Nintendo Game Theory

What’s next for Nintendo? How can they keep creating value in this industry? (use concepts to back up your recommendations!)

In order to rebound from this year’s loss, Nintendo will have to boost sales among current products, or launch an extension of the Nintendo product line. The value of the yen is also impacting the company’s overall profitability – but this factor can change in both directions as time goes on. However, strong sales and capturing significant market share will be critical to future success for Nintendo.

In particular, the 3DS handheld device was not selling well, so prices were slashed in order to promote sales. Unfortunately, cutting prices is not the ideal option in this situation. Some customers are certainly price sensitive, and will select a product based on pricing alone. However, if the product does not meet the actual needs of the customers, they will purchase something else. As such, one way for Nintendo to create value is to keep up with the industry trends. Consumers are definitely more “on-the-go” these days, so a mobile and hand-held device is certainly in line with this trend. Going one step further, smart phones provide internet connection (using 3G and 4G wireless networks) which allows consumers to play games online or download games to their mobile telephone devices. Nintendo should incorporate an internet connection in order to keep up with consumer expectations.

Nintendo has a longstanding and well known reputation in the video game industry. The company has established itself as an innovator, and can leverage this as it continues to move forward in the industry. Because Nintendo doesn’t currently leverage any form of internet connections as it relates to handheld gaming devices, this may be a good opportunity for Nintendo to leverage its notoriety by partnering with an internet provider. Additionally, along the lines of further innovation, Nintendo could further leverage the move toward mobile internet usage by...