Nintendo can trace it roots back to 1889. The original company based in Kyoto Japan produced handmade hanafuda cards for card playing games. In 1963 it’s name was changed from Nintendo Playing Card Company to Nintendo Company. Along with the name change the company changed the direction of the company to interactive entertainment systems and the software industry. In the early 1970s the company moved into the toy market with several highly successful products. In the mid 1970s the company began to merge these interests and began introducing electronic games mostly for arcades. In the early 1980s the company introduced numerous games such as Donkey Kong, Zelda and Super Mario Brothers. The mid 1980s brought their first home entertainment gaming system, the N.E.S. (Nintendo Entertainment System).
Since then the company has been an industry leader in new software and game system development. Their latest game system is called the Wii. The Wii has enjoyed extraordinary success since its introduction in 2006. This SWOT analysis will focus on this new game system.
SWOT AnalysisA SWOT analysis is a strategic planning method used to evaluate Strengths, Weaknesses, Opportunities and Threats. (“”, n.d.)Key Strengths:Its uniqueness: When first introduced the concept of a remote and interactive gaming system seemed almost science fiction. In the last three to four years there hasn’t been any similar systems introduced. The system has no competitors in this type of game system.
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Its broad appeal: For the past thirty years the video game market has been dominated by kids aging from eight to eighteen. The introduction of the Wii has introduced this market to parents and others who were not very interested in the traditional game systems. The combination of ease of use, family orientated games and Wii fitness offers a little something for most everyone.
Brand loyalty: Nintendo has been in the gaming market since the beginning. The company has many loyal customers.
Value: The Wii system currently is the lowest priced system on the market.
High demand: Ever since its introduction the demand for the system has been extremely high. For the first three years most stores could not keep the system in stock. On auction sites such as E bay they were selling for three or four times the retail price.
Key Weaknesses:Limited selection of software: Many popular games for the teenage market are not available for the Wii.
Graphics: Wii has much weaker graphics compared to their main competitors, Xbox and Play station. It also lacks the high definition that its competitors have.
Outsourcing: Nintendo contracts with other companies to produce the key components of their Wii consoles as well as the final assembly. Because of the high demand of the system the outside companies were not able to supply the key components or assemble the final product fast enough. By not having enough products available to the public the company lost out on an unknown increase of revenue.
Key Opportunities:Online gaming: Although the Wii has on line capability it is very limited at this time. Expanding this capability will broaden its customer base.
Game software: The gaming software industry in the Unites States is currently soaring. The desire for new and innovative games is high. By developing new games which are proprietary to the Wii will help increase sales of the game system even higher.
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Foreign markets: Due to its name recognition the Wii system can gain large market shares in other countries such as India, China and Russia. The need for games which are culturally unique to these countries has yet to be met. With the ability to develop game software and the product to play them on the Wii should succeed in these markets.
Key Threats:Life cycle: In the video game industry game consoles do not have a long life cycle. Games and their systems usually are only popular for a few years. This is why it is critical to always keep improving the systems, adding new features and developing new games.
Copyrights: Nintendo does not own the copyrights to motion sensing software. Other companies have already started to develop their own versions of this.
Poor design: In many circumstances the controllers have not been properly designed resulting in the controller flying from the users hands. The recalls on these items have cost the company million s of dollars and damages it product reputation.
Durability: The durability of the components such as controllers have been questionable compared to its rivals.
Competitors: Xbox and Play station have recently dropped the prices on their systems to be more in line with the Wii. This taken away some of the advantage it has enjoyed. In the beginning the system was priced at least twenty percent lower than Xbox and Play station. The price gap has been reduced in the last year.
Off brand accessories: As the game system gains in popularity other companies such as Microsoft and Sony are introducing remotes, games and other accessories with are Wii compatible.(, 2009)Conclusion: The brand image which the Wii enjoys has helped the Wii remain extremely popular over the last three years. Much of its success can be contributed to its lower price, uniqueness and broad appeal. In order for the system to remain popular it is imperative that the company keep on the cutting edge by introducing new accessories and games.
Nintendo, Company overview. Retrieved 11 Aug 2009, from boonson.comSWOT analysis. (n.d.).
In (Ed.), Retrieved 11 Aug 2009, from www.wikipedia.org” ().
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