NINTENDO GROUP REPORT

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(Reference: http://disney.wikia.com/wiki/File:Nintendo_Logo.png
Reference: http://www.nintendowallpapers.com/nintendo-characters-wallpaper/)

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Executive Summary

Nintendo is a worldwide leader in the interactive gaming Industry. Nintendo has identified a
niche market within the younger and family audiences that are known as ‘casual gamers’ as
opposed to ‘hard-core gamers’ that are heavily targeted by their competitors. Nintendo’s
products have enjoyed a long history of great product awareness and favourable attitudes through
well-known characters linked to their product like Mario, Donkey Kong and Pokémon.
Nintendo’s products are interactive gaming consoles and software that are priced at different
levels depending on what lifecycle the product is currently going through. Nintendo creates its
products in Japan and delivers these products through wholesalers which in turn supply them to
retailers and onto the consumers. Nintendo does not have any face to face interaction with the
general public however they do have a hotline for consumer enquires. Nintendo has been in a
constant battle within the interactive gaming industry with it’s two primary competitors
Microsoft and Sony. Nintendo, like all companies are prone to macroeconomic forces that could
impede their success within the industry these can include demographic, economic, natural,
technological and cultural/social forces. A major weakness and threat that has been identified
within Nintendo is their shrinking target market. From this an opportunity has arised in the form
of smartphone game applications. Smartphone game applications are a rapidly growing industry
in a new technological age. Nintendo must consider if it is feasible to develop a presence and
create its own products in this new and exciting market.

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Table of Contents
Introduction………………………………………………….……………………….………5
Market/Customer Situation…………………………………………………………….……..6
Industry……………………………………………………………………………….……6
Target Prospects…………………………………………………………………….……...6
Behaviour and Trends…………………………………………………………….………..6
Product Awareness and Attitudes…………………………………………….……………7
Marketing Mix Situation……………………………………………………….……………..8
Product…………………………………………………………………………….…….8
Price………………………………………………………………………………..…….9
Place…………………………………………………………………………………….10
Promotion……………………………………………………………………………….10
Process…………………………………………………………………………………..10
People…………………………………………………………………………….…...11
Physical Evidence…………………………………………………….……….…...11
Competitive Situation…………………………………………………………….…………..12
Sony………………………………………………………………………………….….13
Microsoft………………………………………………………………………………..13
Nintendo………………………………………………………………………………...14
Macro-Environment Situation………………………………………………………………..15
Demographic Forces……………………………………………………………………15
Economic Forces………………………………………………………………………..15
Natural Forces…………………………………………………………………………..16
Technological Forces…………………………………………………………………...17
Cultural/Social Forces…………………………………………………………………..18
SWOT Analysis………………………………………………………………………………19
Opportunity Identification…………………………………………………………………... 21
Conclusion……………………………………………………………………………...…….23

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Introduction

Nintendo is a leading company in the creation and production of interactive gaming

entertainment systems. The company first started in 1985 Kyoto, Japan with the introduction of
the NES gaming system. Since then Nintendo have brought us well known products like
Gameboy, Nintendo Wii, Gamecube, Mario Bros, Donkey Kong plus many more. To date
Nintendo has sold nearlly 2.7 Billion video games and 470 Million hardware units worldwide.
(Nintendo, 2014) Nintendo has it’s main office and production facilities in Kyoto Japan.
(Nintendo, 2014) However, as the company expanded so did it’s regional offices which are now
scattered throughout the globe, Nintendo established its Australian regional office in January
1994 (Nintendo, 2014).

This report will analyse certain situations and factors that are involved in Nintendo’s
competetiveness within the interactive gaming entertainment industry. This report will include;
an identification of Nintendo’s target market, an in-depth report on Nintendo’s marketing mix
situation, identification and analysis of any major competitors and the identification of any
broad broad trends in the macro-environment that bear on the product. From the information
obtained through these key issues affecting Nintendo’s macro and micro-environment a SWOT
analysis will be performed. A SWOT analysis involves identifying specific strengths,
weaknesses, opportunities and threats that are associated with the company as a whole. Finally,
after the SWOT has been performed the report will contain an indepth anyalysis of an
opportunity identification that will apply sound marketing theory in how to best achieve this
opportunity.

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Market/Customer Situation

Industry
Nintendo has been a centrepiece of the interactive entertainment industry for close to 30 years.
Its main focus is on children and families with games such as Pokémon. This has been able to
faciliatate Nintendo’s dominance of this niche market. Nintendo has been a market leader in the
gaming industry since it first introuced the NES in 1985. Nintendo has also revolutionised the
gaming industry in both the handheld and gaming consoles. Nintendo entered the market strong
with the NES, although current consoles, such as the Nintendo Wii U are not doing as well
campared to Sony and Microsoft with the launched of their next generation consoles last year
(Karmali, 2014).

Target prospects

Nintendo has always been good at making games and consoles for children. Nintendo does not
make any type of gaming products for older generations, although some people will choose to go
through and continue to play through their teens and early adult life. Nintendo hasn’t targeted
hard-core gamers since the Nintendo 64. Nintendo’s segmentation is a niche segmentation with
the aim at children (mainly males) aged 5-12 year old, although many have carried their loyalty
into their teens. There are some Nintendo games not aimed at children, this is to expand their
console to older markets, although, more recent consoles are more family/children based
(Sinclair, 2013). This may change in the future if Nintendo wants to keep up with competition.

Behaviour and trends

Nintendo strives to create games that deliver the most enjoyment for consumers. Unlike Sony
and Microsoft, Nintendo does not make their consoles for the hard-core gamers. Hard-core
gamers do not look to Nintendo as a source of competition where they can show off their skills
and improve them. Although some of their consoles were for hard-core gamers such as the
Nintendo 64. Recently, Nintendo has aimed for the children and family markets to deliver a more
casual gaming experience. (Amano & Clark, 2014).

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Nintendo are looking to expand their market share with plans to expand in emerging markets
with new devices starting next year. (Amano and Clark, 2014) This means that Nintendo plan
on releasing newer devices that are not cheaper versions of their current devices, and also maybe
go into the smartphone industry. If this becomes a trend, Nintendo will be able to sell their
games to a broader audience that have loved Nintendo games before and still would love to have
that experience. This will allow Nintendo to tap into a wider target market with around 1.13
billion people will be using a smartphone phone (but is divided by 2 major contenders in the
market, Android 70.1%, iOS 21%, and other 8.9% (2012 data)) and then there are tablets
(Android 42.7%, iOS 53.8% and Other 3.5%). If moving towards selling Nintendo games for the
tablets and smartphones, this move would be a risky one as it is largely an unknown sector for
Nintendo. (McCracken, 2013)

Product awareness and attitudes

Nintendo relies on word of mouth, if one owns a console and a friend notice’s, that friend will
most likely want one to be able to play with his friend(s) and be more relatable. Parents are also
more willing to pay for a console for their child that is more child friendly system such as
Nintendo’s Wii U or Nintendo 3DS as there in no inappropriate graphical scenes that may bring
harm or scare a child. Consumer attitudes towards Nintendo seems to be on with the awareness,
consumers will more likely buy another console since they believe that Nintendo only makes
games targeted towards children, although there isn't just games for children (there are games for
15 years and older).

Marketing Mix Situation

The Market mix is the most fundamental concept of marketing which is a set of controllable
marketing tools that a company uses to create a desired response in the targeted market (Khan,
2014).

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Product
Nintendo develops and produces interactive entertainment products. They have produced many
popular products since they established in the entertainment system market in 1985 with NES.
The NES almost single-handedly revolutionised the video game industry, bringing games like
Mario and Zelda into the hearts of kids. Since then they have produced several other “hits”, such
as the Game Boy, Nintendo 64, Nintendo Gamecube and the Wii. The Wii was launched in 2006
and became the best-selling console of it’s generation. The Wii held an innovation within video
game technology with it’s motion-censors and cool design. Nintendo marketed the Wii towards
“casual gamers” and with games such as Wii Fit, they managed to capture the appeal of everyone
from children, to women to older people. This was a clever strategy at the time, because it
reached a broader audience and therefore managed to infiltrate new markets. Their physical
products, such as the game consoles and the games represent the goods that they offer the
market, but it’s the playing of the games, the characters and the storyline, that is the experience.
This is part of what gives Nintendo extra value and benefit in comparison to the cost of the
products. The customer’s want to be entertained and this is the need Nintendo attempts to fulfil.

Price

Nintendo uses several pricing strategies throughout the lifecycle of a product. Before the launch
of a game or a console they will have a premium price on the products, they will apply a price
skimming strategy. After the launch they will have a different price for the product, and this

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price will stay the same until fully adopted into the market. When it reaches the “maturity” stage
of the product’s life they will begin to reduce price to keep demand up. In the end when they are
in the declining phase they will be priced promotionally (Friesner, 2014). In Nintendo’s case,
Nintendo 64 to be precise, after the console had pretty much exited the market, the price and the
demand for the product became greater. This is because the console became a nostalgic product
with collector value.

Nintendo has released their new entertainment system called the Wii U. This virtual console
could have and still can create great opportunities for Nintendo. The prices of games decreases
exponentially, because you are able to download them online for just a fraction of the price.

It also allows the customers to download old games from the 80s and 90s that are no longer
available today. This will also help in appealing the older generations to the console, because of
the nostalgia it is creating. Considering this generation is the one with the most buying power in
the world today it could end up being of great importance for Nintendo’s position in the video
game industry. They generally have different price strategies per product. For the Wii U they
used a price discrimination method known as tying (Rodriguez, Xu, Wang & Lecarpentier,
2014). They sold the console for less than production, but by buying the console customers have
to buy games and other additions, which raises the price based on how much the customer buys
of extra products.

According to Third Quarter Financial Results Briefing January 30th, 2014, Nintendo will release
what they call a flexible pricing strategy. In short terms this means that the more games you
purchase, the cheaper the next game will become. Customers will be given discounts based on
how many games they have bought off Nintendo. Also inviting friends to play their games will
give discounts. With this strategy they hope to create a greater sale in volume, create more
loyalty amongst their consumers and attract more customers.

Place

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Nintendo’s products are distributed in several ways. Their main source of distribution is to
distribute it to wholesalers and then to retailers and then to the customer. Nintendo’s
headquarters is in Kyoto, Japan, and this is where the manufacturing of products takes place. In
regards to Australia, Nintendo established a regional headquarters in Victoria, Australia. This
contributed in managing local logistics for Nintendo. Nintendo also distributes their product
through a variety of external online retailers or through the Nintendo eShop (Nintendo, 2014).

Promotion
In the early days Nintendo exclusively targeted the younger market, more specifically children.
Their promotion strategies changed with the Nintendo Wii. The way Nintendo promoted the Wii
was unique and received the Grand Effie Award in 2008 for the Most Effective Marketing Effort.
(Wikipedia, 2012) Rather than targeting young males, the “Wii would like to play” campaign
appealed to people of all ages and all backgrounds. (Wikipedia, 2012).

Nintendo has done some amazing promotional strategies in their days. Such as the “too much
fun” campaign that was released in Canada in 2004. (Wikipedia, 2012) The campaign jokingly
showcased Nintendo as a dangerous drug and that “Four out of five doctors” stated that playing
Nintendo leads directly to “too much fun”. (Wikipedia, 2012) On the other hand Nintendo has
had a couple of flops over the years, such as the Gamecube. The last biggest flop was the
Nintendo Wii U, most people don’t even know that it exists and this in itself clearly illustrates
how poorly it was advertised.

Process
The main points in the process of Nintendo’s products is the designing of the product,
manufacturing the product, selling the product to wholesalers, the wholesalers selling it to
retailers and the customer experiencing the product. The “moment of truth” that is essential in
determining the level of satisfaction the consumer receives from the product involves several
aspects; the price of the product, how easily the product is obtained, the ease of operating the
games and the overall enjoyment the consumer get from the product. Measuring these factors up
against the consumer’s expectation you can measure the level of satisfaction achieved.

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When Nintendo launched the Wii, they adapted their product to suit everyone (through using
motion-censor technology), instead of just children. This is an example of a technological
process. Nintendo also continuously update their software and games to adapt to the change in
customer wants and needs.

People
Considering the fact that Nintendo is a manufacturer, it doesn’t necessarily have a direct
relationship with the customer. The customer relation is between the distributors and the
customer. This makes it even more important for Nintendo to have good relationships with their
distributors. Nintendo has no direct face-face interaction with their consumers. Although, they do
offer customer support over telephone. The quality of the customer support and how they handle
complaints and refunds for their products is crucial for attaining respect and loyalty for it’s
customers. Nintendo do not as of this moment have any online real-time support facilities. This
creates an opportunity for improvement.

Physical evidence
Nintendo has several registered trademarks and copyrights. The most prominent ones are their
logo (see title page), Pokémon and Mario Bros. Their logo is a highly recognisable and well
known trademark that assures the quality of the product.

Competitive Situation

Nintendo started manufacturing videogames in the 1970s. Nintendo has therefore the reputation
of being the longest running company in the video game console market and the most influential
and well known console manufacturer, as well as being the leader of the handheld console
market (Nintendolife, 2014) .Their main competitors are Microsoft with Xbox and Sony with
Playstation.

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Nintendo’s main target audience is children and young adults. When Nintendo Wii was released
in 2006 they have reached an even younger crowd, compared to the games that Xbox and
Playstation offer. The Wii console is different from the other consoles because it has motion-
based controllers, which means characters in the game follows the player's movements (Mazel,
2010).

Though Nintendo has been struggling to win over consumers with its latest generation of game
consoles (Amano & Clark, 2014). A recent review shows that Nintendo with the Wii U console
is rated as last in popularity in comparison to the biggest competitors Sony with PlayStation 4 at
first and the Microsoft Xbox1 at second. (Davis, 2014). The reason for this is that they have not
produced enough games and lost large gaming companies to competitors.
But it goes beyond consoles. Nintendo has a poor online strategy. The analysts say Microsoft,
with its Xbox Live and Sony with the Playstation Network have done better jobs than Nintendo
of reaching out to the online gaming community (International business times, 2010).

Nintendo has lost a lot of market share because of the increasing popularity of online gaming.
They have lost popular and important games due to the rise in use of online games . Also Sony
and Microsoft are both larger companies than Nintendo and can therefore invest more money
into developing new games (Xbox one, 2014).

As mentioned earlier there are three main companies in the video-game industry, which has
basically the same target groups, which are main male children or young adults. It is therefore
easy for Nintendo to identify and follow their competitors’ progresses and development. Though
we can see some differences in their strategies.

Sony
Sony is a large company and they have merged with Ericsson which makes them even bigger.
Sony is very successful when it comes to technological developments. For example they are one
of the inventors of the blue-ray disc, which you can find in the Playstation console. They are also
the only one of these companies which are completely integrated with all aspects of the 3D-
functionalities in the game consoles and their other products (Sony, 2014).

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For example when Sony launched Playstation 3, the console was the only one in the market with
a Blue-ray function. Since this technology was relatively new, it also came with major costs in
production. Sony actually lost money every time they sold a console, so their strategy was to
earn money on the accessories (Dilling, 2007).

Microsoft
Microsoft is the creator of the operating systems Windows XP, Windows 7 and Windows Vista.
They are also the creators of the Microsoft Office, where they more or less rule a monopoly
market. These are the main reasons for the companys large capital, and a lot of knowledge about
how the systems work (Xbox one, 2014).

Microsoft lauched Xbox 2001, which is a long time after their main competitors launched their
first gaming consoles. Their strategy is focusing on interface that is easy for users. There are also
many special and unique games for the newer generations of Xbox, which are available only for
this game consoles. These games are usually offered to players who appreciate good graphics
and strategy games with challenges. In addition, the Xbox is designed as a media center, with
Microsoft software. Here, consumers can connect to the media center and such, plus play their
own music for the games you play (Xbox one, 2014).

Nintendo
Nintendo only offers video game consoles and games, and has built up extensive expertise in the
field. Nintendo's mission is to develop the best games and game consoles in the market, and they
want to collaborate with the consumers, so that customers get the best possible experience of
their products (Nintendos annual report from 2008 page 15, 2014).

Since the Wii was released there are more game titles in the market. Now you can choose
everything from games that are user friendly for kids and very easy to play, which the whole
family can enjoy. Furthermore, there is a smaller range of more strategic and motor difficult
games such as FIFA and Pokémon battle revolution. The range consists of both Nintendo's own
games like Mario, Pokemon and Zelda, but also games like Grand Slam Tennis is made by EA

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sport, giving Nintendo the opportunity to reach out to a larger group of customers (Currently
viewing Wii games, 2014).

Macro environment analysis

Demographic Forces
“Demography is the study of human populations in terms of size, density, location, age, gender,
race, occupation and other statistics.” (Armstrong, Adam, Denize & Kotler, 2012 p. 80). The
Australian Bureau of Statistics states “Australia's population, like that of most developed
countries, is ageing as a result of sustained low fertility and increasing life expectancy”
(Australian Bureau of Statistics, 2013). Nintendo’s main target audience is children and young
adults. With an overall increase in age of the population and declining numbers of children this
will greatly affect Nintendo’s sales figures. ABS, also goes on to state that there was a decrease
of 3.1% of children under the age of 14 from 1990 to 2010 (Australian Bureau of Statistics,
2013). Nintendo not only markets to young children but also to families with children as a whole.
A change in household composition could also adversely affect sales figures. According to the
2011 census data families with children have also been declining by 0.7% over the last 5 years.
(Australian Bureau of Statistics, 2013). The graph below from ABS census data shows the
increasing number of people reaching retirement age, the ‘baby boom’ generation when
compared from 2001 to 2011.

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Economic Forces
Economic forces “consist of factors that affect consumer purchasing power and spending
patterns” (Armstrong et al., 2012). Nintendo’s products aren’t deemed a necessity by the general
consumer but rather as a luxury item. They are not classified as a need but rather a want. So any
change in disposable income of consumers would likely affect Nintendo’s sales figures. General
cost of living in Australia has been on the rise greatly in the last 10 years. In 2013 the Economist
Intelligence Unit's annual Worldwide Cost of Living survey revealed that Sydney and Melbourne
were the 3rd and 4th most expensive cities in the world to live in respectively (Williams, 2013).
No Australian city was in the top 10 for this survey a decade ago (Williams, 2013). An economic
factor that is more sensitive in affecting Nintendo’s declining sales is an increase in a
complimentary good/service for their product, for example, electricity. It has been well
documented that recently there has been a major increase in price for electricity in Australia,
which will affect the cost of actually using Nintendo’s products and thus lead to a decline of
sales. It has been reported that “household electricity prices have increased by more than 110%
in the past five years, and are projected to increase another 7% in 2014-15”(Pearson, 2014).

Natural Forces
Natural forces include any changes in the natural environment. The Natural environment
involves “the natural resources that are needed as inputs by marketers or that are affected by
marketing activities” (Armstrong et al., 2012). Increased costs of energy can be a major factor in

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affecting the natural environment. Not only does it affect the consumer as outlined above in
economic forces but it can also affect production levels. Japan relies heavily on nuclear power
for their energy needs. This is due to the fact that Japan lacks a lot of natural resources. Japan is
the biggest importer of LPG, the second biggest importer of coal and the third biggest importer
of oil (McCracken, 2014). On the 11th of March 2011 an earthquake magnitude 9 occurred off
the Japanese coast resulting in a tsunami (Simon, 2014). This natural disaster caused a ‘nuclear
event’ at the Fukishima Nuclear Power Plant (Simon, 2014). The Fukishima Nuclear Power
Plant has ceased operations since this event. The loss of this power plant has put an enormous
strain on energy sources in Japan and thus leading to an increase in energy costs (McCracken,
2014). This overall increase in Japanese energy costs can lead to a decrease in production, which
could affect declining sales. The graph below shows Japan’s spending of net imports on fossil
fuels compared to its GDP. It illustrates how heavily Japan relies on fossil fuels compared to
other industrialised nations. The graph also shows the impact of the Fukishima disaster in 2011
on Japan’s energy needs and the subsequent increase in fossil fuel consumption to meet this
demand.

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Technological Forces

Technological Forces involve “forces that create new technologies, creating new products and
market opportunities” (Armstrong et al., 2012 p.92). Declining sales figures can be seen in this
sector if consumers are disappointed in an absence of new technology in their products and
switch to competitors products instead (Armstrong et al., 2012). This is probably the most
important sector of the macro-environment that can affect Nintendo’s sales figures. As a leading
company in interactive gaming products Nintendo need to be continually creating and
developing the most up to date technological advancements for their customers. The two biggest
competitors to Nintendo’s sales are the Microsoft X-Box and the Sony PlayStation. A recent
review into 2014 gaming consoles has rated the Sony PlayStation 4 at first, the Microsoft Xbox1
at second and the Nintendo Wii U at fifth (Davis, 2014). On a more detailed examination you
can conclude that the Nintendo Wii U is lacking some of the technological advancements of the
other gaming systems which could be affecting its rating and overall sales figures. On
comparison to the other 2 gaming systems the Nintendo Wii U did not contain/provide; cloud
storage, Ethernet ports, mobile app, content streaming/sharing, video editing, video stores, Blu-
ray or dvd playing capabilities, voice chat, cross game chat and social networking (Davis, 2014).
As you can see, when compared to its competitors’ products Nintendo is seriously lacking some
technological advancements which would be affecting their declining sales.

Cultural/Social Forces
“The cultural environment is made up of institutions and other forces that affect a society’s basic
values, perceptions, preferences and behaviours” (Armstrong et al., 2012 p. 97). Cultural and
social forces haven’t had many major impacts in Nintendo’s declining sales. However, one area
that may be affecting sales is a change in perception and education about leading more active
lifestyles. There has recently been a push from government down to the community level about
leading more active lifestyles. An example of this can be found at the Australian government
department of health “A healthy and active Australia” (Australian Government Department of
Health, 2014). This social shift from better educated community members and parents are

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putting pressure on young kids to be more active instead of sitting down and spending lots of
hours on interactive games, which Nintendo’s products fall under.

SWOT Analysis

Strengths: Opportunities:
● Reputation and history. As it is the oldest gaming ● Expand target market to
company on the market today a lot of people have females
a strong connection to the company from their ● Develop gaming products
childhood. that are more efficient in
● Appeals to the more ‘casual-gamer’ their use of electricity
● Create better online
support facilities
● Gain a greater stake in
expanding industries like
smartphone game apps.

Weaknesses: Threats:
● Small demographic target market (young males) ● Ageing population,
● Demand for products is highly reliant on diminshing target market
complimentary goods like electricity ● Popularity of smartphones

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Strengths
Nintendo has enjoyed a long standing history of success in the entertainment history. It is the
oldest established interactive entertainment among its competitors which has seen characters
associated with their products become household names around the world. This has led
Nintendo’s brand recognition and reputation to outstanding levels. Nintendo also contains a
strength in that it has a large control of the niche market of ‘casual-gamers’ within the industry.

Weaknesses
Like all interactive entertainment companies, Nintendo’s primary target market of young males
is declining due to an ageing population. This demographic shift has had a large impact on sales
over the last decade and will continue to do so unless adressed. Recently, Electricity prices have
raised dramatically. This can have a harsh affect on the desirability of Nintendo’s products due to
their over-reliability of electricity to use their products. Nintendo’s products aren’t a neccessity
but a luxury so during hard economic times with increasing electricity costs consumers may
forgo their products.

Opportunities
Females have long been neglected when it has come to interactive entertainment products.
Nintendo has a great opportunity to expand their target significantly by catering and targeting a
range of products to the more specific needs of the female population.
Since the introduction of smartphones in the mid-2000s this industry has continued to grow at a
rapid rate. Along with smartphones actual use has been the purchasing and use of smartphone
game applications. They are seen by the consumer as cheaper, more accessible and easier to use.
At this current time, neither of the big 3 interactive entertainment providers have looked to get
into this market and it could be a great opportunity for Nintendo to pursue.

Threats
As mentioned earlier the shift in demographics towards an ageing population is a major threat to
Nintendo’s product. As there becomes less young males in their target market they should expect
to see their sales figures and popularity among the general public continually declining.

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The rise of the smartphones has shown that consumers place great emphasis on affordability,
accessability and technology in this new age of interactive entertainment. Failure by Nintendo to
address these key issues will continue to see Nintendo’s products being replaced by smartphone
game applications.

Opportunity identification

A big threat for Nintendo is the fast growing mobile phone game industry. Although, a big threat
can also be viewed as a great opportunity. What if Nintendo decided to enter the mobile phone
game market?

Product
By developing and releasing games on mobile phones via Android and Apple store they will
reach a much broader market. They can use their brand recognition and trade marks for an
immediate response in the mobile phone game industry. Their games will be smaller, and
therefore easier to develop as well. Not only can entering the mobile phone industry create a
larger profit for the company in regards to people buying their app, but more people will play
their games, thus more people will feel more attached to the characters that is Nintendo. Then
again this might lead to an increase in sale of other Nintendo products. Giving customers games
to play on their phone, which is something they can play anywhere might also increase the
loyalty of the customers.

Price
The costs related to creating an app are a significant amount lower. The app won’t be sold for as
much either, but the profit margin is potentially quite big. As mentioned above, it can also lead to
an increase in sales of other Nintendo products.

Place

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The distribution of these products will be different from their normal distribution in the way that
instead of using various types of retailers to sell and promote their products, it wil be featured on
App store and/or android market. Thus it will evidently save a lot of distribution costs as well.

Promotion
On their mobile phone games they won’t need to spend as much money on advertising and
promoting their games. Generally the best way to promote an app would be to pay Apple and
Android to have banner of their new game on their main site and hopefully get the game into the
“featured” and “most popular” categories.

Process
The only change in the process would be where instead of selling it to a wholesaler who then
sells it to the consumer, Nintendo sells it online using Android market and the Apple store.

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Conclusion
Nintendo posseses a number of strenghts, weaknesses, opportunities and threats related to their
own product, consumers, competitors and their macro-environment. Nintendo’s major strength is
the long history their products has in the industry and the positive attitudes/customer loyalty it
has associated with their product. The fact that Nintendo’s target audience is shrinking due to an
ageing population is seen as one of it’s greatest weaknesses. The biggest threat Nintendo
currently faces is from the rise of smartphone game applocations in this rising age of technology.
Failure of Nintendo to address this could see them fall behind as leaders in the interactive
entertainment industry. This presents Nintendo with the opportunity of creating and developing
their own smartphone game applications. The advantages of this opportunity includes the
decrease in costs of production, appealing to a greater target audience, decrease in costs for the
consumer and an increase in promotional exposure due to the increase of hours of consumers
using their smartphones for everyday tasks. In recognition of these advantages it makes sense for
Nintendo to further explore this opportunity of entering into the smartphone game applications
market.

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References

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Amano, T. & Clark, A. (2014) Nintendo to target emerging markets in ’15, May 8th 2014.
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emerging-markets-15/#.VDSWXIcVdFI

Armstrong, G., Adam,S., Denize, S. & Kotler, P. (2012) Principles of Marketing (5th ed.)
Frenchs Forest, NSW: Pearsons Education Australia.

Australian Bureau of Statistics (2013) 2011 Census quick stats. Retrieved 26th of September
2014 from
http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/0

Australian Government Department of Health (2014) A healthy and active Australia. Retrieved
26th of September 2014 from http://www.healthyactive.gov.au/

Australian Government Department of Health (2014) A healthy and active Australia. Retrieved
26th of September 2014 from http://www.healthyactive.gov.au/

Corporate Management Policy Briefing/ Third Quarter Financial Results Briefing for Fiscal Year
Ending March 2014 (2014). Retrieved 28th September 2014,
http://www.nintendo.co.jp/ir/en/library/events/140130/03.html

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