Initially, Nintendo was not lucky and owes its survival and strong market position to the Wii console strategy. Nintendo also started to feature some of its high-tech amusement arcade games on the Wii platform. Wii employed a new strategy by realising that the firm could do more with less input.
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Therefore, it successfully employed combination of low powered processors and a standard optical disc drive, compared to the powerful chips and high definition lasers in Sony’s PS3 and Microsoft’s XBOX 360. The strategy utilized motion sensing wireless technology that compels one to get up and in to playing the game. Wii controller resembles TV remote controllers.
The designers speculated that the familiarity with TV remote could be more appealing than the more complicated video game controllers. The strategy was a success. It is due to these strategies that the firm managed to survive and become the most successful video game company in terms of revenue and profits earned.
The Wii game console was termed as an immediate smash hit by industry analysts. They dared and questioned its potential to remain relevant and successful in the market. However, their fears and speculations subsided when retailers started to have troubles in keeping the product in their stocks for more than a year.
The firm defeated its competitors with 24 million purchases completed in a period of 18 months as compared to only 19 million complete purchases of Xbox 360 from Microsoft and only 12 million complete purchases of PS3 from Sony for the same period of time.
In addition, Wii game console has the capability to scan weather, news, and websites through wireless internet connections; a tool that fuels a continued sale of Wii in the market. Therefore, Nintendo was able to put into rest the doubt that the Wii product was just a short-term event (fad).
In the product life cycle, Wii can be classified to be in the Maturity stage, this is the second last stage in the product cycle. It can be argued that the game console is moving towards the decline stage. Therefore, at maturity stage of any product in market, the most delicate stage, the company has to put stringent measures and strategies to give the product a competitive advantage.
Evidently, Nintendo is employing good strategies that are keeping Wii in the market. The fact that Nintendo has always emphasized on innovation positions the firm stronger in the market. For example the critical interface in gaming has always been the success determiner and as the case suggests Nintendo is currently putting in place developers to think about how interaction uses motion on gaming consoles.
In fact, Nintendo’s success can be attributed to creative leadership and willingness to do things differently. As long as Nintendo stays focused it will be successful for many years to come. Wii’s next life cycle phase is ‘decline’ and therefore it will require stringent measures and strong strategies in order to avoid a decline or its death in the market.
The point means that the company must prolong its maturity stage through effective initiatives. Some of the strategies that can retain Nintendo’s leadership position include:
- To provide new games which are relevant and appealing to the non-traditional gamers
- They should also produce more serious games that capture the hardcore gamers; a thing that they have not invested on.
- Nintendo should also invest on producing easy-to-play games which can be used to capture new and non-traditional gamers.
- In addition, the company should contract other companies that do game publishing in order to provide newer and interesting games.
- Finally, Nintendo should reduce the entry barriers to their download channel to ease the access of their products.
Since Nintendo Company was established in the game console market, it has targeted children and teenagers. The company has remained strong in that demographic ever since. Now that the age of gamers has changed to the more mature category of gamers, the market is characterized by middle aged gamers.
Therefore, any company that wishes to remain strong in the market including Nintendo must change its target segments and focus on respective consumers. The potential threats to Nintendo include competition from new companies such as apple as well as other Smartphone makers.
The competitors are threatening the gaming industry with advanced technologies especially when they consider entering this market. Their smart phones are being created with an experience like no other product by incorporating gamer’s doc interfaces with wireless and hdmi alongside the normal cell phone user interfaces.
In addition, the competitive position of the company is threatened by the shifting age of the consumers. It means that the competitors are able to discover the customer desires and preferences. Another threat is the increasing production of games which are meant for a single system.
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Therefore, it is much unlikely that Nintendo will be able to compete on price effectively. It appears that the company may eventually lose the strong market position.