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Strategic Management of Change
           BUMGT5926
        Scenario Planning




Syafiqa Anneisa Abdullah     30089404
Navaneeswary Ganesamoorthy   30089407
Rei Lynn Lim                 30089392
Presentation Overview (1/2)
•Introduction
•Company Profile
•Microenvironmental Analysis
•PESTLE Analysis
•SWOT Analysis
•Porter’s 5 Forces Analysis
•The Industry Life Cycle
•Nintendo’s Key Success Factors
Presentation Overview (1/2)
•Analysis of Key Uncertainties
•Analysis of Future Trends
•The Scenarios & Implications
•Conclusion
•References
A Brief History of Video Games
          Atari to Wii
Introduction (1/2)
• Video games have been around since
  the 1940s.
• Over the decades, game machines
  continuously evolved to become
  powerful machines capable of stunning
  visuals and graphics.
• In the mid 2000 to 2007, social media,
  smartphone and tablet technology
  entered the gaming scene.
• Casual games become the norm
  attracting previously non-gamers into
  the market.
Introduction (cont 2/2)
 • As the dominant force of the mobile and gaming market, in the
   next coming 5 years, where does Nintendo see itself competing
     with threats from smartphones and other gaming platforms
                   taking up its share of the market?

• Scenario planning : To make strategic decisions that will be a
  sound foundation for all plausible and possible future scenarios.
Company Profile (1/3)
• Founded in 1889 in Kyoto, Japan by
  Fusajiro Yamauchi.
• Manufacturer of Hanafuda
  “flower” cards
• Expanded in 1960s by Hiroshi
  Yamauchi.
• Following the crash of the cards
  business, Nintendo entered the toy
  industry upon discovering Gunpei
  Yokoi, a mechanical engineer.
Company Profile (2/3)
• 1970: Yokoi teamed up with Shigeru Miyamoto to
  create games – The Father of Modern Video Gaming,
  creator of iconic franchises including Mario, Zelda and
  Pokemon.
• The rest is history.
Evolution of Nintendo Gaming
           Consoles
Industry Overview (1/2)
• The video game industry is dominated by 3 gaming
  giants
- Microsoft, Sony and Nintendo
• Currently at the 8th generation of console production
Industry Overview (2/2)
• U.S. computer and video game software sales grew six
  percent in 2007 to $9.5 billion – more than tripling industry
  software sales since 1996.
• Halo 3, the best-selling title of 2007, took in more revenue in
  its first day of sales than the biggest opening weekend ever
  for a movie ("Spider-Man 3") and the final "Harry Potter"
  book's first day sales;
• On average, nine games were sold every second of every day
  of 2007
• The average game player is 35 years old and has been
  playing games for 13 years.
Industry Analysis
• The Microenvironment –C3SPM
-Company
-Customers
-Competitors
-Suppliers
-Middlemen (Distributors)

• The Macroenvironment : PESTLE Analysis
The Microenviroment (1/2)
 Suppliers     Nintendo’s suppliers comprised of both hardware manufactuers
               and software developers.
               Hardware companies supply the various parts, components and
               provide the technology to manufacture Nintendo’s gaming devices.

Distributors   Online and offline distributors.
               The retailers: Includes specialised software boutiques, department
               stores, electronic stores and hypermarkets.



Customers      Diversified segment of consumers:
               Students, employees, military troops; seniors and parents.
The Microenviroment (2/2)
              The main competitors in this industry are Sony, Nintendo and Microsoft,
Competitors
              Sony has about 70% share in the market and the latter commands the
              rest of the market.
              Nintendo faces competition from Apple Inc while in the casual gaming
              market, Facebook is a likely upcoming competitor.
The Macroenvironment
              PESTLE Analysis (1/2)
Political Factor   Target of political activist concerning controversy about violence in
                   gamers.
                   Entertainment Software Rating Board (ESRB) that assigns ratings for
                   gaming content (ERSB, 2012)
Economic Factor    Purchasing behaviour is influenced consumer purchasing power.
                   Console development cycle follows roughly the general computer
                   industry cycle
                   Consoles are not upgradeable, consumer has to buy complete new
                   system.
 Social Factor     Video games are played predominantly by young males.
                   The current social trend on the rise are non gamers who have no
                   prior experience or interest in video games.
                   The number of female gamers are also on the rise. Digital downloads
                   and in-game purchasing is gradually becoming the norm.
The Macroenvironment
               PESTLE Analysis (2/2)
Technological Factor    Technology has improved processor speed, visuals and memory capacity for
                        gaming consoles.
                        Disruptive innovation in the form of smartphones and tablets have
                        significantly altered consumer lifestyles.

    Legal Factors       The legal issues faced by the industry are trademarks, copyrights, licensing,
                        online ownership and demands of intellectual property.



Environmental Factors   The video game industry uses a lot of plastic and metal resources for its
                        hardware.
                        In the current era majority people are environmentally aware.
                        Manufacturing game consoles creates non-biodegradable waste which is the
                        byproduct of this industry.
SWOT Analysis (1/2)

             STRENGTH                                      WEAKNESSES
 Nintendo has Shigeru Miyamoto, the creator       Console power weaknesses
  of Nintendo’s most successful game
                                                   Limited selection of software for hardcore
  franchises and intellectual property.
                                                    gamers.
 Low upfront costs
                                                   Brand name –Long perceived by the gaming
 The Nintendo brand name is a world cultural       community as a kid’s toy or for casual
  icon synonymous with video games.                 gamers.

 Nintendo has past success with family            Shigeru Miyamoto may eventually retire
  gaming model                                      from the gaming business.

 Nintendo has had extensive experience in
  the video game industry.

 Uniqueness of hardware motion detection
  when it comes to the Nintendo Wii
SWOT Analysis (2/2)
              OPPORTUNITIES                                            THREATS
   The first to introduce motion technology in    Sony and Microsoft are capable of mimicking and
    video games.                                    improvising on Nintendo’s technology.

   The availability of technology                 Disruptive innovation caused by Apple’s iPhone and
                                                    iPad successful ventures in the mobile and smartphone
   Variety of multiple gaming platforms.
                                                    market.
   Design games for novice and casual gamers
                                                   Third party software developers choose to develop
    including seniors and adults
                                                    games for smartphones and Facebook due to lower
                                                    cost of production and higher potential returns.

                                                   Social media gaming on Facebook is gaining popularity
                                                    amongst casual gamers.

                                                   Loss of potential customer due to limited sophisticated
                                                    games selection for the hardcore gamers.

                                                   Slow to adopt an online model for downloadable
                                                    content and microtransactions on a wide scale for
                                                    games on its systems.
Porter’s 5 Forces Analysis
                         Bargaining
                          Power of
                          suppliers
                           HIGH




                         COMPETITIVE
                           RIVALRY
                                                Threat of
                         WITHIN THE
                         INDUSTRY          Substitute Products
Threat of New Entrants
                           (HIGH)                 HIGH
       MEDIUM




                           Bargaining
                         Power of Buyers
                             HIGH
Video Games Industry (1985 – 2012)




Image source: http://13plymouth.com/wp-content/uploads/2010/09/lifecycle.bmp
Nintendo’s Key Success Factors (1/2)


              Key Success Factors
Definition: The combination of factors required
to accomplish organisational business goals
                   (Thebusinessdictionary, 2011)
Nintendo’s Key Success Factors (2/2)
    • Dominance over the casual gamers and portable
        gaming market
    -In 2001 – 2006, Nintendo have a big share over the casual
    and mobile gamers market with the Nintendo Wii and
    Nintendo DS.

    • Pricing advantage
    -Nintendo’s consoles are more affordable than its
    competitors.

    • Strong brand name.
    -Nintendo is well known for its games including Super
    Mario, Pokemon and Zelda.
Analysis of Key Uncertainties
• Rapid advancement of tablet and smartphone
   technology
- Tablets and smartphone becoming more powerful

• Uncertainty to the market size and potential
  returns

• Other alternative forms of digital entertainment.
-Facebook, digital platforms, Google +, internet TV, Apple TV
Analysis of Future Trends (1/5)
• Increase in social networking, mobile and
  digital markets
- Social networking platforms become more
popular.
-Availability of cheap or free games for
download on digital platforms, ie
iTunes and Facebook.
-Smartphones and other mobile devices
Will penetrate into Nintendo’s
market share
Analysis of Future Trends (2/5)
• Tablets as the next generation of console games
-The gaming industry will drive the evolution of technology for
tablets.
-Apple is already using games to promote and sell its iPads
-Developers viewing tablets as the ideal foundation for
developing games
Analysis of Future Trends (3/5)
Analysis of Future Trends (4/5)
• Shift into games-as-a-service
  model
-Games are evolving to become a service.
-More social games and virtual
worlds are created to fill in market space.
-Subscription base models,in-game
Purchases and premium membership
Memberships, virtual goods and
microtransactions will become the revenue
streams for such games.
In-game purchases (3/5)
Analysis of Future Trends (4/5)
• Slowed growth of traditional game
   retailing and publishing
-Console game manufacturers will
   continue to decline in sales in both
   hardware and software
-Traditional retail game stores will
   gradually exit the market.
-Gaming giants will produce their final
   console (8th generation) before going
   completely digital.
Analysis of Future Trends (5/5)
• Emergence of digital content and
  new publishing models
-Third-party software developers such
as Ubisoft and Electronic Arts will
concentrate on developing games for
the mass market and serious market.
-Business models for gaming will
change.
Scenario Themes: Pokemon Evolution
Scenario Themes and Implications (1/7)
Scenario Theme 1: Pokemon Evolution
- The market for digital contents and games grow rapidly
- Increasing trend in casual gaming
- Smartphone and tablets become a popular
gaming platform
-Third party game developers (Ubisoft and
 Electronic Arts choose to develop games for
Digital platforms, i.e. Apple iTunes)
- Perception of console games as being too costly
to develop for
Scenario Themes and Implications (2/7)
Strategic Implications of scenario
-Nintendo need to adapt and change its existing model to fit the
trends.
-Include a digital platform for casual gamers to access their vast
library of affordable or free games.
-Redesign existing popular franchises (i.e. Mario) to
suit the casual gamers market
-Create new games that appeal to the casual gamers
-Design a console that attracts both casual gamers
and existing gamers.
Scenario Themes 2: Link
Scenario Themes and Implications (3/7)


Scenario Theme 2: Link
-Trend for casual gamers growing but not as fast.
- Existing digital platforms (i.e. iTunes) are flooded
  with low-quality, no brainer games.
- Existing games on smartphones and social media
  lack the sophistication of console games.
- Many third-party game developers are
-Still uncertain of the new revenue model.
Scenario Themes and Implications (4/7)
Strategic Implication of Scenario
- Nintendo to protect its reputation for
  producing quality games.
- Leverage on its brand assets by making
  their games available across various
  platforms including social media,
  iPhone, iPad and smartphones.
- Spread brand awareness of its games to
  gradually win casual gamers over as
  Nintendo fans.
Nintendo’s Popular Game Franchises (5/7)
Scenario Themes and
               Implications(6/7)
Scenario Theme 3: Bob-omb
- Video game console industry continues to decline and
  traditional retail and online game shops dies off.
- Tablet technology catches up to the performance of game
  consoles.
- Popularity of casual games and gamers increase .
- The revenue generated attracts well-known third party game
  developers.
- More quality games are produced for the
smartphone, social media and other digital platforms
Scenario Themes and
                  Implications(7/7)
Implications of Scenario
- In the worst case scenario, if Nintendo does
not keep up with the trends, competing social
and mobile devices will take over the casual
gamers market.
-Third party game developers will not want to
develop games for Nintendo due to it being too
costly.
-Nintendo will eventually pull out of the
hardware market to cut its losses
-Will focus on developing games for existing
Platforms instead.
Conclusion
• The console gaming industry matures and is entering the
  decline phase.
• Console manfacturers are facing stiff competition from tablet,
  smartphone and social media technology.
• Casual and mobile gamers are on the rise.
• In order to compete and sustain in the long-term, Nintendo
  must evolve according to the technology and social trends.
• Its strength lies in its popular game franchises.
• To compete effectively, Nintendo needs to spread its brand
  awareness through its franchises and create games that appeal
  the casual gamers market.
Q and A
Thank You Very Much
References
Baker, Liana. (2012) RPT-Apple's new iPad making waves in video game market retrieved from
     http://www.reuters.com/article/2012/03/12/apple-videogames-idUSL2E8EA08920120312 on the 13th of May 2012

Brightman, James (2009) Can GameStop Survive a Digital Future?
Retrieved from http://www.industrygamers.com/news/can-gamestop-survive-a-digital-future/ on the 12th of May 2012

Brightman, James (2011) New Year's Resolutions for Sony, Microsoft and Nintendo Retrieved from
     http://www.industrygamers.com/news/new-years-resolutions-for-sony-microsoft-and-nintendo/ on the 10th of May 2012

Brightman, James. (2010) Games as Packaged Media Is Dead. says Venture Capitalist Retrieved from
     http://www.industrygamers.com/news/games-as-packaged-media-is-dead-says-venture-capitalist/ on the 10th of May 2012

Caoili, Eric. (2011) Ubisoft seeks to capitalize on 'social game benefits' of next-gen consoles
      Retrieved from
      http://www.gamasutra.com/view/news/170397/Ubisoft_seeks_to_capitalize_on_social_game_benefits_of_nextgen_consoles.
      php on the 10th of May 2012

Grant, Robert. (2006) Contemporary Strategy Analysis. (5th Edition) Singapore. Blackwell Publishing Limited.

Matthews, Matt. (2011) The US Video Game Industry Is Declining. Retrieved from
http://www.gamasutra.com/view/news/126016/Analysis_Is_The_US_Video_Game_Industry_Really_Declining.php on the 10th of
      May 2012

Minkly, Johnny (2012). Gaming’s White-Knuckle Transition.
Retrieved from http://www.gamesindustry.biz/articles/2012-03-13-nobody-knows-anything-gamings-white-knuckle-transition on the
      13th of May 2012

Meyer, De Wit. (2010) Strategy Synthesis. (3rd Edition) United Kingdom. Cengage Learning EMEA.
References
Brightman, James. (2011) Nintendo Needs to 'Change Strategy Drastically,' says Analyst. Retrieved from
      http://www.industrygamers.com/news/nintendo-needs-to-change-strategy-drastically-says-analyst/ on the 10th of May 2012

Schoemaker, Paul (1991) Retrieved from
     http://www.whartonmackcenter.com/files/0/5/517/Schoemaker,%20Paul%20J.H.%20When%20and%20How%20to%20Use%20Scenari
     o%20Planning-A%20Heuristic%20Approach%20with%20Illustration.pdf on the 13th of May 2012.

Schilling, Chris. (2012) Wii U App Store: How Nintendo will take Apple on at their own game

Schilling, Chris. (2012) It needs to be "intuitive, functional and simple" developers tell Nintendo Gamer
Retrieved from
http://www.computerandvideogames.com/338031/features/wii-u-app-store-how-nintendo-will-take-apple-on-at-their-own-game/ on the
       14th of May 2012

No Author. n.d. Fun Facts about Nintendo. Retrieved from
http://www.techeblog.com/index.php/tech-gadget/nintendo-facts on the 14th of May 2012.

No Author. (2011) The Transformation of Video Games Industry. Retrieved from
http://www.theesa.com/facts/index.asp on the 10th of May 2012

Scanlon, Jessie. (2007) Getting Serious About Gaming
Everyone knows video gaming is a growth industry. What's less well known is how Web 2.0 and big business are contributing to that growth
Retrieved from
http://www.businessweek.com/innovate/content/aug2007/id20070813_756874.htm?chan=innovation_special+report+--
      +the+power+of+gaming_the+power+of+gaming on the 13th of May 2012

N.a. n.d. Nintendo Company History Retrieved from
http://www.nintendo.com/corp/history.jsp on the 10th of May 2012.

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Nintendo Ltd, strategic management of change, 2012

  • 1. Strategic Management of Change BUMGT5926 Scenario Planning Syafiqa Anneisa Abdullah 30089404 Navaneeswary Ganesamoorthy 30089407 Rei Lynn Lim 30089392
  • 2. Presentation Overview (1/2) •Introduction •Company Profile •Microenvironmental Analysis •PESTLE Analysis •SWOT Analysis •Porter’s 5 Forces Analysis •The Industry Life Cycle •Nintendo’s Key Success Factors
  • 3. Presentation Overview (1/2) •Analysis of Key Uncertainties •Analysis of Future Trends •The Scenarios & Implications •Conclusion •References
  • 4. A Brief History of Video Games Atari to Wii
  • 5. Introduction (1/2) • Video games have been around since the 1940s. • Over the decades, game machines continuously evolved to become powerful machines capable of stunning visuals and graphics. • In the mid 2000 to 2007, social media, smartphone and tablet technology entered the gaming scene. • Casual games become the norm attracting previously non-gamers into the market.
  • 6. Introduction (cont 2/2) • As the dominant force of the mobile and gaming market, in the next coming 5 years, where does Nintendo see itself competing with threats from smartphones and other gaming platforms taking up its share of the market? • Scenario planning : To make strategic decisions that will be a sound foundation for all plausible and possible future scenarios.
  • 7. Company Profile (1/3) • Founded in 1889 in Kyoto, Japan by Fusajiro Yamauchi. • Manufacturer of Hanafuda “flower” cards • Expanded in 1960s by Hiroshi Yamauchi. • Following the crash of the cards business, Nintendo entered the toy industry upon discovering Gunpei Yokoi, a mechanical engineer.
  • 8. Company Profile (2/3) • 1970: Yokoi teamed up with Shigeru Miyamoto to create games – The Father of Modern Video Gaming, creator of iconic franchises including Mario, Zelda and Pokemon. • The rest is history.
  • 9. Evolution of Nintendo Gaming Consoles
  • 10. Industry Overview (1/2) • The video game industry is dominated by 3 gaming giants - Microsoft, Sony and Nintendo • Currently at the 8th generation of console production
  • 11. Industry Overview (2/2) • U.S. computer and video game software sales grew six percent in 2007 to $9.5 billion – more than tripling industry software sales since 1996. • Halo 3, the best-selling title of 2007, took in more revenue in its first day of sales than the biggest opening weekend ever for a movie ("Spider-Man 3") and the final "Harry Potter" book's first day sales; • On average, nine games were sold every second of every day of 2007 • The average game player is 35 years old and has been playing games for 13 years.
  • 12. Industry Analysis • The Microenvironment –C3SPM -Company -Customers -Competitors -Suppliers -Middlemen (Distributors) • The Macroenvironment : PESTLE Analysis
  • 13. The Microenviroment (1/2) Suppliers Nintendo’s suppliers comprised of both hardware manufactuers and software developers. Hardware companies supply the various parts, components and provide the technology to manufacture Nintendo’s gaming devices. Distributors Online and offline distributors. The retailers: Includes specialised software boutiques, department stores, electronic stores and hypermarkets. Customers Diversified segment of consumers: Students, employees, military troops; seniors and parents.
  • 14. The Microenviroment (2/2) The main competitors in this industry are Sony, Nintendo and Microsoft, Competitors Sony has about 70% share in the market and the latter commands the rest of the market. Nintendo faces competition from Apple Inc while in the casual gaming market, Facebook is a likely upcoming competitor.
  • 15. The Macroenvironment PESTLE Analysis (1/2) Political Factor Target of political activist concerning controversy about violence in gamers. Entertainment Software Rating Board (ESRB) that assigns ratings for gaming content (ERSB, 2012) Economic Factor Purchasing behaviour is influenced consumer purchasing power. Console development cycle follows roughly the general computer industry cycle Consoles are not upgradeable, consumer has to buy complete new system. Social Factor Video games are played predominantly by young males. The current social trend on the rise are non gamers who have no prior experience or interest in video games. The number of female gamers are also on the rise. Digital downloads and in-game purchasing is gradually becoming the norm.
  • 16. The Macroenvironment PESTLE Analysis (2/2) Technological Factor Technology has improved processor speed, visuals and memory capacity for gaming consoles. Disruptive innovation in the form of smartphones and tablets have significantly altered consumer lifestyles. Legal Factors The legal issues faced by the industry are trademarks, copyrights, licensing, online ownership and demands of intellectual property. Environmental Factors The video game industry uses a lot of plastic and metal resources for its hardware. In the current era majority people are environmentally aware. Manufacturing game consoles creates non-biodegradable waste which is the byproduct of this industry.
  • 17. SWOT Analysis (1/2) STRENGTH WEAKNESSES  Nintendo has Shigeru Miyamoto, the creator  Console power weaknesses of Nintendo’s most successful game  Limited selection of software for hardcore franchises and intellectual property. gamers.  Low upfront costs  Brand name –Long perceived by the gaming  The Nintendo brand name is a world cultural community as a kid’s toy or for casual icon synonymous with video games. gamers.  Nintendo has past success with family  Shigeru Miyamoto may eventually retire gaming model from the gaming business.  Nintendo has had extensive experience in the video game industry.  Uniqueness of hardware motion detection when it comes to the Nintendo Wii
  • 18. SWOT Analysis (2/2) OPPORTUNITIES THREATS  The first to introduce motion technology in  Sony and Microsoft are capable of mimicking and video games. improvising on Nintendo’s technology.  The availability of technology  Disruptive innovation caused by Apple’s iPhone and iPad successful ventures in the mobile and smartphone  Variety of multiple gaming platforms. market.  Design games for novice and casual gamers  Third party software developers choose to develop including seniors and adults games for smartphones and Facebook due to lower cost of production and higher potential returns.  Social media gaming on Facebook is gaining popularity amongst casual gamers.  Loss of potential customer due to limited sophisticated games selection for the hardcore gamers.  Slow to adopt an online model for downloadable content and microtransactions on a wide scale for games on its systems.
  • 19. Porter’s 5 Forces Analysis Bargaining Power of suppliers HIGH COMPETITIVE RIVALRY Threat of WITHIN THE INDUSTRY Substitute Products Threat of New Entrants (HIGH) HIGH MEDIUM Bargaining Power of Buyers HIGH
  • 20. Video Games Industry (1985 – 2012) Image source: http://13plymouth.com/wp-content/uploads/2010/09/lifecycle.bmp
  • 21. Nintendo’s Key Success Factors (1/2) Key Success Factors Definition: The combination of factors required to accomplish organisational business goals (Thebusinessdictionary, 2011)
  • 22. Nintendo’s Key Success Factors (2/2) • Dominance over the casual gamers and portable gaming market -In 2001 – 2006, Nintendo have a big share over the casual and mobile gamers market with the Nintendo Wii and Nintendo DS. • Pricing advantage -Nintendo’s consoles are more affordable than its competitors. • Strong brand name. -Nintendo is well known for its games including Super Mario, Pokemon and Zelda.
  • 23. Analysis of Key Uncertainties • Rapid advancement of tablet and smartphone technology - Tablets and smartphone becoming more powerful • Uncertainty to the market size and potential returns • Other alternative forms of digital entertainment. -Facebook, digital platforms, Google +, internet TV, Apple TV
  • 24. Analysis of Future Trends (1/5) • Increase in social networking, mobile and digital markets - Social networking platforms become more popular. -Availability of cheap or free games for download on digital platforms, ie iTunes and Facebook. -Smartphones and other mobile devices Will penetrate into Nintendo’s market share
  • 25. Analysis of Future Trends (2/5) • Tablets as the next generation of console games -The gaming industry will drive the evolution of technology for tablets. -Apple is already using games to promote and sell its iPads -Developers viewing tablets as the ideal foundation for developing games
  • 26. Analysis of Future Trends (3/5)
  • 27. Analysis of Future Trends (4/5) • Shift into games-as-a-service model -Games are evolving to become a service. -More social games and virtual worlds are created to fill in market space. -Subscription base models,in-game Purchases and premium membership Memberships, virtual goods and microtransactions will become the revenue streams for such games.
  • 29. Analysis of Future Trends (4/5) • Slowed growth of traditional game retailing and publishing -Console game manufacturers will continue to decline in sales in both hardware and software -Traditional retail game stores will gradually exit the market. -Gaming giants will produce their final console (8th generation) before going completely digital.
  • 30. Analysis of Future Trends (5/5) • Emergence of digital content and new publishing models -Third-party software developers such as Ubisoft and Electronic Arts will concentrate on developing games for the mass market and serious market. -Business models for gaming will change.
  • 32. Scenario Themes and Implications (1/7) Scenario Theme 1: Pokemon Evolution - The market for digital contents and games grow rapidly - Increasing trend in casual gaming - Smartphone and tablets become a popular gaming platform -Third party game developers (Ubisoft and Electronic Arts choose to develop games for Digital platforms, i.e. Apple iTunes) - Perception of console games as being too costly to develop for
  • 33. Scenario Themes and Implications (2/7) Strategic Implications of scenario -Nintendo need to adapt and change its existing model to fit the trends. -Include a digital platform for casual gamers to access their vast library of affordable or free games. -Redesign existing popular franchises (i.e. Mario) to suit the casual gamers market -Create new games that appeal to the casual gamers -Design a console that attracts both casual gamers and existing gamers.
  • 35. Scenario Themes and Implications (3/7) Scenario Theme 2: Link -Trend for casual gamers growing but not as fast. - Existing digital platforms (i.e. iTunes) are flooded with low-quality, no brainer games. - Existing games on smartphones and social media lack the sophistication of console games. - Many third-party game developers are -Still uncertain of the new revenue model.
  • 36. Scenario Themes and Implications (4/7) Strategic Implication of Scenario - Nintendo to protect its reputation for producing quality games. - Leverage on its brand assets by making their games available across various platforms including social media, iPhone, iPad and smartphones. - Spread brand awareness of its games to gradually win casual gamers over as Nintendo fans.
  • 37. Nintendo’s Popular Game Franchises (5/7)
  • 38. Scenario Themes and Implications(6/7) Scenario Theme 3: Bob-omb - Video game console industry continues to decline and traditional retail and online game shops dies off. - Tablet technology catches up to the performance of game consoles. - Popularity of casual games and gamers increase . - The revenue generated attracts well-known third party game developers. - More quality games are produced for the smartphone, social media and other digital platforms
  • 39. Scenario Themes and Implications(7/7) Implications of Scenario - In the worst case scenario, if Nintendo does not keep up with the trends, competing social and mobile devices will take over the casual gamers market. -Third party game developers will not want to develop games for Nintendo due to it being too costly. -Nintendo will eventually pull out of the hardware market to cut its losses -Will focus on developing games for existing Platforms instead.
  • 40. Conclusion • The console gaming industry matures and is entering the decline phase. • Console manfacturers are facing stiff competition from tablet, smartphone and social media technology. • Casual and mobile gamers are on the rise. • In order to compete and sustain in the long-term, Nintendo must evolve according to the technology and social trends. • Its strength lies in its popular game franchises. • To compete effectively, Nintendo needs to spread its brand awareness through its franchises and create games that appeal the casual gamers market.
  • 43. References Baker, Liana. (2012) RPT-Apple's new iPad making waves in video game market retrieved from http://www.reuters.com/article/2012/03/12/apple-videogames-idUSL2E8EA08920120312 on the 13th of May 2012 Brightman, James (2009) Can GameStop Survive a Digital Future? Retrieved from http://www.industrygamers.com/news/can-gamestop-survive-a-digital-future/ on the 12th of May 2012 Brightman, James (2011) New Year's Resolutions for Sony, Microsoft and Nintendo Retrieved from http://www.industrygamers.com/news/new-years-resolutions-for-sony-microsoft-and-nintendo/ on the 10th of May 2012 Brightman, James. (2010) Games as Packaged Media Is Dead. says Venture Capitalist Retrieved from http://www.industrygamers.com/news/games-as-packaged-media-is-dead-says-venture-capitalist/ on the 10th of May 2012 Caoili, Eric. (2011) Ubisoft seeks to capitalize on 'social game benefits' of next-gen consoles Retrieved from http://www.gamasutra.com/view/news/170397/Ubisoft_seeks_to_capitalize_on_social_game_benefits_of_nextgen_consoles. php on the 10th of May 2012 Grant, Robert. (2006) Contemporary Strategy Analysis. (5th Edition) Singapore. Blackwell Publishing Limited. Matthews, Matt. (2011) The US Video Game Industry Is Declining. Retrieved from http://www.gamasutra.com/view/news/126016/Analysis_Is_The_US_Video_Game_Industry_Really_Declining.php on the 10th of May 2012 Minkly, Johnny (2012). Gaming’s White-Knuckle Transition. Retrieved from http://www.gamesindustry.biz/articles/2012-03-13-nobody-knows-anything-gamings-white-knuckle-transition on the 13th of May 2012 Meyer, De Wit. (2010) Strategy Synthesis. (3rd Edition) United Kingdom. Cengage Learning EMEA.
  • 44. References Brightman, James. (2011) Nintendo Needs to 'Change Strategy Drastically,' says Analyst. Retrieved from http://www.industrygamers.com/news/nintendo-needs-to-change-strategy-drastically-says-analyst/ on the 10th of May 2012 Schoemaker, Paul (1991) Retrieved from http://www.whartonmackcenter.com/files/0/5/517/Schoemaker,%20Paul%20J.H.%20When%20and%20How%20to%20Use%20Scenari o%20Planning-A%20Heuristic%20Approach%20with%20Illustration.pdf on the 13th of May 2012. Schilling, Chris. (2012) Wii U App Store: How Nintendo will take Apple on at their own game Schilling, Chris. (2012) It needs to be "intuitive, functional and simple" developers tell Nintendo Gamer Retrieved from http://www.computerandvideogames.com/338031/features/wii-u-app-store-how-nintendo-will-take-apple-on-at-their-own-game/ on the 14th of May 2012 No Author. n.d. Fun Facts about Nintendo. Retrieved from http://www.techeblog.com/index.php/tech-gadget/nintendo-facts on the 14th of May 2012. No Author. (2011) The Transformation of Video Games Industry. Retrieved from http://www.theesa.com/facts/index.asp on the 10th of May 2012 Scanlon, Jessie. (2007) Getting Serious About Gaming Everyone knows video gaming is a growth industry. What's less well known is how Web 2.0 and big business are contributing to that growth Retrieved from http://www.businessweek.com/innovate/content/aug2007/id20070813_756874.htm?chan=innovation_special+report+-- +the+power+of+gaming_the+power+of+gaming on the 13th of May 2012 N.a. n.d. Nintendo Company History Retrieved from http://www.nintendo.com/corp/history.jsp on the 10th of May 2012.