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Video game is an enormous industry, and the initial video games can be dated back 3 decades ago. Since then there has been a drastic change in the gaming technology. Microsoft, Nintendo and Sony are the emerging players in this domain, and these companies have not only slowed down the pedal of Mattel, Atari and Coleco, but have also progressed rapidly in other technologies apart from the video games. The lone person who can be credited for the birth of the video game industry is Nolan Bushell, a 24 year old graduate from the University of Utah with a degree in engineering.
Nintendo’s Company Strategy
A successful company always fit its strategy and operates according to the external environment, and is flexible to restructure the surroundings to its benefit through its selected strategy. A company’s strategy helps to highlight how profits can be increased through product development extensions, changes to the product mix, adjustments to prices or cut in costs . Nintendo’s success can be credited to its important resources that included its research and development team, advertising and promotion team, engineering processes, and mainly the company’s management, that was managed by Satoru Iwata. These resources build valuable competences and Iwata was talented to forecast the future trends in video gaming. The innovative technology and gaming ideas were highly backed up by the company’s research and development team, and promoting and advertising campaigns combined with an excellent product were direct contributors for success with the customers.
Long Term Company Dominance
It is highly predictable that the environment of the home video game industry does not make it possible for a single company to remain dominant over the long term as the new generations launch more powerful machines that are faster, support complicated graphics, and are more fascinating than the previous versions. Nintendo dominated the 8-bit era; Sega, the 16-bit era, and Sony the 32-bit era . To succeed as a dominant gaming for a long term the company must analyze the current competitive advantage over its rivals and the external environment must be identified to understand the company’s threats and prospects.
Strategies for Success. The industry strong holds such as Microsoft, Sony and Nintendo have unique, original, high-tech products, and the distributors in the business are judiciously dominant. In order to achieve success, the top video game executives of these companies must fair price the products without competing with each other. One possible way to contend would be to expand their video game categories further than simple and create more user-friendly games. Presently, the companies have made systems that are not compatible with any other companies systems, to avoid competition. Several companies had tried to reverse-engineer the code embedded in Nintendo’s security chip, which competitors characterized as a lockout chip, and were sued by Nintendo . A good suggestion for the top executives would be the joint alliances to establish themselves and succeed in the industry.
Nintendo’s Challenges. Nintendo changed the traditional demographic by not only targeting the boys, young men, and thoughtful gamers, but also they included senior citizens, families and women. By moving towards the fun and social approach, Nintendo released the Wii console, which was simpler compared to other products, and was built on cheaper hardware that made the company famous overnight and the non-existing customers became the loyal customers of Nintendo. A few challenges are associated with the new strategy such as the gamers would have less income to buy a new gaming console every few years and the subsequent games that are released in parallel.
Hill, C., & Jones, G. (2004). Case 19: The Home Video Game Industry: From Pong to X-box. In C. Hill, & G. Jones, Strategic Management: An Integrated Approach (6th ed., pp. 280-293). Dreamtech Press.
Kourdi, J. (2009). Business Strategy: A Guide to Taking Your Business Forward (Vol. XII).