Nintendo’s Wii

Nintendo’s Wii

MGMT300(005) Report

Group 3:

Table of content

Situation analysis  ------------------------------------      1

Strategic analysis

          The SWOT analysis of Nintendo  --------------------------    6

           Porter’s Five Forces Model of Nintendo  -----------------    10

Case question  -----------------------------------------   14

Recommendation  -------------------------------------   17

Conclusion  --------------------------------------------    18

Reference  ----------------------------------------------   19

Company’s situation analysis

  Nintendo was founded as a card company in late 1889, later (1951) named Nintendo Koppai(Nintendo Playing Card Co. Ltd.). Based in Kyoto,Japan, the business produced and marketed a playing card game called Hanafuda. The handmade cards soon became popular, and Yamauchi hired assistants to mass-produce cards to satisfy demand. However, the game industry market  had been dominating by two powerful producer Microsoft and Sony, it became a great obstacle for Nintendo’s new entrance. Not only did Nintendo sit behind Sony and Microsoft in terms of overall sales, but it also derived most of its revenue from the video game business. And that situation have no longer existed  by Nintendo’s release of Wii in 2006. Nintendo’s sales continued to soar, and within two years of its release. Wii became the market leader of the generation. As of 2008, Nintendo’s revenues and income were on attractive upward trajectories. Exhibit 2 shows that Nintendo’s stock price was soaring, despite the recession, relative to that of its larger competitions. However, some observers questioned whether Nintendo can keep the Wii momentum rolling into the next generation of gaming system.

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     Nowaday, Nintendo, Microsoft and Sony are the three dominant video game business in the market. For the impressive growth, traditional games will no longer occupy the market share, the requirement of innovative, creative and technical improvement are necessary.  For instance, depressed consumers, aging console systems, and a massive shift from physical to digital media have created new headache for traditional firms like Microsoft, Nintendo and Sony. All three are gearing up their next generation of games.

   The Nintendo’s wii was created to establish a new standard in game control, using an innovation and unprecedented interface, the Wii Remote. Its motion-sensor capabilities allowed the user to interact and manipulate objects on the screen by moving and pointing the remote in various direction.

   The launches of the Wii and the PlayStation 3 in November 2006 were the beginning of the battle for market share in the fierce competition of the seventh generation of video game consoles. Although the Xbox 360 was released a year earlier, Microsoft intended to relaunch the Xbox 360 after some minor enhancements.The competition among three leader company was straight and fierce.