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Information Technology
BIT 2002
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1 Executive SummaryNintendo is a major player in the very competitive video game console market however rivals Sony and Microsoft are always posing a threat to Nintendos financial success because they keep creating technologically superior consoles to compete with If Nintendo is to survive and thrive in the market then it must continue to evaluate its business plan One possible option is to continue to create games that appeal to casual gamers and enthusiast gamers targeting more people Another possible solution is to try to directly compete with rivals by creating a console and games with better graphics A third option is to utilize the resources of third party game creators to provide an even larger variety of games than the competitors2 Problem Statement Issues to be resolvedFor nearly 3 decades Nintendo triumphed the home video game industry But in the mid1990s Sony and Microsoft introduced a new level of gaming with high definition graphics and additional features that offered music and DVD playing in which Nintendo did not offer in their consolesThis brought Nintendo down from the state of leading to catching up Major issue to be solved Nintendo not being able to keep up with its competitors SonyMicrosoft3 Analysis External See Appendix ANintendos target market used to only be males around the ages of 15 to 30 but now their target market has grown to include the whole family The teenage males still want the same things as before action fighting and shooting games that are designed to challenge reflexes and skill as well as entertain The rest of the family particularly the mother and father want simpler games that are fun but can also provide more tangible benefits such as healthy exercise or tests of knowledge so they feel that they gain something when they play Nintendo is fully capable of making the games their customers want and they are well suited to their target market because they focus on the fun and benefit of the game rather than the graphics Nintendo can release games at a frequent rate because it accepts thirdparty development of games for its console and it also has an online marketplace that is capable of providing many games from past consoles as a download from the Internet which also increases sales Nintendos financial success is almost completely dependent on the success of its gaming products because it does not sell any other type of product therefor their success is bound to the economical conditions that affect that market The image they have built is that of a fun familyfriendly company while the competitors tailor their image to appeal to the young to middleage male category Sony and Microsoft are Nintendos main competitors they both have competing consoles They also both have other products that target different markets so that their financial capabilities are not entirely linked to the console market giving them an advantage over NintendoNintendo and Sony were once working together for the creation of the Playstation they decided to part ways but they had the opportunity to remain partners and share technology to create a more advanced system This is an example of how there is a large variety of advanced technologies available for Nintendo to use when they create a console They rarely take advantage of this resource however and continue to use older technology in order to keep costs down Even the Wiimote the motionsensing controller for the Wii was based on technology that was well over 10 years old and was used previously in the Nintendo Power Glove The current technological environmentIn the future Nintendo should consider taking the opportunity that is the newest technologies availableNintendo has a very popular game character Mario Almost every game with Mario is a success for example Super Mario World Mario Party and Super Smash bros There is always the option of of creating new games to expand the Mario universe On the other hand there is also always the possibility of creating a new favourite game series Nintendo could try to expand it game variety by creating new characters to appeal to new marketsSony and Microsoft both have a vast amount of products and markets such as PC software televisions and other electronic devices Although Nintendo used to sell a variety of unrelated products they seemed to have abandoned that opportunity They could consider taking up this root once again to increase income they could use for research and development For the longest time competitors left a large demographic untapped family entertainment Nintendo has decided to take advantage of this opportunity and has started making games that target people other than hardcore gamersSony and Microsoft have consistently been presenting consoles designed to defeat Nintendos consoles For example in 2001 Nintendo sold the Gamecube which had simple graphics and unusual small CDs but Microsoft sold the xBox which boasted impressive PC hardware for realistic graphics and Sony sold the PS2 which was very powerful for its price and offer many more games Microsoft and Sony will likely continue to release consoles with precise timing to compete with NintendoIn 1994 Sony released the Playstation which uses compact disks which is a huge financial advantage because they are very cheap to produce in comparison to game cartridges In addition they proved to be the new standard technology used by other consoles as well and personal computers However Nintendo did not follow this trend and in 1996 they introduced the Nintendo 64 which continued to use cartridge games The competitors could make impressive profits by selling there compact disk games and therefor could afford to spend more money on the technology in the console and lose money on the sale of each console which would prove to be a very competitive marketing strategy Nintendo did not have as good of a profit margin on their cartridge games and therefor could not afford to put better technology in the Nintendo 64 Sony soon releases the PS2 in 1998 which has vastly more powerful hardware and it becomes the best selling console in history proving the Nintendo business model was flawed Sony used their strategy again in 2006 when introducing the PS3 Sony and
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