has since sold over 4.2 billion games worldwide, over 669 million of which being hardware units (Nintendo, 2014). Starting as the dominant player in the industry, Nintendo rejuvenated the video game market with the release of its first console, the NES and quickly established dominance. However with new players entering the market, a turbulent ride was caused for Nintendo throughout the past quarter of a century.
Nintendo has experienced both success and failure throughout its history as it watched some rivals fail and other new powerful ones enter and achieve sizeable market share. The legacy of the company is behind their games only being playable on Nintendo consoles. This, they claim, is key to their success. However with changing markets and increased usage of smartphones and tablets, less people are opting for games console. Nintendo looks to the future to determine their sustainability, do they succumb to pressure and license out their games or is there another unique innovation in the pipeline to follow the infamous, Wii, DS and Gameboy.
Is Nintendo Successful?
The interactive entertainment software market is characterised a product lifecycle of 5-6 years and frequent introductions of new products (Hollensen, 2013). Nintendo’s success has been attributable to a number of key product innovations throughout the years, most notably the Nintendo Entertainment System (NES) in 1985, the Gameboy in 1989, the DS in 2004 and most recently the Wii in 2006. However the company has also launched a number of dud products during the late 1990s/early 2000s as well as in recent years.
Today the company sees itself in a difficult position, lagging behind competitors and trying to keep up in a changing marketplace. While Nintendo is still the market leader, market share is dwindling, falling a sizable 10% in a matter of four years (Euromonitor, 2014). It has been a number of years since Nintendo has created a successful innovative product and the company is beginning to feel the effect. If Nintendo doesn’t do something soon to change this, the future is bleak for this gaming company.
The total market share of the three leaders has dropped suggesting the growth of software companies, particularly those creating mobile gaming apps. However Microsoft has managed to increase their market share by...