Nintendo: Disruptor Being Disrupted BY anuJ0505 Nintendo: Disruptor being disrupted! Background In 2010, the video game market’s revenue was US $ 62. 7 billion of which game software revenue accounted for US $ 29. 8 billion. The video game industry was mainly made up of 4 segments: PC gaming, console gaming, handheld gaming and mobile gaming. The video game industry had seen a transition from traditional gaming to multiplayer gaming, social network gaming, free online games and freemium games where full versions required purchase.
The consumers now prefer uying games online and getting them digitally delivered via downloads from the internet rather than stored in physical disc formats. The companies now believed in extending the game console’s life cycle by bring in peripherals and add-ons rather than developing an entirely new console. Competitors The three main contenders in this industry were Nintendo, Sony and Microsoft. Nintendo’s competitors had huge financial resources due to their other businesses whereas Nintendo worked solely in the video game industry.
Sony and Microsoft tarted catching up with Nintendo after the runaway success of the Nintendo Wii. Sony introduces the PS3 and Microsoft developed the Xbox360. Nintendo had used off-the-shelf hardware for Wii and made it suitable for the masses- specially the ‘Moms’. Wii avoided directed competition from next generation game consoles and instead identified a new market by targeting customers who had no or little interest in gaming. Along with Wii, Nintendo introduced motion sensing gaming, Wii Remote. Nintendo’s competitors, Sony and Microsoft started with the Playstation(PS) and Xbox espectively.
They started catching up by bringing in advanced versions of the same being PS3 and Xbox360. Sony also introduced Playstation Portable and PS vita, both handheld game devices. Then it moved on to motion sensing with PS Move and PS Eye. Microsoft introduced Kinect to catch up in the motion sensing run. But these were not the real challenges or threats faced by Nintendo. The Real Challenge/ Threat Third party game developers had entered the video game industry. They developed game engines which supported Sony and Microsoft’s products but not Nintendo roducts.
Also Giants like Apple and Google brought in mobile gaming. Apple launched products with iOS which supported mobile gaming and was very friendly to use. The games could be downloaded from the Apple App store. These games were developed by third party game developers. Since it did not require many resources and the entry barriers were reduced by Apple and Google by releasing free software development tools, a huge number of entries happened in this segment. Similary Google had launched Android which was available free and could be used on a variety of devices.
Google had the Android Market from where various games could be downloaded. This mobile gaming was eating away the console gaming and handheld gaming markets. Even the PC gaming markets were affected by these developments. Nintendo was capable of producing new technology products and could do everything right but the market was being eaten away by an entirely ditterent segment t . I was at this time that Nintendo launched an advanced version ot the DS, the 3DS and hence it failed to attract the masses.
Recommendations Nintendo can partner with Google or Apple to use their platforms or collaborate with hem to come out with something revolutionary and at the same time avoid competitive forces. Nintendo can start its own series of apps and games which can be used on the iOS and android devices to tap the mobile gaming industry. Nintendo should relook at its product development model while focussing more on the software part and developing disruptive gaming softwares as the industry is moving towards mobile gaming. With frequent software updates for the gaming consoles including 3DS Nintendo might attract more gaming enthusiasts.