Nintendo Business Model and Key Issues

Nintendo: The Business Model

Nintendo's business model is "Keeping it simple". Unlike its rivals Microsoft and Sony, Nintendo's strategy is to concentrate on pioneering a daringly different video controller was initially viewed very risky, but it so far had proved spectacularly successful. Even though Nintendo's release of Wii game console was overshadowed by Xbox 360 and PlayStation 3, it was hugely successful. One of the main reasons for its success is its target market. They are not targeting games to buy their product. Instead, they are concentrating on moms, families and grandparents who are after an interactive game that anyone can figure out in a few minutes, not interactive games with awesome graphics. I guess we can compare this to a blue ocean strategy. Instead of going after hard core gamers where the market is preoccupied by giants like Xbox 360 and PS3, they are going after a new market segment of gamers. Nintendo also introduced innovations for its new customers such as motion stick and pads. By sticking with no bells and whistles for their game console, they can cut down on costs by using lower speed processors and less development costs. Another strategic move for their success was its decision to diversify its manufacturing base and partnerships for the manufacturing and supply of key components.

Key Issues that needs to be addressed

Just like any other company in the text book, Nintendo is riding the high waves. Primary challenges facing Nintendo are how Nintendo can continue expanding its customer base and defend its market from its rivals. It's not that easy. Companies such as Microsoft are catching up. Their recent introduction of Kinect, an attachment to Xbox 360 can do similar things like Wii and it can also be an interactive game console with awesome graphics. Another issue is