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Nintendo was founded by Fusajoro Yamauchi on September 23, 1889 in Kyoto, Japan. It

originally started as a playing card company, but Yamauchi quickly realized the limitations of

the card business. In 1963, they shifted from selling playing cards to selling toys such as the

Nintendo Beam Gun. Realizing the potential of video games, Nintendo began to experiment with

them. In 1977, they started producing their own hardware such as the Color TV Game home

video consoles. Over 5 million units of various models were sold, earning the Color TV Game

systems the highest sales figures of the first generation of consoles. Nintendo then hired Shigeru

Miyamoto and Genyo Takeda, who assisted in developing handheld video game consoles like

Game & Watch and Gameboy. Nintendo’s popularity increased dramatically with the popular

arcade game Donkey Kong and other games like Tetris and Mario. Mario and Donkey Kong

began appearing on many products including cereal boxes and pajamas.

In 1996, they released the Nintendo 64 in both Japan and North America, which focused

more on design innovation and less on high performance specifications. Their fourth major

handheld system, the Nintendo DS, was released in 2004 and included a touchscreen and stylus.

Games like Nintendogs and Mario Kart DS increased its popularity and became extremely

successful, with well over three million pre orders in North America and Japan alone. Hoping to

target the new market segments of casual and fitness gaming, Nintendo came out with the

extremely successful Wii console in August of 2006. Their next console, the Wii U, sold slower

than expected but was boosted by the 3DS. They released the Nintendo Switch on March 3, 2017

and it is now the top ranked video console system for mobility. Nintendo now has a museum in

New York where they display all consoles and games from the many years they have been out.

 
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Strengths:

1. Multiple distribution methods: wholesalers, retailers, Amazon, eBay

2. Charge premium early then lower prices

3. Innovative gameplay including both aiming and motion sensitivity

4. High employee satisfaction

5. Established brand synonymous with gaming, first in their industry

6. Distribution networks exist worldwide, and Nintendo is a very global company

7. Partnered with Disney for some games, own popular characters like Donkey Kong and

Mario

8. Adapted to popularity of children (i.e. the portable Nintendo DS)

9. The Wii is known as a family gaming system, also targets fitness

10. Focus heavily on customer satisfaction

Weaknesses:

1. Limited options in online gaming

2. Not appealing to older or more “serious” gamers

3. Wii gaming console very cheaply made

4. Loss of many loyal customers with release of Wii

5. Spend large percentage on promotion

6. Not a lot of controllers for different gamer styles

7. It is becoming increasingly difficult to meet margins

8. Product launches are expensive and not cost effective

 
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9. High dependence on a few titles

10. Very hierarchical structure of the company may cause slow response to threats

Opportunities:

1. Expand digital business with downloadable and add-on content

2. Smartphone games, virtual and augmented reality

3. Targeting a larger demographic, such as older gamers

4. Develop more sophisticated games/graphics to draw in customers

5. Take advantage of social media and social networking games

6. Increasing third party software development due to relatively simple technology

7. Get exclusive rights to Disney content

8. Target growing countries that are just getting access to broadband Internet

9. Make more controller designs for different gamer styles

10. Reduce dependency on suppliers to reduce business risk

Threats:

1. Competitors such as Microsoft Xbox and Sony Playstation (online hubs)

2. The growing trend of online and mobile gaming vs. console and handheld gaming

3. Overseas sales expose the company to risks like fluctuating exchange rates

4. Possible emerging technology in the future

5. Short customer life-cycles due to changing preferences

6. Possible challenges from India and China as their economies shift to entrepreneurial

7. Devices like iPads are migrating gaming away from consoles

 
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8. Product emulation from competitors

9. Rise of availability in counterfeit products

10. Innovative products may not be accepted by customers

Based on the SWOT analysis and our research, here are our recommendations for

Nintendo. 1) To cater to older and more serious gamers, Nintendo can focus on developing the

online gaming segment. They can also find ways such as partnering and including third party

software with more sophisticated graphics due to their relatively simple technology. 2) Nintendo

can market to a wider demographic by increasing their presence with mobile and social

networking games. 3) Nintendo can also focus on new market segments that have not been

targeted in the past by the gaming industry. Because of Nintendo’s power to innovate, they can

create new products that will interest new market segments and increase company success.