2. Situation Analysis
Video Games are an 18.7 billion dollar industry in the United States as of 2014
Projected to grow to 22.6 billion in the United States by the year 2019
Markets across the world are mixed
Canada, Germany, Japan, and the United Kingdom have declined in their market.
China is a growing market for video games.
3. Situation Analysis (cont.)
Microsoft and Sony are Nintendo’s biggest competition.
Microsoft is the leader in the market at 16.3% market share, up 5.9% over the last
Sony is second, up from 11.3% to 15.9% market share over five years
Nintendo has vastly declined, down from holding 26.6% of the market share in
2009 to just 10.9% in 2014
4. Situation Analysis (cont.)
Gamers are getting older; the average gamer is now 35 years old.
71% of the entire population plays video games.
Females over 18 years old now make up a larger portion of gamers (33%) than
males under 18 (15%)
4 out of 5 households now own a gaming console, with there being an average of
two gamers in each U.S. household.
The gender ratio is actually pretty close to even, 56% of gamers are men, 44% are
Gaming has now become a social activity; 56% of people play games with others
5. Situation Analysis (cont.)
Indie games (games made by third party developers) are becoming more popular
Steam, a service Nintendo’s competitors offer, offers easy access to several indie
games and regular games alike.
29% of Americans have paid to play video games online last year.
Gamers are getting older, tastes are shifting to more mature games.
Pressure on government to regulate violence in video games.
Internationally recognized name brand
Several Nintendo exclusive franchises, such as Mario, Pokemon, Donkey Kong, and
Legend of Zelda.
Games are typically easy to play and are family-friendly.
Hold enough assets to sustain their current sales losses for another 20 to 30 years
before they run out of money.
While the console game has struggled, Nintendo has dominated the handheld
market, most recently with the 3DS
Horribly critiqued online play; with gaming becoming a social activity, online play
is a must today.
Lack several titles in the four major gaming categories (action:28.2%;
shooter:21.7%; sports:13.3%; RPG:9.5%)
Bad relationships with several game developers, most notably Square, who’ve
developed several wildly popular game series like Final Fantasy, Kingdom Hearts,
Just Cause, and Tomb Raider.
Refusal to go third party means losing out on the growing indie game segment.
Overseas presence gives a great opportunity to enter growing markets, most
Nintendo could potentially have a third party port for its handheld system,
allowing mobile ‘app-store’ games to be played on the 3DS.
Mending relationships with developers and changing their next-gen consoles will
allow Nintendo to get ports of popular games again.
Changes in the gaming industry, moving from hardware to digital.
Developers continuing to hold out on Nintendo.
Nintendo is very good at preventing this, but piracy is always a threat to game
In a plunging economy, another crash could send video game sales plummeting.
10. Strategic Growth Opportunities
Mend relationships with game developers to get ports of most popular games on
Internet capabilities and online multiplayer for the Nintendo consoles need to be
on par w/ Microsoft and Sony in order to compete.
Next-generation console needs to go back to basics, somewhat like a Gamecube
model but with the Wii’s internet features and a better server.
If console sales do not increase, move Nintendo to a strictly handheld brand. Most
Nintendo exclusives are ported to the 3DS anyway and game developers such as
Square have launched exclusives on the 3DS. The handheld also is Wi-Fi capable,
and streetpass has actually gotten several positive reviews.
11. Target Market
1. Middle aged gamers
2. Lower to middle income gamers
3. Focus on U.S. because it has the largest
continually growing market, and China has
the highest growth.
1. Families looking for a way to spend time
2. Parents looking for a safe console for their
kids to play.
3. Older gamers who like the games they
played as kids.
12. Positioning Statement
To seasoned gamers looking for the best value for their money,
Nintendo is the brand of gaming systems that provide a great
experience for both young and old gamers alike.
New console provides a back to
basics feel in gaming, along with
higher processing power.
Internet capabilities open the
Nintendo store up to several new
Option to link console to your mobile
Nintendo store opens doors to
several third-party games.
Parental controls allow parents to
filter who their kids play with online,
but also allow the option to play with
people across the world.
Nintendo’s internet will still be free in
order to deliver the promise of value.
Nintendo makes amends with
Square, EA Sports, and others in
order to get ports for their games on
the new console.
Making amends with developers will
also allow Nintendo to collaborate
with them and develop console
exclusives for their franchises.
Sell the concept of Nintendo’s new and improved internet capabilities.
Promote across several social platforms in the United States.
Targeting mostly families, feature advertisements on several child-friendly shows.
Direct-mail to consumers who have kids and families, possibly special offers to
Get a YouTuber to give an honest, positive review, because kids get more
information about games over social media these days and trust their YouTubers
more than God himself.
Using space they already have reserved in
stores to market their new products.
Central displays in game stores across the
United States, showcasing games on
competitor’s consoles as well.
Heavy emphasis on sponsoring events
(sports, conventions, etc.)
Nintendo has always been the value leader in video games, and will continue to
deliver on that promise made in our positioning statement.
Nintendo will not charge for its internet access like Microsoft does for Xbox Live;
however, certain downloadable content may require a payment (premium packs
for certain games, third party apps, etc.)
Nintendo’s hardware will still continue to run under the pricing of Sony’s for their
exclusive games, consoles, and controllers, but certain games released by other
publishers that are also released on Nintendo consoles may need to meet
competitive prices set by publishers (new Madden, Tales of, Call of Duty, etc.)