When talking about Blue Ocean Strategy one of the companies
that comes first in mind is Nintendo. Nintendo adopted this strategy
successfully and launched some of the most innovative products in the Gaming
industry that totally redefined the gaming experience. Nintendo’s success with
Blue Ocean Strategy was evident with company’s strong financial performance
since 2005. In 2007, Nintendo sales sky rocketed with strong sales of new Wii console and DS handheld
gaming device. The momentum continued into 2008 and
the company has seen significant growth in revenues in 2007 & 2008. But
revenues have fallen in 2010 due to price cuts in Wii, lack of strong game
titles and fall in volumes. Same story continued in 2011. Stronger yen against
dollar and euro were other causes of revenue fall.
Nintendo applied
the Blue Ocean Strategy to create the seventh
generation of consoles Wii, which redefined who video games are played
by in 2006. Wii was expected to attract core gamers, casual gamers, lapsed
gamers and non-gamers through new game play experiences, wireless controller,
the Wii Remote, which can be used as a handheld pointing device and detects
movement in three dimensions and new forms of interaction with games rather
than cutting edge graphics and expensive technology. Nintendo focus was on non
gamers and how to bring them into gaming world and they were also focusing on
the core and casual gamers and Wii was a product for all of them. Wii has
surpassed its competition both Sony Play station and Microsoft Xbox and as of
September 30, 2011, Nintendo has sold 89.36 million Wii consoles.
Wii was not
designed to be the best game console but focus was on attracting the non
gamers. Non gamers and casual gamers were the uncontested market space in the
gaming industry that Nintendo targeted. With that focus Nintendo was less
focused on the product as the graphics, chip were average and no disk drive, no High definition,
and hardware features when compared with the main competitor at
that time Sony Play station. It was a far cheaper device and customers were not
only attracted by price but also by the remote and motion sensor technology
that brought a new gaming experience. Access to internet through WiConnect24 is
another feature that attracted gamers through which they can receive updates
and chat with other gamers.
Wii games came
uniquely with proprietary, DVD-like Wii Optical Discs packaged in a keep case
along with instruction information. Nintendo tied up with third party companies
like Ubisoft, Sega, Square Enix, Activision Blizzard, Electronic Arts, and
Capcom who developed games exclusively for Wii through the game development
suite Unity. Nintendo authorizes the developers and only those games will be
sold that are submitted to them and approved by them. Total Wii games sold as
of September30, 2011: 752.54.09 million. Donkey Kong, Super Mario, Call of Duty
etc some of the popular games. Since 2010 Nintendo has seen stagnation in Wii
hardware sales and competition has significantly caught up with them by
offering superior and technologically advanced products.
Nintendo in June
2011 announced the Wii U, sixth home console, with 1080p high-definition
graphics, and features a new controller with an embedded touch screen. The
player can continue a gaming session with touch screen controller (tablet)
displaying the game even when the television is off. Nintendo designed
the Wii U console with an objective to enhance and refresh the Wii experience
and consumers who did not even have an opportunity to interact with the Wii
system. Gamers who desire high-quality HD visuals in their game play and spend
a greater amount of time with game play are key focus of this device. The
device plans to remove the barrier between the core and casual gamers and
provide, on a single console, an experience that will satisfy both types of
users. The company is still continuing with a plan to attract non gamers with
this console.
Wii U is expected
to be released in 2012 and Nintendo is planning to regain its market share with
this console. It is working on the launch of new game titles, and compatibility
of multiple controllers. The device received initial positive feedback but the
success of the device can only be estimated upon release. Wii hardware sales
are stagnating and many publishers are dropping SKUs for the platform as
they are focusing on mobile games. The reduced focus of the game publishers
have led to shortage of new games for Wii. Lack of strong titles, price drops
on hardware systems, and a weakening U.S. dollar are the major reasons for drop
in the Wii volumes and revenue losses. Nintendo believes the drop in sales of
Wii is a natural cycle as for four years the sales has been very high and
gamers eagerly waiting for the launch of Wii U will boost sales in 2012. Wii is
the best selling console till date and Nintendo expects to keep this position
in future too.
Discussion Points:
- How to boost sales of Nintendo Wii
hardware sales?
- Will price cut or Game title launch
boost sales?
- How to survive the current debt
crisis and
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