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Nintendos Innovative Resource Strategy Media

Essay add: 19-06-2017, 12:54   /   Views: 15

Nintendo soon developed into a video game company, becoming one of the most influential in the industry and Japan's third most valuable listed company, with a market value of over US$ 85 billion. As of October 2, 2008, Nintendo has sold over 470 million hardware units and 2.7 billion software units.

Nintendo Entertainment System (NES) was introduced in 1985, it was an instant hit. Over the course of the next two years, it almost single-handedly revitalized the video game industry. Selling over 60 million units, people brought games like Mario and Zelda into their homes for the first time on the NES. Later it included several innovative game consoles like Game Boy, Nintendo 64, Game Cube and Nintendo DS.

On November 19, 2006 Nintendo released Wii which competes with Microsoft's Xbox360 and Sony's Playstation 3. As of August 2010, the Wii leads the generation over the PlayStation 3 and Xbox 360 in worldwide sales. and in December 2009 broke the record for best-selling console in a single month in the USA.

Since its launch, the monthly sales numbers of the console have been higher than its competitors across the globe. According to the NPD Group, the Wii sold more units in the United States than the Xbox 360 and PS3 combined in the first half of 2007. This lead is even larger in the Japanese market, where it currently leads in total sales, having outsold both consoles by factors of 2:1 to 6:1 nearly every week from launch until November 2007. In Australia, the Wii exceeded the record set by the Xbox 360 to become the fastest-selling game console in Australian history.

Q1. What conclusions do you draw about the competitive advantages of Microsoft? Are its advantages sustainable over time?

Competitive Advantages

Xbox 360 is unique due to wireless controller

Some games are exclusive designed for Xbox. Example: Condemned, Dead or Alive, Halo, Etc.

It comes with Arcade Marketplace

Cheap Games, Great Effects, Addictive Non-Stop Games

Super Powerful Multimedia Console

8 times more memory than original Xbox

Xbox 360 has 10 times more powerful CPU compared to Xbox.

Compatibility of Backword is excellent

Product Implementations

In order to create competitive advantage in the gaming industry, Microsoft enacted crucial product implementations that allowed it to differentiate itself from its competitors. After coming in second to PlayStation 2 in number of units sold, Microsoft decided to enhance the Xbox, coming out with the acclaimed Xbox 360. The new system effectively doubled the bandwidth and added eight times the memory of the original Xbox. In addition, its CPU had ten times the processing power of the Xbox. These additions of enhanced graphics and playing power attracted new customers. Microsoft also created a service, known as the Xbox Live. Subscribers have the unique experience of interacting with other gamers, streaming media, and even buying add-ons to games. This differentiation strategy has proven extremely successful, and even in the recession has a record number of sales.

System Implementations

On the side of system implementations, Microsoft has somewhat locked in customers. Once a customer has purchased a console at, say for example $300, they are essentially making an investment and will most likely purchase games for that specific console in order to get their money's worth. The games are where Microsoft makes most of its money, so the strategy works. Access to the Xbox platform is said to be 'rigorously controlled by Xbox', creating a barrier to entry in an already difficult to enter market. Xbox developers also established a major alliance when one of the most popular game developers, EA Games. This "alliance factor" also holds true with Xbox being the only one to carry Halo and Gears of War. This opportunity to be the only compatible console made potential revenue for Microsoft grow tremendously. The same applies for the Xbox partnering with Netflix in order to bring Xbox Live subscribers movies on demand. All of these strategies combined have helped keep Microsoft near the top, even though they were the last to enter the gaming industry.

Conclusion

Microsoft's competitive strategies for the Xbox would be focus in the video game industry, and differentiation of their product from others. Xbox is labeled under focus, because it is only dealing with one section of the technological world which is the video game industry. It is also labeled under differentiation because Microsoft offers a specialized product with various features, making it stand out from the competition. One example includes the online gaming network Xbox Live, which is unmatched as far as available services. It is exclusively designed to only work on Xbox systems, while the capabilities and functionality of the broadband network far exceed those of its competitors.

Q2. What core competencies does Nintendo posses? Is it capable of levering them further? If so, how?

Consumer Benefits

Low Cost

Gaming Experience

Online Services like news, weather, etc.

Access to classic Nintendo games

Fitness Games - Boxing, golf, tennis, baseball, bowling, etc.

Additions - Wii Fit,

Fitness Gaming: The Nintendo Wii, launched in the fall of 2006, is an exergame that requires users to apply physical movements to manipulate actions of a video game.

Wii Sports included baseball, bowling, boxing, golf and tennis games, and revealed that playing Wii Sports increases heart rate, maximum oxygen intake and perceived exertion, which ultimately translates to calories burned. Coming in at number one in the study, Wii boxing produced the most significant results, approximately 216 calories per 30 minutes, followed by tennis, baseball, bowling and lastly golf, which came in at 159, 135, 117, and 93 calories respectively.

While playing the Wii does not produce as good a fitness benefit as playing the real sport, the video games proved to burn more calories and increase energy expenditure than playing a sedentary video game. However, Wii was still better than PS3 and Xbox 360 in that aspect.

Competitive Advantages

Cheapest Console

Gameplay

Graphics

Motion Play

Burn Calories

Price: Nintendo are firstly that it makes their console cheaper to manufacture. This means that they can sell the base console at a profit whilst their competitors have to subsidise the retail price. It also gives Nintendo far more room to manoeuvre when it comes to using the price mechanism to take on that competition.

The second advantage is that games are a lot easier, quicker and cheaper to develop. In fact they are more comparable with PS2 games in this area. This, obviously, has a massive effect on what appears on the game shop shelf and when it appears. Quite simply, it should be far easier for a publisher to make a profit on Wii, which explains why so much development resource has been directed at it.

GamePlay: The reason he gave was that gameplay was the most important thing, not graphics. And that the VCS 2600 had finely crafted and polished games in which the gameplay was paramount.

This is a debate that has cropped up again and again over the years. Always the platform makers give us ever higher graphics capabilities. And nearly always game developers throw ever increasing resources at utilizing those graphics capabilities to the maximum. What a game looks like has become the most important thing.

Yet talk to serious gamers about their favourite games. Often you hear the names of titles like Elite, GoldenEye and Super Mario 64. Games with quite miserable graphics compared with more modern offerings.

Leverage

Additions / Accessories

Online games

HD / Blue Ray

High Sensitive GamePlay

More Motion Games

Q4. What is the strategic significance, if any, of the efforts of games machine makers to establish their own special technical standards? What are the risks of such strategies?

Nintendo is a Japanese company that has been a major competitor in the videogame industry since the introduction of the Nintendo Entertainment System in 1985. In recent decades, Nintendo has developed several successful consoles that allowed it to compete with rival firms and experience great success. In 2001, however, Nintendo released Gamecube, which turned out to be a flop. It was unable to compete with Microsoft's Xbox or Sony's Playstation 2. Because of this, it looked as though Nintendo was down and out of the videogame business. Nintendo was forced to change its approach to videogames and, in doing so it completely revolutionized the videogame industry. In 2006, Nintendo introduced the Wii. The Wii is an innovative new system that takes advantage of new technologies and targets consumers of all ages. The Wii has allowed Nintendo to not only compete with Sony and Microsoft, but to experience the incredible success it remembers from its earlier days.

Technology has been an integral part of the Wii's success. However, it has not engaged Playstation 3 and Xbox 360 in an arms race with hard drive, memory, graphics, and storage technology. Instead, Nintendo has made use of new and innovative technology neglected by competitors. Nintendo's innovative approach to videogame technology is evinced through the Wii's controller system. The controller system consists of the Wii Remote and the sensor bar.   The Wii Remote, often called the Wii-mote, is a small, wireless wand with motion sensing ability. It allows users to control the video game simply by moving the Wii-mote.   The sensor bar, which is usually placed near the television screen, detects the movement of the Wii-mote.  The Wii-mote was made by combining existing technologies and using them in a new, original way (Kopchak). The technologies that Nintendo combined to develop the Wii's controller system are infrared technology, motion sensors, and Bluetooth.

The interactive entertainment industry has grown remarkably quickly in recent years.

Since 2001, the market has been dominated by three major players: Sony, Microsoft, and

Nintendo. Of these, Nintendo had the smallest market share, even though the company had historically dominated the market. In 2004, faced with strong competition from larger and wealthier rivals, Nintendo had to come up with an innovative strategy to maintain profitability. At that time, the optimal strategy was differentiation into a neglected segment of the market: casual gamers who wanted a simpler, more intuitive gaming experience.

Nintendo's status in 2004

Unlike its competitors, both of which are powerful players in consumer electronics and

business software, Nintendo is primarily a video game company. Nintendo has three main

products: consoles, handhelds, and software (games). Typically, only one console product is sold at a time; production of one generation ceases shortly after the next generation is released. Nintendo's console in 2004 was the GameCube, which had been on the market for three years. The competitors' products (Sony's PlayStation 2 (PS2) and Microsoft's Xbox) were approximately the same age, but had several advantages over the GameCube. Though they cost a little more, they had more advanced networking and media-playback

features. By March 31, 2004, only 14.6 million GameCubes had been sold worldwide According to Nintendo's 2004 Annual Report. Nintendo's position was stronger in the handheld gaming market. Nintendo develops software for all of its gaming systems. Although software is expensive to develop, it can be sold at a high margin.

OWN TECHNICAL STANDARDS OF MACHINE MAKERS:Sony's Playstation 3

Playstation Network

Some games are exclusive designed for PS3. Example: God of War, Etc.

Multimedia Network

Visual Effects, 720p resolution

Wireless Internet, Browsing

Memory up to 160 GB

Blu-Ray, DVD, USB, Photo, MP3, AVI & MP4 Video, HDMI, etc.

Microsoft's Xbox 360

Digital Entertainment - DVD, CD, MP3, Photo Playback

Some games are exclusive designed for Xbox. Example: Condemned, Dead or Alive, Halo, Etc.

Personalize your console

Plays nearly 300 Xbox Classic titles

Xbox Live

Nintendo Wii

Low Cost - Cheapest Console

Gameplay - Gaming Experience

Online Services like news, weather, etc.

Access to classic Nintendo games

Fitness - Burn Calories

Additions - Wii Fit,

Graphics

Motion Play

DS Interaction

Virtual Console

Wii Browser

Wii Connect 24

CONCLUSION

We can say that Nintendo doesn't want to be the centre of a modern home theatre. If there's one thing you should know about the Wii, it's that Nintendo's console is a toy, and not a home media centre. Although it introduces radical new technology to the world of gaming, in the world of home theatres it won't even play standard, store bought, full priced DVDs.

So, you get what you pay for. For those who see the Wii as an amazing holiday deal when placed next to the PS3 and Xbox 360, realize that the other two systems probably offer the better bargains. That's primarily because they both allow access to high definition games and movies, with each giving gamers the chance to own hardware that would otherwise cost them thousands of dollars (a stand alone Blu-Ray player is over £200, for example). If you want to make the most of your HDTV and high speed internet, or simply build a home theatre around a console, buy Microsoft or Sony.

However, if your only concern is to play fun games cheaply, then go Nintendo. As of now, it offers the most unique gaming experience. That doesn't necessarily mean it's the best one - that depends on your choice of games and your graphics but the Wiimote is clearly something that has an immense amount of gaming potential. Thus far, we're a little concerned Nintendo is the only company capable of churning out titles that can take full advantage of the hardware. However, with enough media attention (and the Wii is clearly the mainstream press' current sweetheart), it will not only arouse third-party support but will actually demand it. Unlike the Gamecube age, developers like Electronic Arts and Ubisoft will not be able to provide half-assed efforts when making titles for the Wii (that is, not unless they like missing out on some serious cash). So, go buy a Wii.

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