However, in July 2015, Nintendo's consoles-only addictive for the model to win, Nintendo's first attempt policy was abandoned and Iwata reversed his earlier into this foreign terrain left it with little success. access. The game stand, stating that "by tapping into the smartphone, we can received more criticism than commendations. By adopting increase the number of Nintendo fans, " thereby recognizing these new models, Nintendo, which has traditionally eriences on its other the potential of the smartphone gaming market taken pride in providing premium experience Nintendo's latest strategy reversal leaves it with much platforms, may be upsetting its loyal fans. Nonetheless, work to be done. With most of the smartphone games Nintendo's move to enter the smartphone mobile gan being distributed free, venturing into this market is a market, though late, is much welcomed by its peers, who completely different ball game compared to the console recognize its historical and prized collection of brands, business. Nintendo can no longer follow the strategy of such as Mario, Zelda, Donkey Kong, and Pokemon. creating games that users have to pay a premium for. To fill the gap in its expertise in this new market, They may have to take the direction that Electronic Arts Nintendo has partnered with DeNA, a local company (EA) Sports have taken, which is to offer annual editions of that produces free-to play games for smartphones. in their popular FIFA football games on the IOS and Android interview with TIME, Iwata said, "Unlike the package platforms for free while keeping the retail version meant model for dedicated game systems, the free-to- for the Xbox or PC priced at over $50. of business model is more widely adopted for games on Nintendo has made an attempt at the "free-to play" smart devices, and the free to start model will naturally model by releasing the 3DS portable console, the Pokemon be an option for us to consider " Nintendo also has Shuffle. The game provides players with a limited number partnership with Activision to add Donkey Kong and of hearts to be used in each round. When players run out Bowser characters to Nintendo's popular Skylanders of hearts, they can choose to either purchase hearts or line up. wait for 30 minutes for an additional free heart In 2016, after the passing of CEO Iwata in 2015, While games like Candy Crush Saga and Clash Nintendo launched its Pokemon Go app on smartphones. of the Clans have become popular with this modal, it is People went crazy over the game. This prepared the way a well-known rule in the industry that the game must be for Nintendo's new game console, Switch. 418 Questions 1. Analyze what went wrong with Nintendo that resulted in losses in the early 2010s. Relate this to competition and product life cycle. 2. At which stage of the product life cycle do you think (a) home consoles is in? (b) Nintendo is in Justify your answer. 3. What can Nintendo do to extend its product life cycle? Discuss this in terms of the Boston Consulting Group matrix for each product that Nintendo carries and what can be done for each to extend Nintendo's presence in the market. Sources: Does Nintendo Need to Reinvent in Business Model,"Nikkei Report, 1 1 July 2013; "Nintendo ExPres Yamauchi Dies ol 85, " Jiji Press English News Services PART 5 . Shaping the Market Offerings 19 September 2013. "Nintendo Pokemon X and Pokemon Y' Sell More Than 4 Million Units Worldwide in First Two Days' China Weekly 2013, Mayumi Negishi, Hiroyuki Kach, and lan Shutt "Wii Woes Weigh on Nintendo, " Wall Street Journal Asia. 20 January 2014, 'Doom and Gloom a Weekly News, 29 0dobe in Nintendo's Mushroom Kingdom," Nikkei Report, 20 February 2014, Elle Planner and Takashi Mochizuki, "Nintendo Quells Fear of Mobile, Journal Asia, 18 March 2015: Pranay Parab, "Why Nintendo Making Mobile Games is Great News for Everyone," www.gadgetsindiv.com, 2015 "Transformation is the Key, Says Nintendo, " The Business Times, 18 June 2015, p. 17: The Yomiuri Shimbun. "Weak Yens Ellect Seen at Shareholders Meetings " The Jopan Minus 27 June 2015; "Nintendo says CEO Satoru Iwato Has Died of Cancer at 55," www.technology inquirer.net, 13 July 2015 "Nintendo CEO's Death Cipales leadership Uncertainily at Japanese Gamemaker, " The Business Times, 14 July 2015 p. 21Nintendo logged in an all-time record of 41 8 million in sales and o 9550 billion in operating profit in 2009 Marketing Lesson when 25.95 million units of the Wil home console and 197 31 million units of the Nintendo DS handheld warn sold, Shortly after this stellar record, the sales outlook of the company began to steadily drop According to the Nintendo Annual Report 2014, the company has incurred losses over the last few years. With the entry of Sony's Play Station & and Microsoft's NINTENDO Xbox One into the gaming market, Nintendo's two first console launches did nothing to help Nintendo's Nintendo, founded by Fusajiro Yamauchi in 1889, started financial decline, The consoles ate into the market share of Nintendo's own product, the Wil U, launched in 2012 off by making hanafuda cards, a Japanese playing-card as an upgrade to the Wii. In the third quarter of 2013, the game based on flowers. It has come a long way since then Wii U had a complete monopoly in the console market and become one of the pioneer brands in the interactive By 2014, the Japanese game maker revised its forecasts entertainment industry: for the sale of its latest console release, the Wil U, to After Fusajiro Yamauchi's death in 1949, his 2.8 million units, a third of its original estimate. The grandson, Hiroshi Yamauchi, took over the company Wii U was soon more as a secondary or casual console Under his leadership, Nintendo shifted its focus to video to have at home, as most gamers preferred either the CHAPTER 12 . Setting Product Strategy games. Hiroshi Yamouchl teamed up with Shigeru Sany PlayStation 4 of Microsoft Xbox One, which had Miyamoto, who joined Nintendo in 1977, and created baller specifications in terms of RAM, CPU and GPU Mario and Donkey Kong The Legend of Zelda and the Will processing power followed in 1986 and 2006, respectively, These games The Xbox One and the PlayStation 4 also enable led Nintendo's advancements into the home console and social connectivity by allowing players to upload portable gaming system markets, upon which the pillars recordings of their playthroughs to the Web or stream of modern-day gaming wore established, them live, whereas the Wii U does not support any such When the Nintendo Entertainment System was streaming or sharing. In addition, the Xbox One and introduced in 1985, it revolutionized the video game PlayStation 4 get multiplatform game releases, such as Call of Duty, Assassin's Creed, Destiny and FIFA, that the industry. Over 60 million units were sold as people started Wii U does not playing classics such as Mario and Zelda in their homes for the first time. And in 1989, this Kyoto-based company In 2008, Nintendo had enjoyed more than hit their home run with the launch of Game Boy Launched 40 percent of the market share, Five years later, its market at a relatively low price of V12,500, the 2.7-inch share had dropped to a meager 16 percent, and by colorless screen could last an impressive 30 hours on four 2015, Nintendo had only increased its market share to AA batteries. This feature dealt a hard blow to Nintendo's 21 percent competitors-Atari Lynx and Sega Game Gear The combination of fan loyalty and the superior hardware capabilities of the Microsoft and Sony With the launch of Pokemon in 1995, Game Boy consoles set a high benchmark for Nintendo's Wii U became the device that millions of children grew up with. Over the years Nintendo had become over-reliant on In 2001, sales of the Game Boy exceeded 18.86 million its consoles and failed to tap the massively growing units, and since its launch, an estimated 118.69 million smartphone games market. Their fear of smartphone units of Game Boy have been sold. games cannibalizing their traditional base, made them In the last three decades, Nintendo has launched stick to their traditional success model and Nintendo multiple revamps of its original devices, the most successful did not release any of their existing franchises, such among them being the Super Nintendo Entertainment as Super Mario Bros or The Legend of Zelda, to System, Game Boy Pocket, Gameboy Advance, Nintendo smartphones. DS, and Nintendo. It also launched completely new During that time, Satoru Iwata, who in 2002, came to products like the Wii and then the Wii U, which has motion be known as a "hands-on" CEO and president, defended sensitive remote controllers and built-in Wi-fi capabilities the company's decision to not enter the smartphone game that advanced the standards for console systems. market, In a 2013 interview, he said, "Twenty years down However, the changing marketing environment the line, we may look back at the decision not to supply and Nintendo's failure to quickly adapt accordingly Nintendo games to smartphones and think that is the have set it back significantly. reason why the company is still here."